Export Destinations and Plant Heterogeneity: Evidence from Thai Manufacturing

Using plant-level data from the 2007 Industrial Census of Thailand, this paper examines and adds new evidence on the relationship between export destinations and plant characteristics, including both productivity and profitability aspects. Our analysis proceeds in three steps. First, we give a detailed comparison of how plant heterogeneity is associated with export destinations by several tests. Second, we extend the analysis using OLS (Ordinary Least Squares) and probit estimations to provide further evidence. Third, multinomial logistic estimation is applied to analyze the choice of export destinations and plant heterogeneity. We uncover evidence supporting recent theories in exporting and firm heterogeneity. Among Thai exporters to various export destinations, for productivity and input intensity aspects, the results show that exporters to Asian countries (especially, ASEAN countries, Chinese-based countries and Japan) are the most productive groups of exporters and are relatively more material- and capital-intensive on average. For the profitability aspect, exporters to ASEAN and Chinese-based countries generally exhibit the highest total sales and sale profits. However, exporters to Japan have the highest rate of profit. We also find that plants with high productivity are more likely to choose to export to the US, the EU, and Japan and ASEAN countries, respectively. Plants with high input intensity are more likely to export to ASEAN countries. Distinguishing difference between plants exporting to top export destinations and destinations that are not, we clearly observe that there exists strong heterogeneity among plants exporting to different type of markets in Thai manufacturing.