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Learning by exporting: the role of competition

PLEASE NOTE: THE VENUE FOR THIS EVENT HAS CHANGED.
Crawford School of Public Policy | Arndt-Corden Department of Economics
Photo by Artem Beliaikin on Unsplash

Event details

ACDE Seminar

Date & time

Tuesday 26 May 2020
2.00pm–3.30pm

Venue

Online Seminar

Speaker

Arianto Patunru, ACDE, ANU

This is a fully online event. Please email the event organiser if you would like to join

This paper shows that increased competition in export markets could reinforce firms’ learning-by-exporting processes. We investigate competition as a learning channel by employing 25 years’ worth of Indonesian garment firms’ data. Firms in this labour-intensive industry experienced a long period of a quota regulation under the Multi-Fibre Arrangement (MFA), which governed much of the global trade in garments before its abolition in 2005. This allows us to conduct a quasi-natural experiment type of study on how the MFA affected apparel exporters’ performance. Using propensity score matching and difference-in-difference methods, we find that the impact of exporting on total factor productivity during the MFA implementation period is mixed; but after it was abolished, productivity increased by more than 12 percent. This implies that exporters gain a significant learning-by-exporting benefit from competition (that is, without a special facility such as the MFA), and that interventions that protect exporters from such competition might lessen the benefit.

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