Product differentiation,export participation and productivity growth: Evidence from Chinese manufacturing firms |
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| Institution: | 1. School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing 100081, PR China;2. Department of International Economics & Trade, Nanjing University, 22 Hankou Road, Nanjing, 210093, PR China;1. Department of Marketing and Logistics Management, Chihlee University of Technology, Taiwan;2. Statistical Office, Ministry of the Transportation and Communications, Taiwan;3. Department of Applied Economics, National Chiayi University, Taiwan;1. The College of Economics and Trade, Hunan University, North Campus, Shi Jia Chong, Changsha, Hunan 410079, PR China;2. Center for Economics, Finance and Management Studies, Hunan University, North Campus, Shi Jia Chong, Changsha, Hunan, 410079, PR China;3. Southern Illinois University Carbondale, 1000 Faner Drive, Carbondale, IL62901, United States;1. University of Western Australia, 35 Stirling Highway, Crawley, WA 6009, Australia;2. Stanford University, 520 Galvez Mall, CERAS Building, 5th Floor, Stanford, CA 94305-3084, USA;3. Central University of Finance and Economics, 39 Xueyuan South Road, Haidian District, Beijing 100081, China |
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| Abstract: | In this paper, we investigate how the degree of export participation and product differentiation affect firms' productivity growth through learning-by-exporting. We extend the model of Melitz and Ottaviano (2008) to endogenize the effort firms allocate to learning. This effort choice depends on both the degree to which firms enter export markets and the extent to which products are differentiated across producers. Using a firm-level dataset from China's manufacturing industries, we implement propensity score matching methods to test the model's predictions. Our results indicate that the degree of export participation is positively correlated with TFP improvements. Simultaneously, we empirically verify that firms exporting less differentiated products experience faster TFP growth than those exporting more differentiated products. |
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