Kiel Working Papers, Kiel Institute for World Economics
No 1633:
Scope for Export-Led Growth in a Large Emerging Economy: Is India Learning by Exporting?
Saleh S. Tabrizy and Natalia Trofimenko
Abstract: The ongoing debate of the literature on
learning-by-exporting is whether the conspicuously stellar performance of
exporters relative to non-exporters can be, at least partially, attributed
to the horizonwidening interaction with foreign consumers and learning of
cost-efficient and quality enhancing production methods, or whether all of
the differential is due to the self-selection of best firms into exporting.
This study uses data from the 1998-2008 Prowess Database to examine how
firm-level productivity paths differ between firms with varying degrees of
exposure to international trade in India, the country to rank third among
the most dominant economies by the year 2050. Having used Levinsohn-Petrin
measure of total factor productivity and a proxy for labor productivity, we
find significant ex-ante differences in productivity between exporters and
non-exporters and no difference in the ex-post productivity gains. These
findings suggest that even in a large emerging economy with strong
absorptive capacity and a significant catch-up potential,
learning-by-exporting effects are nonexistent. Rather, self-selection of
more productive firms into exporting explains the productivity differential
between exporters and non-exporters
Keywords: trade, total factor productivity, exports, export-led growth, learning by exporting; (follow links to similar papers)
JEL-Codes: D21,; F10,; L60; (follow links to similar papers)
28 pages, July 2010
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