Productivity, Geography, and the Export Decision of Chilean Farms

Abstract: This article analyzes the export participation of Chilean farms and the relative importance of farm-specific and geographic characteristics in this decision. An export behavior model is estimated using data on 8,284 Chilean farms and a two-stage conditional maximum likelihood procedure. Farm efficiency has a relatively stronger effect than the combined effect of geographic characteristics in increasing the probability of export participation. Farms with skilled (managerial) labor and in regions with higher human capital also have a relatively higher probability of producing for the export market. However, for geographic characteristics to positively affect export participation, farms must achieve a minimum level of efficiency