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Exporting and Firm Performance: Chinese Exporters and the Asian Financial Crisis

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  • Albert Park

    (University of Michigan)

  • Dean Yang

    (University of Michigan)

  • Xinzheng Shi

    (University of Michigan)

  • Yuan Jiang

    (National Bureau of Statistics, China)

Abstract

This paper analyzes firm panel data to examine how export demand shocks associated with the 1997 Asian financial crisis affected Chinese exporters. We construct firm-specific exchange rate shocks based on the pre-crisis destinations of firms’ exports. Because the shocks were unanticipated and large in magnitude, they are an ideal instrument for identifying the impact of exporting on firm productivity and other aspects of firm performance. We find that firms whose export destinations experience greater currency depreciation have slower growth in exports and that export growth increases firm productivity as well as other measures of firm performance. Consistent with the “learning-by-exporting” hypothesis, greater exports increase the productivity of firms exporting to developed countries but not of firms exporting via Hong Kong or directly to poorer destinations.

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File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers526-550/r549.pdf
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Bibliographic Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 549.

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Length: 47 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:mie:wpaper:549

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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