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A Note on Detecting Learning by Exporting

  • De Loecker, Jan

Learning by exporting refers to the mechanism whereby firms improve their performance (productivity) after entering export markets. Although this mechanism is often mentioned in policy documents, a significant share of econometric studies has not found evidence for this hypothesis. This paper shows that the methods used to come to the latter conclusion suffer from a large internal inconsistency: they rely on an exogenous evolving productivity process. I show how recent proxy estimators can accommodate endogenous productivity processes such as learning by exporting. I rely on my framework to discuss the bias introduced by ignoring such a process and how adjusting for it can lead to detect significant productivity gains upon export entry. I estimate my model on standard firm-level data and find substantial additional productivity gains from entering export markets.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8121.

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Date of creation: Nov 2010
Date of revision:
Handle: RePEc:cpr:ceprdp:8121
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  1. Verhoogen, Eric A, 2007. "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector," CEPR Discussion Papers 6385, C.E.P.R. Discussion Papers.
  2. 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.
  3. Jan De Loecker, 2011. "Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity," Econometrica, Econometric Society, vol. 79(5), pages 1407-1451, 09.
  4. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  5. Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
  6. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
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