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Performance of Exporters: Scale Effects or Continuous Productivity Improvements

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Crt Kostevc

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Abstract

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'in Slovenian manufacturing between 1994 and 2002. This paper asks whether in addition to good firms self-selecting into exports and multinational production exporting (multinational production) further improves their performance compared with non-exporters. I develop a simple model of trade and international production with heterogeneous firms that generates learning effects through competition in the export markets. The estimations performed on the Slovenian sample indicate that more productive firms tend to self-select into more competitive markets, while there is no conclusive evidence of learning-by-exporting. Namely, although new exporters experienced a surge in productivity in the initial year of exports the effect dissipates in the following years. This leads me to conclude that the perceived learning effects are in fact only a consequence of more efficient utilization of available production capacity brought forth by the opening of an additional market.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 15905.

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Length: 41 pages
Date of creation: 2005
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Handle: RePEc:lic:licosd:15905

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Related research
Keywords: Firm heterogeneity; exports; multinational firm; learning-by-exporting; difference-in-differences; martching;

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Joze P. Damijan & Crt Kostevc, 2005. "Performance on Exports: Continuous Productivity Improvements or Capacity Utilization," LICOS Discussion Papers 16305, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  2. Pedro S. Martins & Yong Yang, 2007. "The Impact of Exporting on Firm Productivity: A Meta-Analysis," Working Papers 6, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research. [Downloadable!]
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