This paper analyses exporting firms` labor productivity. We analyze empirical studies about difference from export and nonexport companies in term of productivity. This paper uses the generalised propensity score methodology and empirical methods. In this paper, we apply the newly developed generalized propensity score methodology that allows for continuous treatment, that is, different levels of the firms’ export activities. Using the generalized propensity score method and panel data for Latvian manufacturing firms, we estimate the correlation between export based companies and labor productivity level. We expect that companies export activities are crucial for labor productivity growth. The main hypothesis point is concerned about more productive firms involved into export markets. The reason for this is that selling goods in foreign countries involves additional costs and more competiveness skills. Additional extra costs that includes marketing, transportation costs, distribution, the cost of personnel involves high skills to manage foreign markets, or production costs. These companies need additional attention modifying domestic products for foreign consumption. These costs provide an entry barrier that less successful and competiveness lack firms cannot overcome. In the empirical investigation we used data from local production branch, from cross sectional data collected in regular surveys by the Central Statistical Bureau. The research cover general data gathered Latvian manufacturing industries that employ at least 20 persons in the local production unit or in the company that owns the unit. Therefore, companies (small and microsmall) with less than 20 employees in total do not report to the surveys. In this paper annual data for 2000 to 2010 , in order to minimize statistical error, are used. The most anticipated result of year-specific estimations is the severe recession in labor productivity growth in 2009. The labor productivity growth rate at very high levels of the export-sales ratio is even smaller than the growth rate of nonexporting firms, although not significantly so. Conclusions. In this research we analyzed the possible relationship between companies’ labor productivity growth rates and their export orientation. We described that there is an effect of companies’ export activities on labor productivity growth. During our research we found that the relationship between labor productivity growth and the exportsales ratio is not necessarily stable over time. This is a unanticipated result. Our results, describes a time-varying relationship between labor productivity growth and the export-sales ratio. The reason for this result might be that companies also sell their products not necessarily in European Union, but also in more distant and technologically less advanced countries. This could increase the costs of coordination and control of exporting firms, but companies are less likely to benefit from this kind of exporting, if they export to a technologically less advanced country this means that innovation level of their product is also not so important as for advanced countries in EU.