Learning-by-Exporting: What We Know and What We Would Like to Know

Abstract

This article revises the thesis that exporting firms learn to be more innovative and efficient as they have contact with certain information flows from their foreign activity. It begins by exploring the connections between two concepts: self-selection and learning-by-exporting. The study proceeds with a comparative analysis of the most recent literature and presents common facts and key issues still open to debate. Learning-by-exporting should be measured directly using firms' innovative performance. Given the lack of suitable data on firms' innovative activities, most studies—although without consensus—have followed an indirect approach using productivity measures.

Keywords:

• learning-by-exporting
• self-selection
• total factor productivity

Notes

¹ See Wagner (2007) for a comprehensive review

² There are also studies on the relationship between trade liberalization and productivity growth in cities (e.g., Arias, 2003).

³ Governmental aid to exports is explored by several studies (e.g., Shelburne, 1997).

⁴ Although we do not intend here to discuss further such literature branch, see Sinkula (1994) for a comprehensive survey on this literature

⁵ As Alvarez and Lopez (2008) state, this transmission is costless and justifies the idea that investing in new markets, developing new products or training the labour force for international markets may have costs that are lower than the socially optimal level.

⁶ See Bernard et al. (2011) for a comprehensive survey on the new trade theories.

⁷ Cobb-Douglas production function was dominant but also translog functions were used: e.g., Bisten et al. 2000.

⁸ In a study for Spanish firms, Caldera finds that upgrading products firms are between 2% to 16% more likely to export, next period, than non-innovators.

⁹ The study covers countries in Asia (China), Latin America (Chile, Colombia), and the European Union (Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Slovenia, Spain, Sweden, and the United Kingdom), with contributions by economists in all these countries.

¹⁰ Eliasson et al. (2009) understand that the choice for export markets is a process of dynamic treatment assignment (as some firms choose to enter the export market early and others decide it later and some even prefer to never do it) but it is assimilated as a static process, thus generating a bias.

¹¹ In fact, since some firms do relatively better LBE during upturns in the business cycle while other firms do relatively better during downturns in the business cycle (e.g., Albornoz and Ercolani 2007).