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Exporting and Performance of Plants: Evidence from Korean Manufacturing

  • Chin Hee Hahn
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    This study examines the relationship between exporting and various performance measures including total factor productivity, using the annual plant-level panel data on Korean manufacturing sector during the period of 1990 to 1998. The two key questions examined are whether exporting improves productivity (learning) and/or whether more productive plants export (self-selection). This study provides evidence supporting both self-selection and learning-by-exporting effects, with both effects being more pronounced at around the time of entry into and exit from the export market. Thus, positive and robust cross-sectional correlation between exporting and total factor productivity is accounted for by both selection and learning effects. These results are in contrast with Aw, Chung, and Roberts (2000) who do not find any strong evidence of self-selection or learning in Korea. Similar effects are observed when shipments or employment is considered as a performance measure. Overall, this study suggests that the benefits from exporting have been realized not only through resource reallocation channel but also TFP channel in Korea.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10208.

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    Date of creation: Jan 2004
    Date of revision:
    Publication status: published as Ito, Takatoshi and ANdrew K. Rose (eds.) International Trade in East Asia NBER-East Asia Seminar on Economics, vol. 14. Chicago and London: University of Chicago Press, 2005.
    Handle: RePEc:nbr:nberwo:10208
    Note: ITI
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    1. Aw, B.Y. & Batra, G., 1998. "Technology, Exports and Firm Efficiency in Taiwanese Manufacturing," Papers 2, Pennsylvania State - Department of Economics.
    2. Bernard, A. & Wagner, J., 1996. "Exports and Success in German Manufacturing," Working papers 96-10, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Feeney, JoAnne, 1999. "International risk sharing, learning by doing, and growth," Journal of Development Economics, Elsevier, vol. 58(2), pages 297-318, April.
    4. Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August.
    5. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
    6. Ben-David, Dan & Loewy, Michael B, 1998. " Free Trade, Growth, and Convergence," Journal of Economic Growth, Springer, vol. 3(2), pages 143-70, June.
    7. Haddad, Mona, 1993. "How trade liberalization affected productivity in Morocco," Policy Research Working Paper Series 1096, The World Bank.
    8. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning By Exporting Important? Micro-Dynamic Evidence From Colombia, Mexico, And Morocco," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 903-947, August.
    9. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
    10. Andrew B. Bernard & J. Bradford Jensen, 1999. "Exporting and Productivity," NBER Working Papers 7135, National Bureau of Economic Research, Inc.
    11. Aw, Bee Yan & Chung, Sukkyun & Roberts, Mark J, 2000. "Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)," World Bank Economic Review, World Bank Group, vol. 14(1), pages 65-90, January.
    12. Bee Yan Aw & Geeta Batra, 1998. "Technology, Exports And Firm Efficiency In Taiwanese Manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 93-113.
    13. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
    14. Chen, Tain-jy & Tang, De-piao, 1987. "Comparing technical efficiency between import-substitution-oriented and export-oriented foreign firms in a developing economy," Journal of Development Economics, Elsevier, vol. 26(2), pages 277-289, August.
    15. Andrew B. Bernard & J. Bradford Jensen, 1994. "Exporters, Jobs and Wages in U.S. Manufacturing: 1976-1987," Working papers 95-7, Massachusetts Institute of Technology (MIT), Department of Economics.
    16. James R. Tybout, 2001. "Plant- and Firm-Level Evidence on "New" Trade Theories," NBER Working Papers 8418, National Bureau of Economic Research, Inc.
    17. Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
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