According to the Melitz [2003. 'The Impact of Trade on Intra-Industry Reallocations
and Aggregate Industry Productivity.' Econometrica 71: 1695-1725] model, potential
exporters have to be sufficiently productive to overcome the entry costs of foreign
markets. Once firms pass this productivity threshold, they all export. However, empirical
evidence indicates that a substantial share of highly productive top-performing firms
does not export. In this paper, we focus specifically on this group of high-performing
non-exporters and identify the factors that prevent them from successfully exporting.
We employ a large Dutch administrative dataset containing both small and large firms
in services and manufacturing for the period 2010-2016. Our main findings are two-fold.
First, controlling for high productivity identifies other factors that need to be
fulfilled for exporting firms. Firm size, import status, and foreign ownership are
important determinants of a firm's future export activity. Second, firm location is
crucial. A location in more peripheral areas increases the probability that high-productive
firms do not export, whereas a location close to the border increases export probabilities.
