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Export Premium, Self-selection and Learning-by-Exporting: Evidence from Chinese Matched Firms

Authors


  • We are grateful to two anonymous referees of this journal for their constructive comments on an earlier version of this paper; and also thanks are due to Pedro Martins, Richard Kneller, Huw Edwards, Teresa da Silva Lopes, Simon Mohun and Yan Wu for their detailed comments, and Alessandra Guariglia, Dick Allard, Martha Prevezer, Liming Wang, and participants at the workshop (2008) at Queen Mary University of London, Chinese Economic Association Conference (CEA) (2008) at the University of Cambridge and All China Economics Conference (ACE) (2007) in Hong Kong, for their comments. Also we acknowledge the investment climate department of the World Bank for providing data. The usual disclaimer applies.

Abstract

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non-exporters), selection-into-exporting (more productive firms are ones that tend to become exporters) and learning-by-exporting (new export market entrants have higher productivity growth than non-exporters in the post-entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non-exporters, allowing an adequate ‘like-for-like’ comparison. We also use the difference-in-difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non-exporters in the post-entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self-selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.

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