Learning-by-exporting in Korean Manufacturing: A Plant-level Analysis

grateful for the valuable comments and suggestions from Professor Kimura and other workshop participants of ERIA. All remaining errors are author’s own. The paper analyzes whether firms that start exporting become more productive utilizing recently developed sample matching procedures s to control the problems from self-selection into the the export market. We use plant level panel data on Korean manufacturing sector from 1990 to 1998. We find clear and robust empirical evidence in favor of thethe learning-by-exporting effect; total factor productivity differentials between exporters and their domestic counterparts arises and widens during several years after export market entry. We also find that the effect is more pronounced for firms that have higher skill-intensity, higher share of exports in production, and are small in size. Overall, the evidence suggests that exporting is one important channel through which domestic firms acquire accesses to advanced knowledge and better technology. Also, the stronger learning-by-doing effect for firms with higher skill-intensity seems to support the view that “absorptive capacity ” matters to receive knowledge spillovers from exporting activity