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Is "learning-by-exporting" important? Micro-dynamic evidence from Colombia, Mexico and Morocco

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  • Sofronis Clerides
  • Saul Lach
  • James Tybout

Abstract

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 earning-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.

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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 96-30.

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Date of creation: 1996
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Handle: RePEc:fip:fedgfe:96-30

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Keywords: Colombia ; Exports ; Morocco ; Mexico;

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  1. Roberts, M. & Tybout, J., 1993. "An Empirical Model of Sunk Costs and the Decision to Export," Papers 4-93-3, Pennsylvania State - Department of Economics.
  2. Evenson, Robert E. & Westphal, Larry E., 1995. "Technological change and technology strategy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 37, pages 2209-2299 Elsevier.
  3. Guilkey, David K. & Murphy, James L., 1993. "Estimation and testing in the random effects probit model," Journal of Econometrics, Elsevier, vol. 59(3), pages 301-317, October.
  4. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
  5. Handoussa, Heba & Nishimizu, Mieko & Page, John Jr., 1986. "Productivity change in Egyptian public sector industries after the opening, 1973-1979," Journal of Development Economics, Elsevier, vol. 20(1), pages 53-73.
  6. Aitken, Brian & Hanson, Gordon H. & Harrison, Ann E., 1997. "Spillovers, foreign investment, and export behavior," Journal of International Economics, Elsevier, vol. 43(1-2), pages 103-132, August.
  7. Haddad, Mona, 1993. "How trade liberalization affected productivity in Morocco," Policy Research Working Paper Series 1096, The World Bank.
  8. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  9. Chen, Tain-jy & Tang, De-piao, 1987. "Comparing technical efficiency between import-substitution-oriented and export-oriented foreign firms in a developing economy," Journal of Development Economics, Elsevier, vol. 26(2), pages 277-289, August.
  10. Richard Baldwin, 1989. "Sunk-Cost Hysteresis," NBER Working Papers 2911, National Bureau of Economic Research, Inc.
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  1. Exporting raises productivity in sub-Saharan African manufacturing firms
    by jdingel in Trade diversion on 2010-01-20 22:34:56
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