Foreign Market Competition as a Determinant of Exporter Performance: Evidence from Slovenian Manufacturing Firms
AbstractMost studies on the link between exporting status and firm productivity find no evidence of learning-by-exporting, whereas self-selection of more productive firms into exporting is most often confirmed. Furthermore, empirical tests of the learning-by-exporting hypothesis rarely rely on a specific learning mechanism and instead estimate very general tests of the effects of exporting on improvements of firm efficiency. Lack of explicit controls for specific learning mechanisms in turn biases the empirical estimates against finding the learning effects. Here I undertake a more targeted approach to learning-by-exporting by using data on Slovenian manufacturing enterprises between 1994 and 2002 to explore a specific channel for learning in the export markets. Using a variety of empirical tests, I show that competition in exporting markets serves as an added criterion in firm self-selection as only the most productive and fastest growing firms choose to enter more competitive foreign markets. Once home-market competition is explicitly controlled, a significant productivity adjustment effect of exporting firms in response to intensification of export market competition is revealed. Crucially, this provides tentative evidence of learning-by-exporting, which has so far been elusive in the relevant literature. Copyright 2009 The Author. Journal compilation 2009 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal World Economy.
Volume (Year): 32 (2009)
Issue (Month): 6 (06)
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- Armando Silva & Óscar Afonso & Ana Paula Africano, 2010. "Do Portuguese manufacturing firms self select to exports?," FEP Working Papers 371, Universidade do Porto, Faculdade de Economia do Porto.
- Joachim Wagner, 2011.
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- Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(2), pages 235-267, June.
- Wagner, Joachim, 2011. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," IZA Discussion Papers 5916, Institute for the Study of Labor (IZA).
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