Exporting and plant-level efficiency gains: It’s in the measure

Alvaro Garcia-Marin, Nico Voigtländer

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

While there is strong evidence that more productive plants select into exporting, the literature has struggled to identify export-related efficiency gains within plants. We show that this is due to the common use of revenue-based productivity measures (TFPR): more efficient producers tend to charge lower prices, leading to a downward bias in TFPR. Using census panels of Chilean, Colombian, and Mexican manufacturing plants, we find sizable efficiency gains after export entry based on efficiency measures that are not affected by output prices. Evidence suggests that a complementarity between exporting and investment in technology is an important driver of these gains.

Original languageEnglish
Pages (from-to)1777-1825
Number of pages49
JournalJournal of Political Economy
Volume127
Issue number4
DOIs
StatePublished - 1 Aug 2019
Externally publishedYes

Bibliographical note

Funding Information:
Universiteit Leuven, Mannheim, Frankfurt, Pontificia Universidad Católica de Chile, Princeton, Rocky Mountain Empirical Trade Conference, Trade, Integration, and Growth Network Conference, University of California, Los Angeles, and Universidad de Chile for helpful comments and suggestions. Claudio Bravo-Ortega and Lucas Navarro kindly shared data to complement our Chilean plant-product panel. Henry Alexander Ballesteros and Oscar Fentanes provided excellent research assistance in Bogotá and Mexico City, respectively. We gratefully acknowledge research support from the UCLA Ziman Center’s Rosalinde, Arthur Gilbert Program in Real Estate, Finance and Urban Economics, and the Chilean Comisión Nacional de Investigación Científica y Tecnológica through project Fondecyt Iniciación en Investiga-ción 11150432. Data are provided as supplementary material online.

Funding Information:
We would like to thank the editor, Ali Horta?su, two anonymous referees, as well as Roberto ?lvarez, Johannes Van Biesebroeck, Joaquin Blaum, Lorenzo Caliendo, Donald Davis, Jan De Loecker, Gilles Duranton, Eduardo E. Engel, Amit Khandelwal, Edward Leamer, Steve Redding, Ariell Reshef, Andr?s Rodr?guez-Clare, Chad Syverson, and Eric Verhoogen, as well as seminar audiences at Central European University, Chicago Booth, Copenhagen Business School, Columbia, Centre de Recerca in Economia Internacional, Dartmouth, the Forum for Research in Empirical International Trade Conference in Virginia, Katholieke Universiteit Leuven, Mannheim, Frankfurt, Pontificia Universidad Cat?lica de Chile, Princeton, Rocky Mountain Empirical Trade Conference, Trade, Integration, and Growth Network Conference, University of California, Los Angeles, and Universidad de Chile for helpful comments and suggestions. Claudio Bravo-Ortega and Lucas Navarro kindly shared data to complement our Chilean plant-product panel. Henry Alexander Ballesteros and Oscar Fentanes provided excellent research assistance in Bogot? and Mexico City, respectively. We gratefully acknowledge research support from the UCLA Ziman Center?s Rosalinde, Arthur Gilbert Program in Real Estate, Finance and Urban Economics, and the Chilean Comisi?n Nacional de Investigaci?n Cient?fica y Tecnol?gica through project Fondecyt Iniciaci?n en Investigaci?n 11150432. Data are provided as supplementary material online.

Publisher Copyright:
© 2019 by The University of Chicago. All rights reserved.

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