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Do domestic and foreign exporters differ in learning by exporting? Evidence from China

Author

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  • DU, Julan
  • LU, Yi
  • TAO, Zhigang
  • YU, Linhui

Abstract

In view of the importance of intra-firm trade and export-platform FDI conducted by multinationals, we investigate how domestic firms and foreign affiliates exhibited differential impacts of export entry and exit on productivity changes. Using a comprehensive dataset from China's manufacturing industries, we employ the Olley–Pakes method to estimate firm-level TFP and the matching techniques to isolate the impacts of export participation on firm productivity. Robust evidence is obtained that domestic firms displayed significant productivity gains (losses) upon export entry (exit), whereas foreign affiliates showed no evident TFP changes. Moreover, the productivity gains for domestic export starters were more pronounced in high- and medium-technology industries than in low-technology ones. We explain our findings from the perspective of the technology gap theory after considering processing trade and the fragmentation of production stages in the era of globalization.

Suggested Citation

  • DU, Julan & LU, Yi & TAO, Zhigang & YU, Linhui, 2012. "Do domestic and foreign exporters differ in learning by exporting? Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 296-315.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:2:p:296-315
    DOI: 10.1016/j.chieco.2011.12.003
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    More about this item

    Keywords

    Exporter heterogeneity; Export entry and exit; Total factor productivity; Foreign affiliates;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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