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The Effect of Exporting on Creative Destruction and a Plant's Average Product Characteristics in Japan and Korea

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  • Chin Hee Hahn
  • Keiko Ito

Abstract

This paper examines whether exporting activity contributes to the promotion of creative destruction and the upgrading of a plant's product portfolio. We first present evidence that exporters tend to produce, on average, products with higher attributes than non‐exporters. Next, we find evidence that exporting improves a plant's average product attributes, utilizing the propensity score difference‐in‐difference matching technique. Further examination of the mechanism reveals that the positive effect of exporting on a plant's average product attributes is more likely to be realized through its effect of adding higher‐attribute products, a key feature of creative destruction within a firm, rather than through share changes among continuously produced products. The results suggest that exporting might have contributed to the sustained economic growth of Japan and Korea by promoting creative destruction

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  • Chin Hee Hahn & Keiko Ito, 2020. "The Effect of Exporting on Creative Destruction and a Plant's Average Product Characteristics in Japan and Korea," The Developing Economies, Institute of Developing Economies, vol. 58(3), pages 195-226, September.
    • Handle: RePEc:bla:deveco:v:58:y:2020:i:3:p:195-226
    DOI: 10.1111/deve.12247
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