Is Learning-by-Exporting Important? Micro-dynamic Evidence from Colombia, Mexico and Morocco
University of Cyprus - Department of Economics; Centre for Economic Policy Research (CEPR); University of Bologna - Rimini Center for Economic Analysis (RCEA)
Hebrew University of Jerusalem - Department of Economics; CEPR
Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)
SERIES NAME: Board of Governors of the Federal Reserve System Finance and Economics Discussion Series; FEDS PAPER NUMBER: (96-30)
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.
JEL Classification: F1, F2, F00, 012
Date posted: January 10, 1997