Export Premium, Self-selection and Learning-by-Exporting: Evidence from Chinese Matched Firms

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non-exporters), selection-into-exporting (more productive firms are ones that tend to become exporters) and learning-by-exporting (new export market entrants have higher productivity growth than non-exporters in the post-entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non-exporters, allowing an adequate ‘like-for-like’ comparison. We also use the difference-in-difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non-exporters in the post-entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self-selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.