Recent research on international productivity comparisons with historical data has encountered large discrepancies … argued that for Hoffmann's (1965) widely accepted time series for German industrial output, there is no such productivity …-German benchmark and the time series projection is considerable. Attempting to reconcile the time series evidence and the productivity …

Within a structural model we explicitly allow for the trade orientation of companies to estimate productivity dynamics … for exogenous demand shocks by trade orientation, assuming that labour and capital are state variables, and productivity … variable that is driven by lagged productivity as in Melitz (2003), leading productivity to follow a second-order Markov …