Trade and productivity: Self-selection or learning-by-exporting in India

Jamal Haidar ()

Economic Modelling, 2012, vol. 29, issue 5, 1766-1773

Abstract: Recent literature tried to explain the Indian growth miracle in different ways, ranging from trade liberalization to industrial reforms. Using data on Indian manufacturing firms, this paper analyzes the relationship between firm's productivity and export market participation during 1991–2004. While it provides evidence of the self-selection hypothesis by showing that more productive firms become exporters, the results do not show that entry into export markets enhances productivity. The paper examines the explanation of self selection hypothesis for total factor productivity differences across 33,510 exporting and non-exporting firms. It uses propensity score matching to test the learning-by-exporting hypothesis. In line with the prediction of recent heterogeneous firm models of international trade, the main finding of the paper is: more productive firms become exporters but it is not the case that learning by exporting is a channel fuelling growth in Indian manufacturing.

Keywords: Trade; Learning-by-exporting hypothesis; Self-selection hypothesis; Total factor productivity; Causality; Heterogeneous firm model (search for similar items in EconPapers)
JEL-codes: C12 F10 F20 F40 L1 L2 L6 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

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Related works:
Working Paper: Trade and productivity: self-selection or learning-by-exporting in India (2012)
Working Paper: Trade and productivity: self-selection or learning-by-exporting in India (2012)
Working Paper: Trade and productivity: self-selection or learning-by-exporting in India (2012)
Working Paper: Trade and Productivity: Self-Selection or Learning-by-Exporting in India (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:5:p:1766-1773

DOI: 10.1016/j.econmod.2012.05.005

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