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Scope for Export-Led Growth in a Large Emerging Economy: Is India Learning by Exporting?

  • Saleh S. Tabrizy
  • Natalia Trofimenko
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    The ongoing debate of the literature on learning-by-exporting is whether the conspicuously stellar performance of exporters relative to non-exporters can be, at least partially, attributed to the horizonwidening interaction with foreign consumers and learning of cost-efficient and quality enhancing production methods, or whether all of the differential is due to the self-selection of best firms into exporting. This study uses data from the 1998-2008 Prowess Database to examine how firm-level productivity paths differ between firms with varying degrees of exposure to international trade in India, the country to rank third among the most dominant economies by the year 2050. Having used Levinsohn-Petrin measure of total factor productivity and a proxy for labor productivity, we find significant ex-ante differences in productivity between exporters and non-exporters and no difference in the ex-post productivity gains. These findings suggest that even in a large emerging economy with strong absorptive capacity and a significant catch-up potential, learning-by-exporting effects are nonexistent. Rather, self-selection of more productive firms into exporting explains the productivity differential between exporters and non-exporters

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    File URL: https://www.ifw-members.ifw-kiel.de/publications/scope-for-export-led-growth-in-a-large-emerging-economy-is-india-learning-by-exporting-1/kwp-1633.pdf
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    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1633.

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    Length: 28 pages
    Date of creation: Jul 2010
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    Handle: RePEc:kie:kieliw:1633
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    1. The International Study Group on Exports and Productivity, . "Exports and Productivity – Comparable Evidence for 14 Countries," Discussion Papers 07/41, University of Nottingham, GEP.
    2. Victor Gomes & Roberto Ellery Jr, 2005. "Perfil das Exportações, Produtividade e Tamanho das Firmas no Brasil," Discussion Papers 1087, Instituto de Pesquisa Econômica Aplicada - IPEA.
    3. Iacovone, Leonardo & Javorcik, Beata, 2012. "Getting Ready: Preparation for Exporting," CEPR Discussion Papers 8926, C.E.P.R. Discussion Papers.
    4. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
    5. Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
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