Export Behavior and Productivity Growth: Evidence from Italian Manufacturing Firms

Abstract

This paper provides econometric evidence supporting the hypothesis that export behavior cause learning effects. The idea is that exporting firms obtain efficiency gains through a variety of channels, among which are international knowledge and technology spillovers and the exploitation of economies of scale in a larger market. Following the existing literature, learning-by-exporting is modeled as a change, induced by export behavior, in the stochastic process governing firm's productivity. Empirically, this is implemented specifying cross-section regressions of TFP growth on measures of export behavior, controlling for past TFP growth and other firm's characteristics. Using data on a sample of Italian manufacturing firms, it is found, consistently with most previous works, that exporters do not exhibit faster TFP growth. Nevertheless, TFP growth has a positive and significant relation with firm's export intensity. In other words, only firms with a substantial involvement in exporting activity have a significantly higher rate of TFP growth. This result, consistent with a similar work using a sample of Chinese firms, suggests that learning-by-exporting is by no means simply the outcome of the presence into the export market. Indeed, learning requires commitment and experience of foreign activities, which in turn are associated with the relative importance of foreign activities and the length of time since entry in the export market.