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Learning by Export: Does the presence of foreign affiliate companies matter?

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  • HOSONO Kaoru
  • MIYAKAWA Daisuke
  • TAKIZAWA Miho

Abstract

This paper investigates the effect of export activities on firm performance by taking into account whether or not exporter firms' affiliated companies (i.e., their own subsidiaries and parent companies' branches) are located in the export markets. To single out a causal impact on firm performance running from starting export, we employ propensity-score matching difference-in-differences estimation. Using a unique firm-level panel dataset that allows us to identify firms starting export and firms staying in domestic markets as well as their affiliated firms' overseas activities, we find that firms exhibited better performance than their non-exporter counterparts prior to export, and that the difference in the performance, especially productivity, significantly widened after export. Such improvement in productivity originated from starting export was found to be statistically and economically significant when exporter firms did not have affiliated firms in overseas markets. On the other hand, the performance gain from export was highly heterogeneous and hence statistically insignificant in the case when these affiliated firms were present in overseas market. The former type of firm fits well to test the learning-by-exporting mechanism hypothesis since it accessed the export markets for the first time by exporting.

Suggested Citation

  • HOSONO Kaoru & MIYAKAWA Daisuke & TAKIZAWA Miho, 2015. "Learning by Export: Does the presence of foreign affiliate companies matter?," Discussion papers 15053, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:15053
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    References listed on IDEAS

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    1. 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.
    2. Kiyota, Kozo & Urata, Shujiro, 2008. "The role of multinational firms in international trade: The case of Japan," Japan and the World Economy, Elsevier, vol. 20(3), pages 338-352, August.
    3. Miguel Manjón & Juan Máñez & María Rochina-Barrachina & Juan Sanchis-Llopis, 2013. "Reconsidering learning by exporting," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 5-22, March.
    4. Jan De Loecker, 2013. "Detecting Learning by Exporting," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 1-21, August.
    5. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm‐level Data," The World Economy, Wiley Blackwell, vol. 30(1), pages 60-82, January.
    6. Kazunobu Hayakawa & Tomohiro Machikita & Fukunari Kimura, 2012. "Globalization And Productivity: A Survey Of Firm‐Level Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 332-350, April.
    7. Fukunari Kimura & Kozo Kiyota, 2006. "Exports, FDI, and Productivity: Dynamic Evidence from Japanese Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 695-719, December.
    8. Naomitsu Yashiro & Daisuke Hirano, 2009. "Do All Exporters Benefit from Export Boom? -Evidence from Japan," KIER Working Papers 689, Kyoto University, Institute of Economic Research.
    9. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
    10. Sébastien Lechevalier & Keiko Ito, 2010. "Why some firms persistently out-perform others?," Post-Print halshs-00657002, HAL.
    11. Jože P. Damijan & Črt Kostevc & Sašo Polanec, 2010. "From Innovation to Exporting or Vice Versa?," The World Economy, Wiley Blackwell, vol. 33(3), pages 374-398, March.
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    Cited by:

    1. Moisă ALTĂR & Ana-Maria CAZACU, 2016. "Testing Self-Selection And Learning By Exporting Hypotheses. The Case Of Romania," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(1), pages 5-22.
    2. Johannes Schwarzer, 2017. "The Effects of Exporting on Labour Productivity: Evidence from German Firms," Working Papers 1702, Council on Economic Policies.

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