Choice of export modes: evidence from Peruvian firms

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 both for the domestic and indirectly for the foreign market through trade intermediaries, and (iii) to produce both for the domestic market and directly for the foreign market through a foreign wholesale affiliate. By setting up an ordered probit model, we found that firm-level total factor productivity is one of the main drivers of the firm's trade choices. (Audio: Department of Economic Publications)