Tech on the ROC: export threshold and technology adoption interacted

This paper aims at identifying the potential mismatch between the conditions required for a firm to become an exporter and the pattern of technology adoption within its industry. In particular, we obtain a new taxonomy of exporting and non-exporting firms by using a "technology line" and an "export threshold" (estimated using the Receiver Operating Characteristics - ROC methodology). The export threshold is the minimum combination of productivity and economic size that firms need to achieve in order to access international markets; the technology line is the technology which the export threshold firm would have if its combination of productivity and economic size was consistent with a higher-than-average technology within the industry. By this way, we are able to highlight the presence of "potential" exporters (firms that do not export even if they have the technological characteristics to do it) and "fragile" exporters (firms that do export despite their technology gap). This empirical approach allows to better qualify "empirical anomalies", paving the way to a more precise targeting for industrial policies. Plain English Summary We propose an empirical tool for policy makers to identify what aspects need to be stimulated (size, productivity or technology) to induce firms to access or consolidate their presence on foreign markets. In particular, applying a methodology widely used in medicine (the Receiver Operating Characteristics - ROC approach), we obtain a new taxonomy of exporting and non-exporting firms, which for each manufacturing sector detects the possible presence of "potential" exporters (i.e. firms that do not export even if they have the technological characteristics to do it) and "fragile" exporters (i.e. firms that do export despite their technology gap). This allows to design more targeted policies, thus increasing their effectiveness and, eventually, reducing costs to Governments, which is all the more important for countries with more stringent budgetary constraints.