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How you export matters: Export mode, learning and productivity in China

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  • Bai, Xue
  • Krishna, Kala
  • Ma, Hong

Abstract

This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 26 and 33% lower respectively.

Suggested Citation

  • Bai, Xue & Krishna, Kala & Ma, Hong, 2017. "How you export matters: Export mode, learning and productivity in China," Journal of International Economics, Elsevier, vol. 104(C), pages 122-137.
  • Handle: RePEc:eee:inecon:v:104:y:2017:i:c:p:122-137
    DOI: 10.1016/j.jinteco.2016.10.009
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    More about this item

    Keywords

    Export modes; Productivity evolution; Learning-by-exporting; Dynamic discrete choice;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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