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

• Main Authors: Garcia-Marin, A. (Author), Voigtländer, N. (Author)
• Format: Article
• Language: English
• Published: University of Chicago Press 2019
• Subjects: Chile; Colombia; complementarity; efficiency measurement; export; investment; manufacturing; Mexico [North America]; price dynamics; productivity
• Online Access: View Fulltext in Publisher

 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. © 2019 by The University of Chicago. All rights reserved.