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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, with gains favoring specific production inputs. We propose a production function model within a dynamic exporting and investment framework, capturing factor-biased technical changes. Using Kalman filtering to isolate Hicks-neutral productivity from measurement error and applying propensity score matching to address endogeneity from self-selection into exporting, we analyze Colombia's manufacturing sectors from 1981 to 1991. Results show that past exporting raises Hicks-neutral productivity by 8% and unskilled labor-augmenting efficiency by 4%, while reducing skilled labor-augmenting productivity by 3%. Additionally, new exporters achieve a 20% increase in Hicks-neutral and unskilled labor-augmenting productivity within four years.

Suggested Citation

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