Productivity Performance of Export Market Entry and Exit: Evidence from Indian Firms

16 Pages Posted: 16 Aug 2013

See all articles by Sushanta Mallick

Sushanta Mallick

Queen Mary - University of London; Queen Mary University of London

Yong Yang

University of Sussex - School of Business, Management and Economics

Date Written: September 2013

Abstract

This paper contributes to the literature on exporting and firm productivity, focusing on export entry (efficiency), learning (post‐entry growth) and exit (inefficiency) by Indian firms. Drawing on 7000 firms during 1989–2009, our main objective is to examine the effect of exporting on firm productivity, correcting for selection bias using propensity‐score matching, which allows a “like‐for‐like” comparison between new exporters and nonexporters. Robust to different matching estimators, we find evidence of learning‐by‐exporting that new exporters acquire rapid productivity growth after entry, relative to nonexporters. We also find that (1) exporters are more productive than nonexporters; (2) productive firms tend to self‐select in entering the exporting market, and (3) least productive exporters are found to exit the export market as they experience adverse productivity effect prior to the year of exit. Our robust result on learning‐by‐exporting suggests that entering export market does appear to be a channel explaining the Indian recent growth miracle.

Suggested Citation

Mallick, Sushanta and Mallick, Sushanta and Yang, Yong, Productivity Performance of Export Market Entry and Exit: Evidence from Indian Firms (September 2013). Review of International Economics, Vol. 21, Issue 4, pp. 809-824, 2013, Available at SSRN: https://ssrn.com/abstract=2311101 or http://dx.doi.org/10.1111/roie.12072

Sushanta Mallick (Contact Author)

Queen Mary - University of London ( email )

School of Business and Management
Mile End Road
London, England E1 4NS
United Kingdom
+44 20 7882 7447 (Phone)

HOME PAGE: http://skmallick.busman.qmul.ac.uk/

Queen Mary University of London ( email )

Mile End Rd
London, E1 4NS
United Kingdom
+44 20 7882 7447 (Phone)

HOME PAGE: http://skmallick.busman.qmul.ac.uk/

Yong Yang

University of Sussex - School of Business, Management and Economics ( email )

Falmer, Brighton BN1 9SL
United Kingdom

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