Journal Article

Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)

Bee Yan Aw, Sukkyun Chung and Mark J. Roberts

in The World Bank Economic Review

Published on behalf of World Bank

Volume 14, issue 1, pages 65-90
Published in print January 2000 | ISSN: 0258-6770
Published online January 2000 | e-ISSN: 1564-698X | DOI: http://dx.doi.org/10.1093/wber/14.1.65
Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)

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Widespread empirical evidence indicates that exporting producers have higher productivity than nonexporters, although the reasons why are unclear. Some analysts argue that exporters acquire knowledge of new production methods, inputs, and product designs from their international contacts, and with this knowledge they achieve higher productivity than their more insulated domestic counterparts. Others argue that the higher productivity of exporters reflects the self-selection of more efficient producers into a highly competitive export market. This article analyzes the link between a producer's total factor productivity and its decision to participate in the export market, using manufacturing data from the Republic of Korea and Taiwan (China).

Differences are found between these two economies in the importance of selection and learning. In Taiwan (China) transitions of plants into and out of the export market reflect systematic variations in productivity as predicted by self-selection models. In Korea there are no significant changes in productivity following entry or exit from the export market that are consistent with learning from exporting. A comparison of the two economies suggests that in Korea factors other than production efficiency are more prominent determinants of the export decision.

Journal Article.  0 words. 

Subjects: Development Planning and Policy

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