Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Two not mutually exclusive hypotheses can explain the empirically established export premium: self-selection of more productive firms into export markets and learning-by-exporting. We reassess the learning-by-exporting hypothesis and maintain that the scope for learning is related to the persistence and the intensity of a firm’s exporting activity. Using a rich panel of Swedish manufacturing firms, we show that there is a causality going from exports to productivity only for persistent exporters with high export-intensity. No such relationship is found for either temporary exporters or persistent exporters with low export-intensity. Learning-by-exporting in the form of a causality going from exports to productivity only pertains to firms that persistently export a large fraction of their sales on a global scale. Results are robust to the inclusion of several firm characteristics such as imports, physical capital, firm size, skilled labour, capital structure, corporate ownership structure, and industry classification.

Keywords: export productivity premium; learning-by-exporting; productivity dynamics; panel data; dynamic models; temporary and persistent exporters

JEL-codes: C16; F14; L25; O33

26 pages, October 13, 2008

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