Learning by Exporting: Evidence from India

Publication | August 2013

Exporting firms are known to be "better" than non-exporting firms. But is it that better firms become exporters or is it that firms become better after they start exporting? 

The empirical evidence on learning by exporting is mixed. In this paper, it examines whether productivity growth among Indian exporters is higher than that of non-exporters. After controlling for self-selection into exporting, there is no evidence for learning by exporting in a panel of manufacturing firms. There is also no evidence of heterogeneity in learning by exporting with regard to age, size, or productivity. The study finds that exporters grow bigger at a significantly higher rate than their domestic counterparts. But the growth in size does not appear to translate into growth in productivity after entry into foreign markets. Instead, exporters exhibit a boost in productivity 1 year prior to entering export markets.

Contents 

  • Abstract
  • Introduction
  • Empirical Research on Firm Productivity and Exporting
  • Data and Descriptive Statistics
  • Results
  • Robustness Tests
  • Conclusion and Policy Implications
  • References