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Exports and productivitgy: does destination matter?

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Author Info

  • Adriana Peluffo

    ()
    (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)

  • Juan Barboni

    ()
    (Despegar. Análisis de Riesgo)

  • Nicolás Ferrari

    ()
    (Axiona. Sociedad de Soluciones)

  • Hanna Melgarejo

    ()
    (Agencia de Gobierno Electrónico y Sociedad de la Información (AGESIC). Sistema De Compras y Contrataciones Estatales)

Abstract

In this work we analyse the effect of export destinations on Total Factor Productivity (TFP) of manufacturing Uruguayan firms for the period 1997-2006. We study two effects: self-selection and learning by exporting. To this end, we work with a panel of firms –provided by the Instituto Nacional de Estadisticas- and the destiny of exports - provided by the Dirección Nacional de Aduanas-. We estimate TFP using the Levinsohn & Petrin (2003) methodology. Results for Pooled Ordinary Least Squares estimations show the association between firms with higher share of their total exports to developed countries and higher TFP than firms exporting to less developed countries. Nevertheless, applying the transition group methodology (Alvarez & López 2005) in order to mitigate endogeneity issues, there is no evidence that exporting to developed countries enhances productivity through learning by exporting. However, evidence of learning by exporting is found for those firms starting to export to less developed countries. These findings suggest an international strategy through which firms reach gains in productivity exporting to markets with lower entry cost, and once they have learnt and improved their productivity, are in a better position to enter into more developed countries.

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Bibliographic Info

Paper provided by Instituto de Economia - IECON in its series Documentos de Trabajo (working papers) with number 13-06.

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Length: 30 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:ulr:wpaper:dt-06-13

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Keywords: Total factor productivity; exports; destiny of exports; auto-selection; learning by exporting;

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References

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  1. Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
  2. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1384-1400, November.
  3. Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D : productivity growth in a panel of OECD industries," LSE Research Online Documents on Economics 784, London School of Economics and Political Science, LSE Library.
  4. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  5. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 295-316.
  6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
  7. Aghion, Philippe & Blundell, Richard William & Griffith, Rachel & Howitt, Peter & Prantl, Susanne, 2005. "The Effects of Entry on Incumbent Innovation and Productivity," CEPR Discussion Papers 5323, C.E.P.R. Discussion Papers.
  8. Verardi, Vincenzo & Wagner, Joachim, 2010. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations," IZA Discussion Papers 4964, Institute for the Study of Labor (IZA).
  9. Fernandes, Ana M. & Isgut, Alberto E., 2005. "Learning-by-doing, learning-by-exporting, and productivity : evidence from Colombia," Policy Research Working Paper Series 3544, The World Bank.
  10. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  11. Joachim Wagner, 2005. "Exports and Productivity: A survey of the evidence from firm level data," Working Paper Series in Economics 4, University of Lüneburg, Institute of Economics.
  12. A. Cassoni & M. Vaillant, 1992. "Estrategias empresariales y desempeño exportador," Documentos de Trabajo (working papers) 0192, Department of Economics - dECON.
  13. Jan De Loecker, 2004. "Do Exports Generate Higher Productivity? Evidence from Slovenia," LICOS Discussion Papers 15104, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  14. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
  15. Aw, Bee Yan & Chung, Sukkyun & Roberts, Mark J, 2000. "Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)," World Bank Economic Review, World Bank Group, vol. 14(1), pages 65-90, January.
  16. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  17. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  18. Mats GRANÉR & Anders ISAKSSON, 2009. "Firm Efficiency And The Destination Of Exports: Evidence From Kenyan Plant-Level Data," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 279-306.
  19. Boermans, Martijn Adriaan, 2010. "Learning-by-Exporting and Destination Effects: Evidence from African SMEs," MPRA Paper 22658, University Library of Munich, Germany, revised 09 May 2010.
  20. Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August.
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