Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs

This study examines whether high productivity is either the cause or a consequence of a business’s decision to export. Using a balanced panel dataset from 2005-2009 for Vietnamese manufacturing private SMEs, our empirical results find strongly statistical evidence for the self-selection of more productive firms into the export market. The alternative hypothesis, learning by exporting, was shown to be invalid through employing fixed effect panel data estimation, and fixed effect Instrumental Variable regression. By going beyond the previous literature, this study also reveals that export participation has a statistically insignificant impact on technical efficiency, technical progress, and scale change. Last but not least, improvement in innovative capacity and network with foreign customers is also important determinants in boosting the export participation of private enterprises.