Superiority of Exporters and the Causality Between Exporting and Firm Characteristics in Vietnam

Abstract

The study in this paper is on the causal relationship between export activities of firms and their characteristics in a transition country that is pursuing export-led growth strategies and experiencing a fast track of trade liberalization. For this purpose, we examine the superiority of exporters using a panel of firm-level data of manufacturing firms in Vietnam. We observe that exceptional performance of exporters, especially in TFP, does prevail in this country. Via testing self-selection hypothesis using a random-effects dynamic probit model to examine the causality from firm characteristics to export probability, we find significantly positive impacts of factors such as firm size, age or foreign ownership but not that of TFP. However, TFP superiority of exporters is satisfactorily explained by the existence of learning-by-exporting effects that are tested in a multivariate analysis using matching technique in combination with difference-in-differences approach. Besides contributing an empirical analysis to heterogeneous-firm trade theories, this study gives us some insights into the interpretation of mixed findings in macro-analysis of the effects of exports on growth in Vietnam.

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