A Note on Detecting Learning by Exporting

Jan De Loecker

NBER Working Paper No. 16548
Issued in November 2010
NBER Program(s):   ITI   PR

Learning by exporting refers to the mechanism whereby firms improve their performance (productivity) after entering export markets. Although this mechanism is often mentioned in policy documents, a significant share of econometric studies has not found evidence for this hypothesis. This paper shows that the methods used to come to the latter conclusion suffer from a large internal inconsistency: they rely on an exogenous evolving productivity process. I show how recent proxy estimators can accommodate endogenous productivity processes such as learning by exporting. I rely on my framework to discuss the bias introduced by ignoring such a process and how adjusting for it can lead to detect significant productivity gains upon export entry. I estimate my model on standard firm-level data and find substantial additional productivity gains from entering export markets.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX