Performance on Exports: Continuous Productivity Improvements or Capacity Utilization
LICOS Discussion Paper No. 163/2005
37 Pages Posted: 8 Feb 2006
Date Written: 2005
Following along the lines of a growing literature on the causal link between exporting and productivity this paper analyzes the existence of learning-by-exporting using firm-level data. The paper asks whether, in addition to better performing firms self-selecting into exports and multinational production, exporting (multinational production) further improves their performance compared with non-exporters.We develop and test a simple model of trade and international production with heterogeneous firms that generates learning effects through competition in the exportfmarkets. The estimations performed on the sample of Slovenian manufacturing enterprises between 1994 and 2002 indicate that more productive firms tend to self-selectfinto more competitive markets, while there is no conclusive evidence of learning-by-exporting. Although new exporters experienced a surge in productivity in the initial year of exports the effect dissipates as soon as the following year. Confronting the data on factor accumulation with TFP measures indicates that the perceived learning effects may in fact only be a consequence of increased capacity utilization brought forth by the opening of an additional market.
Keywords: Firm heterogeneity, exports, learning-by-exporting, difference-in-differences, matching
JEL Classification: D24, F12, F14
Suggested Citation: Suggested Citation