Export Premium, Self‐selection and Learning‐by‐Exporting: Evidence from Chinese Matched Firms

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non‐exporters), selection‐into‐exporting (more productive firms are ones that tend to become exporters) and learning‐by‐exporting (new export market entrants have higher productivity growth than non‐exporters in the post‐entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non‐exporters, allowing an adequate ‘like‐for‐like’ comparison. We also use the difference‐in‐difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non‐exporters in the post‐entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self‐selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.