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How You Export Matters: Export Mode, Learning and Productivity in China

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  • Xue Bai
  • Kala Krishna
  • Hong Ma

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 30 and 37 percent lower respectively.

Suggested Citation

  • Xue Bai & Kala Krishna & Hong Ma, 2015. "How You Export Matters: Export Mode, Learning and Productivity in China," NBER Working Papers 21164, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21164
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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