Keywords: Export participation, productivity, learning
Abstract: Is there any empirical evidence that firms become more
efficient after becoming exporters? Do firms that become exporters
generate positive spillovers for domestically-oriented producers in
their industry or region? In this paper we analyze the causal links
between exporting and productivity using firm-level panel data from
three semi-industrialized economies. Representing export market
participation and production costs as jointly dependent autoregressive
processes, we look for evidence that firms' stochastic cost process
shifts when they break into foreign markets. We find that relatively
more efficient firms become exporters, and that their costs are not
affected by previous export market participation. This implies that
self-selection of the more efficient firms into the export market, and
not learning-by-exporting, explains the efficiency gap between
exporter and non-exporters previously documented in the literature.
Further, we find some evidence that exporters reduce the costs of
breaking into foreign markets for domestically oriented producers, but
do not appear to help these producers become more efficient.
Full paper (4434 KB PDF)
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