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Factor-Biased Efficiency Gains from Exporting: Evidence from Colombia

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  • Joonkyo Hong
  • Davide Luparello

Abstract

This study examines whether exporting enhances efficiency and favors specific inputs. We develop a production function model within a dynamic exporting and investment framework, capturing factor-biased technical changes. Using Kalman filtering to address measurement error and propensity score matching to control for self-selection into exporting, we analyze Colombia's manufacturing sectors from 1981 to 1991. New exporters achieve a 4% annual increase in labor-augmenting and unskilled labor relative productivity, with no change in Hicks-neutral productivity. Unskilled labor-augmenting productivity grows by 8% annually, aligning with machinery asset expansion, while TFP rises by 3% per year.

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  • Joonkyo Hong & Davide Luparello, 2024. "Factor-Biased Efficiency Gains from Exporting: Evidence from Colombia," Papers 2407.14016, arXiv.org, revised Feb 2025.
    • Handle: RePEc:arx:papers:2407.14016
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