are larger in size and have higher productivity is evident in the BPS data (Figure 1, panels a and b). For example, a firm in the top tercile of labor productivity has a 28% probability of being an exporter, while for firms in the middle and low terciles, the exporting probability is 26% and 23%, respectively. These productivity differences across firms are driven by better management practices and technological capabilities (Syverson, 2011; Bloom et al., 2013; Kogan et al., 2017), a fact that is also borne out in the BPS data (see Appendix Figure C1) and hence a testimony to its quality.

The BPS data also show clear and robust correlations between global engagement and internal firm capabilities. Management practices shape firms’ global engagement: a firm with a low management score has an 8% probability of being an exporter, while that probability for firms with medium and high management scores is 10% and 14%, respectively (Figure 1, panel c).<sup>9</sup> This finding is consistent with existing literature on global engagement and management, which suggests that better-managed firms have superior export performance (Bloom et al., 2021). Since this analysis is not causal, our correlations may also indicate that global engagement encourages firms to become better managed (Caliendo and Rossi-Hansberg, 2012; Chen and Steinwender, 2020; Chakraborty and Raveh, 2018).<sup>10</sup> Digital readiness is also associated with firms’ global engagement: a firm with high digital readiness has a 14% probability of being an exporter, which is 4 percentage-points higher than a firm with medium digital readiness, and double than a firm with low digital readiness (Figure 1, panel d).<sup>11</sup> This is in line with the literature on the link between innovation, technology, and trade (Damijan and Kostevc, 2015; Akcigit et al., 2018) but our results are only correlations and not causal effects. The correlations between global engagement and firm size, productivity, management capability, and digital readiness are also verified for alternative measures of engagement: importers, firms with indirect engagement and GVC firms (see Appendix Figures C2 and C3, C4).

> 9The BPS questionnaire inquires about three management practices in the firm before the pandemic: comparing sales to a target at least once per month; advertising at least once every 6 months; and basing staff promotions on performance and ability. We classify firms into three groups based on the number of management practices that they implement: low, medium, and high.

> 10Bloom et al. (2021) find that management practices have a larger beneficial effect on exports than on domestic sales, possibly because export products are of higher quality or more complexity, where the pay-offs to better management could be higher.

> 11The BPS questionnaire asks about pre-pandemic digital readiness in terms of use of digital platform for sales; social media or big data for marketing and product development; software for customer or supply relationship management or for enterprise resource planning. We classify firms into three groups based on the number of digital readiness practices that they implement: low, medium, and high.

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