Growth through export: evidence from Iran’s manufacturing plants

Abstract

PurposeDoes 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.Design/methodology/approachThe 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.FindingsThe 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.Originality/valueThe authors investigate the learning effect of exporting within recently released firm-level data of a developing country.

Nexus between export, productivity, and competitiveness in the Indian manufacturing sector

“…The results show that manufacturing firms that enter the export market are able to improve their productivity and competitiveness. These findings are consistent with those of Siba and Gebreeyesus (2016) and Yousefi et al (2019), in which they confirmed the "learning by exporting" hypothesis with regard to the impact of firms' exports on productivity in the case of Iranian and Ethiopian manufacturing firms respectively. Although our findings support the "learning by exporting" hypothesis, we still checked the reverse hypothesis, i.e., "self-selection," in order to check the link in our analysis from competitiveness to export.…”

“…First, the "learning by exporting" theory claims that exporting to the international market boosts learning effects for firms, which results in increased productivity and competitiveness (Bernard & Wagner, 1997;Fernandes & Isgut, 2005;Kraay, 1999;Yousefi, Madanizadeh, & Sobhani, 2019). Some relevant studies that examine this hypothesis are Jensen (1999, 2004), who studied firms in the United States; Girma et al (2004), who researched firms in the United Kingdom; Wagner (2002), who studied German companies; Clerides et al (1998), who studied companies in Colombia, Morocco, and Mexico;and Aw, Chung, and Roberts (2000), who researched companies in Taiwan, and Wang, Xu, and Dai (2021), who examined the case of Chinese firms.…”

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

“…Over the last decades, international trade has been acknowledged as an important contribution to economic growth (Narayan et al, 2007;Rahman et al, 2017;Yousefi et al, 2020). In recognition of such essential contribution, economists have tried to examine various determinants of bilateral trade, including the institutions.…”