Working Paper: NBER ID: w5715
Authors: Sofronis Clerides; Saul Lath; James Tybout
Abstract: Is there any empirical evidence that firms become more efficient after becoming exporters? Do firms that become exporters generate positive spillovers for domestically-oriented producers? In this paper we analyze the causal links between exporting and productivity using firm-level panel data from three semi-industrialized countries. Representing export market" participation and production costs as jointly dependent autoregressive processes, we look for evidence that firms' stochastic cost processes shift when they break into foreign markets. We find that relatively efficient firms become exporters, but firms' unit costs are not affected by previous export market participation. So the well-known efficiency gap between exporters and non-exporters is due to self-selection of the more efficient firms into the export market, rather than learning by exporting. Further, we find some evidence that exporters reduce the costs of breaking into foreign markets for domestically oriented producers, but they do not appear to help these producers become more efficient.
Keywords: Exporting; Productivity; Learning by Exporting; Microdynamic Evidence
JEL Codes: F14; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| efficient firms (D22) | export participation (F10) |
| export participation (F10) | productivity changes (O49) |
| export participation (F10) | unit costs reduction (D61) |
| exporters (F10) | costs for domestically-oriented producers (L11) |
| self-selection (C52) | efficiency gap between exporters and non-exporters (F14) |