How You Export Matters: Export Mode, Learning and Productivity in China

Xue Bai · Kala Krishna · Hong Ma

52 citations0/0 files storedNational Bureau of Economic Research

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Global trade and economics International Business and FDI Economic and Technological Innovation

Abstract

This paper shows that how firms export (directly or indirectly via intermediaries) matters.We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode.We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher.Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 30 and 37 percent lower respectively.

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References

2003Estimating Production Functions Using Inputs to Control for Unobservables 1999Exceptional exporter performance: cause, effect, or both?1989Entry and Exit Decisions under Uncertainty 1998Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco 2007Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia 2010Imported Intermediate Inputs and Domestic Product Growth: Evidence from India 2007Do exports generate higher productivity? Evidence from Slovenia 2000Estimating Production Functions Using Inputs to Control for Unobservables

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