902① c°-寸@-。N 18 114 1/2 3/2 Total Factor Productivity Relative to USA TFP= GDP/(LA.33*K.67) Data source: World Bank Development Indicators
ALB DZA ARG ARM AUS AUT AZE BHS BGD BLR BEL BLZ BEN BTN BOL BWA BRA BGR BFA BDI KHM CMR CAN CAF CHL CHN COL COM ZAR COG CRI HRV CYP CZE DNK DOM ECU EGY SLV GNQ EST FIN FRA GAB GMB GEO DEU GRC GTM HTI HND HKG HUN ISL IND IDN IRN IRL ISR ITA JPN JOR KAZ KEN KOR KGZ LAO LVA LBN LBR LTU LUX MAC MKD MDGMWI MYS MLI MRT MUS MEX MDA MNG MNE MAR MOZ NAM NPL NLD NZL NIC NGA NOR OMN PAK PRY PER PHL POL PRT QAT ROM RUS RWA SEN SRB SGP SVK SVN ZAF ESP SDN SWE CHE TZA THA TGO TTO TUR UGA UKR ARE GBR USA URY UZB VUT VNM WBG ZWE 1/128 1/64 1/32 1/16 1/8 1/4 1/2 1 3/2 GDPPC Relative to USA 1/8 1/4 1/2 1 3/2 Total Factor Productivity Relative to USA TFP = GDP/(L^.33 * K^.67) Data source: World Bank Development Indicators
X MAC X- NZL X ITA x BHS. x X CYP PRT, X GRC, X ITO X GNQ X EST X OMN TUR. %BABX MSM ARG 902① RUS X D X NAM X COL CHN BLZ x抓R X GTM X BTN,X CQGX VUT, X PRY X UKR XHHND c°-寸@-。N X NICx BI。 X IN. MDA X VNM X NGA X CM X COM X MOZ X BFA X LBR X CAF X 18 114 1/2 3/2 Total Factor Productivity Relative to USA TFP= GDP/(LA.33*K.67) Data source: World Bank Development Indicators
ALB DZA ARG ARM AUS AUT AZE BHS BGD BLR BEL BLZ BEN BTN BOL BWA BRA BGR BFA BDI KHM CMR CAN CAF CHL CHN COL COM ZAR COG CRI HRV CYP CZE DNK DOM ECU EGY SLV GNQ EST FIN FRA GAB GMB GEO DEU GRC GTM HTI HND HKG HUN ISL IND IDN IRN IRL ISR ITA JPN JOR KAZ KEN KOR KGZ LAO LVA LBN LBR LTU LUX MAC MKD MDGMWI MYS MLI MRT MUS MEX MDA MNG MNE MAR MOZ NAM NPL NLD NZL NIC NGA NOR OMN PAK PRY PER PHL POL PRT QAT ROM RUS RWA SEN SRB SGP SVK SVN ZAF ESP SDN SWE CHE TZA THA TGO TTO TUR UGA UKR ARE GBR USA URY UZB VUT VNM WBG ZWE 1/128 1/64 1/32 1/16 1/8 1/4 1/2 1 3/2 GDPPC Relative to USA 1/8 1/4 1/2 1 3/2 Total Factor Productivity Relative to USA TFP = GDP/(L^.33 * K^.67) Data source: World Bank Development Indicators
Impact of Trade on Productivity Widespread evidence that trade reforms improve firm productivity China, India, Hungary Vietnam, Indonesia, Chile, Argentina, Mozambique Bangladesh, Egypt, Slovenia, Ethiopia, Tanzania, Burundi, Zambia, Kenya, Ghana, Cote d'lvoire, Cameroon, Zimbabwe] Across-firm mechanisms Selection effects Pavcnik 03, McCaig Pavcnik 15 Removing misallocation Khandelwal et al 12, Sequeria 16 Within-firm mechanisms Reduces firm slack Scale/Market Access Lileeva Trefler 10, Bustos 11, Garcia-Marin Voightlander fth Access to intermediate inputs Amiti Konings 07, Goldberg et al 10, Kee 14, Halpern et al 15. de loecker et al 16 Learning-by-exporting Aw et al 00, Van Biesebrock 06, de Loecker 07, Atkin et al 17, (exception is Cleredes et al 98
Impact of Trade on Productivity • Widespread evidence that trade reforms improve firm productivity – China, India, Hungary, Vietnam, Indonesia, Chile, Argentina, Mozambique, Bangladesh, Egypt, Slovenia, {Ethiopia, Tanzania, Burundi, Zambia, Kenya, Ghana, Cote d’Ivoire, Cameroon, Zimbabwe} • Across-firm mechanisms – Selection effects Pavcnik 03, McCaig Pavcnik 15 – Removing misallocation Khandelwal et al 12, Sequeria 16 • Within-firm mechanisms – Reduces firm slack – Scale/Market Access Lileeva & Trefler 10, Bustos 11, Garcia-Marin & Voightlander fth – Access to intermediate inputs Amiti Konings 07, Goldberg et al 10, Kee 14, Halpern et al 15, de Loecker et al 16 – Learning-by-exporting Aw et al 00, Van Biesebrock 06, de Loecker 07, Atkin et al 17, (exception is Cleredes et al 98)
Motivation Access to export markets may help developing-country firms close this gap One motivation for aid-for-trade initiatives($48bn annual commitment and proliferation of export-promotion agencies ( tripling over last 20 years) Lederman et al 09 Central to this goal is the concept of learning-by-exporting(LBE) Exporting improves firm productivity (i. e shifts out the ppf)(Clerides et al 98, Aw et al 00) In presence of LBE, trade leads to efficiency gains which magnify gft (alvarez, Buera Lucas 14) Despite the pervasiveness of these initiatives there are open questions Does exporting have a causal impact on firm performance? If so, do improvements occur through learning-by-exporting rather than movements along the PPp? 14
Motivation • Access to export markets may help developing-country firms close this gap – One motivation for aid-for-trade initiatives ($48bn annual commitment) and proliferation of export-promotion agencies (tripling over last 20 years) Lederman et al 09 • Central to this goal is the concept of learning-by-exporting (LBE) – Exporting improves firm productivity (i.e. shifts out the PPF) (Clerides et al 98, Aw et al 00) • In presence of LBE, trade leads to efficiency gains which magnify GFT (Alvarez, Buera & Lucas 14) • Despite the pervasiveness of these initiatives, there are open questions: – Does exporting have a causal impact on firm performance? – If so, do improvements occur through learning-by-exporting rather than movements along the PPF? 14
Motivation Difficulty stems from the fact that it is notoriously difficult to identify the causal effects of exporting What appears as learning-by-exporting may just be self-selection into export markets 2) We typically lack detailed data needed to pin down within-firm changes that occur due to exporting Changes in revenue-based TFP measures may reflect many things (changing markups, product mix, quality) Quantity-based TFP measures solve markup issue but typical datasets dont record changes in product mix or quality for differentiated goods Measured improvements may simply reflect movements along the PPF, rather than outward shifts of the ppe 15
Motivation • Difficulty stems from the fact that it is notoriously difficult to identify the causal effects of exporting 1) What appears as learning-by-exporting may just be self-selection into export markets 2) We typically lack detailed data needed to pin down within-firm changes that occur due to exporting • Changes in revenue-based TFP measures may reflect many things (changing markups, product mix, quality) • Quantity-based TFP measures solve markup issue but typical datasets don’t record changes in product mix or quality for differentiated goods ➢ Measured improvements may simply reflect movements along the PPF, rather than outward shifts of the PPF 15