Does the long-term growth rate of a firm increase by exporting? If yes, how large is that increase in a developing economy? The paper aims to discuss this issue.
The authors incorporate data from the manufacturing plants in Iran as a developing economy for 2003–2011 to address this question. Using fixed effect panel and propensity score matching method, the authors examine whether exportation can affect a firm’s growth rate to test for the learning to grow hypothesis.
The findings document that: not only the exporters are larger and more productive than non-exporters, but they also grow faster in size and productivity measures as well. Additionally, the authors find that the rise in the growth rate is a short-term phenomenon and it disappears in the second year; meaning that exportation does not have a permanent growth effect. The findings are consistent with a spot effect of learning, compared to a permanent growth engine. Results are robust to different analysis tests.
The authors investigate the learning effect of exporting within recently released firm-level data of a developing country.
This paper is a substantially revised and updated version of Fatemeh Z. Sobhani’s MS thesis, supervised by Kowsar Yousefi at the Institute for Management and Planning. The authors acknowledge valuable comments by seminar participants at the IMPS, participants of the Fourth International Conference on Iran’s Economy (2016), and the editorial team of the Journal of Economic Studies. All mistakes are ours.
Yousefi, K., Madnanizdeh, S. and Sobhani, F. (2020), "Growth through export: evidence from Iran’s manufacturing plants", Journal of Economic Studies, Vol. 47 No. 1, pp. 111-131. https://doi.org/10.1108/JES-08-2018-0269Download as .RIS
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