Productivity and Turnover in the Export Market Bee Yan Aw.pdfVIP

Productivity and Turnover in the Export Market: Micro Evidence from Taiwan and South Korea Bee Yan Aw The Pennsylvania State University Sukkyun Chung The Pennsylvania State University Mark J. Roberts The Pennsylvania State University NBER February 1999 Forthcoming in The World Bank Economic Review We appreciate the helpful comments of J. David Richardson and Jim Tybout and participants at the Conference on “Trade and Technology Diffusion” at the Fondazione Eni Enrico Mattei, Milan, Italy and the NBER Summer Productivity Institute. ABSTRACT While there is widespread empirical evidence indicating exporting producers have higher productivity than nonexporters, the mechanisms that generate this pattern are less clear. One view is that exporters acquire knowledge of new production methods, inputs, and product designs from their international contacts, and this learning results in higher productivity for exporters relative to their more insulated domestic counterparts. Alternatively, the higher productivity of exporters may simply reflect the self-selection of more efficient producers into a highly competitive export market. In this paper we use micro data collected in the manufacturing censuses in South Korea and Taiwan to study the linkages between a producer’s total factor productivity and choice to participate in the export market. We find differences between the countries in the importance of selection and learning forces. In Taiwan, transitions of plants in and out of t