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Exports, investment and production growth: A dynamic heterogeneous firm model with learning and entry costs

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  • Ruohan Wu
  • Mario Javier Miranda

Abstract

We analyze a firm’s joint decision to export and invest using a model that incorporates the essential features of self-selection and learning-by-exporting theories of firm-level dynamics. We calibrate the model to 2002--2007 Chilean manufacturing plant data and simulate it under different assumptions, finding that neither self-selection nor learning-by-exporting alone can adequately explain the observed cross-sectional relationship between firm level exports and capital, favoring instead a model that allows both mechanisms to work in tandem.

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  • Ruohan Wu & Mario Javier Miranda, 2015. "Exports, investment and production growth: A dynamic heterogeneous firm model with learning and entry costs," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(8), pages 1037-1053, December.
    • Handle: RePEc:taf:jitecd:v:24:y:2015:i:8:p:1037-1053
    DOI: 10.1080/09638199.2014.998856
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    1. Gkypali, Areti & Love, James H. & Roper, Stephen, 2021. "Export status and SME productivity: Learning-to-export versus learning-by-exporting," Journal of Business Research, Elsevier, vol. 128(C), pages 486-498.
    2. Ruohan Wu & Mario J. Miranda, 2023. "Dynamic impacts of intermittent trade conflicts," The World Economy, Wiley Blackwell, vol. 46(3), pages 681-701, March.
    3. Stephen Esaku, 2020. "Investments, export entry and export intensity in small manufacturing firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(4), pages 677-697, December.

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