Factor-Biased Efficiency Gains from Exporting: Evidence from Colombia

Joonkyo Hong and Davide Luparello

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Abstract: This study examines whether exporting enhances efficiency and favors specific inputs. We develop a production function model within a dynamic exporting and investment framework, capturing factor-biased technical changes. Using Kalman filtering to address measurement error and propensity score matching to control for self-selection into exporting, we analyze Colombia's manufacturing sectors from 1981 to 1991. New exporters achieve a 4% annual increase in labor-augmenting and unskilled labor relative productivity, with no change in Hicks-neutral productivity. Unskilled labor-augmenting productivity grows by 8% annually, aligning with machinery asset expansion, while TFP rises by 3% per year.

Date: 2024-07, Revised 2025-02
New Economics Papers: this item is included in nep-eff and nep-int
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