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Productivity and Learning-by-exporting: A Firm-level Analysis of Indian Manufacturing

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  • The authors greatly appreciate and would like to thank the editor for making very constructive comments and helping in the revision of the previous draft. The authors would like to thank the participants of International Conference on Globalization, Growth and Development in Asia, organised by the Leverhulme Centre for Research on Globalisation and Economics Policy, University of Nottingham, Malaysia Campus, 14–15 January 2009, and also participants of the 6th Annual International Industrial Organization Conference at Marymount University, Washington, DC 16–18 May 2008, for their comments and suggestions.

Abstract

In this paper, we examine whether firms become productive by learning through exporting. To this end, we estimate the production function using microdata of Indian manufacturing firms operating in the period 1991–2001. In contrast to studies on developed countries, our results provide evidence that Indian manufacturing firms are experiencing a rise in productivity through entering export markets and thus experience the learning effect. We also find that there is a productivity rise prior to exporting. Therefore, our results also support the self-selection mechanism for exporting.

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