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Do domestic and foreign exporters differ in learning by exporting? Evidence from China

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  • DU, Julan
  • LU, Yi
  • TAO, Zhigang
  • YU, Linhui

Abstract

In view of the importance of intra-firm trade and export-platform FDI conducted by multinationals, we investigate how domestic firms and foreign affiliates exhibited differential impacts of export entry and exit on productivity changes. Using a comprehensive dataset from China's manufacturing industries, we employ the Olley–Pakes method to estimate firm-level TFP and the matching techniques to isolate the impacts of export participation on firm productivity. Robust evidence is obtained that domestic firms displayed significant productivity gains (losses) upon export entry (exit), whereas foreign affiliates showed no evident TFP changes. Moreover, the productivity gains for domestic export starters were more pronounced in high- and medium-technology industries than in low-technology ones. We explain our findings from the perspective of the technology gap theory after considering processing trade and the fragmentation of production stages in the era of globalization.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 2 ()
Pages: 296-315

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Handle: RePEc:eee:chieco:v:23:y:2012:i:2:p:296-315

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Web page: http://www.elsevier.com/locate/chieco

Related research

Keywords: Exporter heterogeneity; Export entry and exit; Total factor productivity; Foreign affiliates;

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References

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Cited by:
  1. Badi H. Baltagi & Peter Egger & Michaela Kesina, 2014. "Sources of Productivity Spillovers: Panel Data Evidence from China," CESifo Working Paper Series 4812, CESifo Group Munich.
  2. Lee, Hyun-Hoon & Park, Donghyun & Wang, Jing, 2013. "Different types of firms, different types of products, and their dynamics: An anatomy of China's imports," China Economic Review, Elsevier, vol. 25(C), pages 62-77.

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