Does it matter where you export and does real productivity really rise with exporting?

Abstract

Utilizing a comprehensive dataset for Turkish manufacturing firms over 2003-2011, we analyse the differentials in the post-entry effects of exporting to markets with different income levels. We employ propensity score matching techniques together with a differences in differences methodology. Controlling for the quality of exports, we explore whether the post-entry effects on productivity are driven by changes in real productivity, as opposed to quality/price markup effects. Our results confirm the learning by exporting hypothesis and suggest real productivity gains in particular for exports to high income (HI) countries as opposed to middle low income (MLI) countries even after controlling for the composition of exports. This suggests that where a firm exports does matter