Productivity and Learning-by-exporting: A Firm-level Analysis of Indian Manufacturing

In this paper, we examine whether firms become productive by learning through exporting. To this end, we estimate the production function using microdata of Indian manufacturing firms operating in the period 1991-2001. In contrast to studies on developed countries, our results provide evidence that Indian manufacturing firms are experiencing a rise in productivity through entering export markets and thus experience the learning effect. We also find that there is a productivity rise prior to exporting. Therefore, our results also support the self-selection mechanism for exporting. © 2014 John Wiley & Sons Ltd.