Does the pursuit of more complex products contribute to the productivity of exporting firms?

Uku Varblane and Sven-Kristjan Bormann

International Journal of Manpower, 2019, vol. 40, issue 6, 1131-1150

Abstract: Purpose - The purpose of this paper is to contribute to the literature on learning by exporting by investigating whether an increase in the complexity of exported products contributes to higher productivity at the firm level. Design/methodology/approach - The study implements an empirical analysis for Estonian manufacturing firms involved in exporting for the period 2008–2014, adding product complexity as an explanatory variable in the production function estimation. An increase in product complexity is interpreted as an indirect proxy for an increase in firm capabilities, capturing both tangible and intangible elements of competitiveness and reflecting the learning effects. Findings - A relatively weak correlation between product complexity and productivity was found using a simple OLS estimation – exporters with higher product complexity have generally higher productivity levels. Somewhat surprisingly, no evidence for the learning by exporting was found among exporters, meaning that the increased complexity does not seem to be a channel for productivity upgrading. This result seems to be robust, irrespective of estimation methods and sampling preferences. Research limitations/implications - The sample is representative of exporting firms. Practical implications - The results show that the pursuit to more complex product does not necessarily contribute to productivity for exporting firms. The findings suggest that the firm-level upgrading due to increased export orientation is likely to take place through the other channels like moving up in global value chains and differentiating by product quality. Originality/value - This is one of the first papers to investigate the effect of product complexity on productivity at a firm level. The results provide new insights into the learning-by-exporting hypothesis, with focus on potential learning among the existing exporters.

Keywords: Productivity; Global value chains; Product complexity; Manufacturing; Learning by exporting (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-03-2018-0092

DOI: 10.1108/IJM-03-2018-0092

Access Statistics for this article

International Journal of Manpower is currently edited by Professor Adrian Ziderman

More articles in International Journal of Manpower from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().