Exports, Investment and Production Growth: A Dynamic Heterogeneous Firm Model with Learning and Entry Costs
25 Pages Posted: 25 Aug 2019
Date Written: April 1, 2014
We analyze a firm's joint decision to export and invest using a model that incorporates the essential features of self-selection and learning-by-exporting theories of firm-level dynamics. We calibrate the model to 2002-07 Chilean manufacturing plant data and simulate it under different assumptions, finding that neither self-selection nor learning-by-exporting alone can adequately explain the observed cross-sectional relationship between firm level exports and capital, favoring instead a model that allows both mechanisms to work in tandem.
Keywords: Exports; Investment; Self-Selection; Learning-by-Exporting; Heterogeneity
JEL Classification: C63; F11; F17; O32
Suggested Citation: Suggested Citation