Data collected by the Competitiveness Research Network confirms that European firms that export are more productive and pay higher wages than non-exporting firms in the same sector. Moreover, this is not simply because exporting firms are more productive in the first place, but also because firms become more productive through exporting.
Firms in their first year of exporting post greater productivity gains than similar businesses that do not export.8 See ECB (2017), “Firm heterogeneity and competitiveness in the European Union”, Economic Bulletin, Issue 2/2017. Barriers to trade would undermine this virtuous process and thereby cause both productivity and potential output to decline.