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Export and productivity in Chinese manufacturing: A semiparametric smooth coefficient approach

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  • Li, Mingyang
  • Kumbhakar, Subal C.

Abstract

This paper revisits the export–productivity puzzle in Chinese manufacturing using a semiparametric smooth coefficient (SPSC) model and firm-level panel data. Our main contribution lies in addressing several critical specification issues to ensure the validity and robustness of the results. We show that, unlike the positive export premium documented in other settings, Chinese exporters exhibit lower productivity than non-exporters. By addressing input endogeneity with proxy-variable methods and explicitly accounting for zero-export firms, our estimates are both robust and economically well-grounded. A distinctive feature of the SPSC framework is its ability to isolate input-specific channels — particularly capital and labor — through which exports influence productivity.

Suggested Citation

  • Li, Mingyang & Kumbhakar, Subal C., 2025. "Export and productivity in Chinese manufacturing: A semiparametric smooth coefficient approach," Economics Letters, Elsevier, vol. 256(C).
    • Handle: RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004811
    DOI: 10.1016/j.econlet.2025.112644
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    Keywords

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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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