Abstract |
This paper tests the self selection hypothesis for Peruvian firms among the following trade choices: (i) to produce only for the domestic market, (ii) to produce for the domestic and for the foreign market, the later indirectly through trade intermediaries, and (iii) to produce for the domestic market and for the foreign market, the former directly by a foreign wholesale affiliate. These choices follow Felbermayr and Jung (2011) and Verma and Mc Williams (2013). By setting up an ordered data probit model we found that firm level Total Factor Productivity is one of the drivers of the firms trade choices. |