Evidence from French Manufacturing Firms

Exports are connected with a better performance of firms. The direction of this correlation has been under investigation for more than fifteen years. Evidence so far is clear. More productive firms will self-select into the export market because they can cover the fixed cost of entry. However, entry does not necessarily imply further productivity growth. It is not sure if firms will learn from exporting activity and it seems to depend on some factors not yet clearly specified. This paper investigates the direction of causality between exporting and productivity for French manufacturing firms. After confirming that French exporters outperform their domestic counterparts further findings indicate that more productive firms will join the export market and this entry will determine further growth in productivity at least for the first years of engagement. Eventually, this higher level of productivity growth will vanish. Thus, learning-by-exporting is evident for France but only for limited time