Exports and Productivity : The Role of Imported Inputs and Investment in R&D
The empirical evidence on within firm productivity improvements from exports has largely been understated because the measures of revenue productivity used do not account for pricing heterogeneity across firms. Using a panel of Indian firms, the an...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/182351592321765811/Exports-and-Productivity-The-Role-of-Imported-Inputs-and-Investment-in-R-D http://hdl.handle.net/10986/33942 |
| Summary: | The empirical evidence on within firm
productivity improvements from exports has largely been
understated because the measures of revenue productivity
used do not account for pricing heterogeneity across firms.
Using a panel of Indian firms, the analysis in this paper
controls for firm variation in prices and uses proxy methods
to retrieve measures of productivity that reflect physical
productivity. Within-firm productivity changes from export
entry are computed using a difference-in-differences
matching estimator. The findings show that, over a six-year
period, the difference in productivity growth between export
entrants and their non-exporter counterparts is about 11
percentage points. Thus, productivity improvements from
selling in international markets have largely been
understated in the export-productivity empirical literature.
This difference in productivity growth is decomposed into
two channels. About 15 percent of the difference in
productivity growth is explained by higher imports of
intermediate inputs, and about 85 percent is explained by
investment in research and development. The evidence
suggests that investment in research and development is an
important source of within-firm productivity gains even in
developing countries. |
|---|