Our results are also consistent with those in Bernard and Jensen (2004); they found
that in US manufacturing new entrants into export markets are rewarded with a surge
in TFP especially during the first year post entry, and thereafter their productivity path
becomes flatter, following that of continuous exporters (although with significantly
lower productivity levels). In contrast, those that exit from exporting are characterised
by a substantial deterioration in productivity to eventually resemble the flat growth
trajectory of continuous non-exporters.
The aggregate results for the ‘control function’ model in Table 5 tend to be larger,
after including the sample selectivity correction terms, while the results for the
matched sample are generally lower than those obtained using the standard IV GMM
model. Thus, there is some uncertainty as to the overall size of the ‘learning-by-
exporting’ effect, although our results show that nonetheless this effect was present
and important to UK firms during 1996-2004.
VI. Conclusions
This study provides an assessment of the extent to which productivity growth within
firms may be stimulated by exporting. This involves measuring the impact on
productivity of preparation for entering overseas markets (i.e. the self-selection
hypothesis), as well as looking at productivity effects, which may occur following
overseas market entry (i.e. ‘learning-by-exporting’ effect). In particular, we exploit
the panel aspects of the data when undertaking appropriate econometric modelling,
and also use techniques that ensure issues of endogeneity and sample selection are
taken into account.
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