Self-Selection and Learning by Exporting from Indian Manufacturing Firms

Following a growing literature, the authors test in this work the two hypotheses of self-selection and learning by exporting across different Indian manufacturing firms. Using matched sampling techniques, they estimate whether export-oriented firms are more efficient than non-exporters on the basis of the Indian Surveys of manufacturing firms for the period 2005-2013. The findings indicate that export entrants increase their productivity after entry but this increase is only temporary. In fact, the authors document a time-varying relationship between export participation and economic performance. This occurs for both total-factor productivity (TFP) and productivity growth. These results are consistent with those found in the previous literature for many countries. The only lasting significant effect that we find among the different measures of performances between exporters and non-exporters is that the former generates higher profits than their domestic counterparts.