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.
You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.
An online appendix is available for this publication.
This paper was revised on October 7, 2013