How You Export Matters: Export Mode, Learning and Productivity in China

56 Pages Posted: 18 May 2015 Last revised: 1 May 2021

See all articles by Xue Bai

Xue Bai

Brock University - Department of Economics

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Hong Ma

Tsinghua University - School of Economics & Management

Date Written: May 2015

Abstract

This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 30 and 37 percent lower respectively.

Suggested Citation

Bai, Xue and Krishna, Kala and Ma, Hong, How You Export Matters: Export Mode, Learning and Productivity in China (May 2015). NBER Working Paper No. w21164, Available at SSRN: https://ssrn.com/abstract=2607354

Xue Bai (Contact Author)

Brock University - Department of Economics

500 Glenridge Avenue
St. Catherines, Ontario L2S 3A1
Canada

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Hong Ma

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

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