Exporting and Plant-Level Efficiency Gains: It's in the Measure
While there is strong evidence for productivity-driven selection into exporting, previous research has mostly failed to identify export-related efficiency gains within plants. This nonresult is derived from revenue productivity, thus also reflecting prices. Using a census panel of Chilean manufacturing plants, we first confirm the non-result for revenue productivity. We then compute plant-product level marginal cost as an efficiency measure that is not affected by prices. We find within-plant efficiency gains of 15-25%, the same order of magnitude as selection effects across plants. Evidence suggests that technology upgrading in combination with export entry is an important driver behind these gains.
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A data appendix is available at http://www.nber.org/data-appendix/w19033
This paper was revised on October 7, 2013
Document Object Identifier (DOI): 10.3386/w19033
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