Exporting and Productivity in the USA

Abstract

Exporting is often touted as a way to increase economic growth. This paper examines the interaction between exporting and productivity growth in US manufacturing. While exporting plants have substantially higher productivity levels, there is no evidence that exporting increases plant productivity growth rates. The higher productivity of exporters largely predates their entry into exporting. However, within the same industry, exporters do grow faster than non-exporters in terms of both shipments and employment. Exporting is associated with the reallocation of resources from less efficient to more efficient plants. In the aggregate, these reallocation effects are quite large, making up over 40 per cent of total factor productivity growth in the manufacturing sector. Half of this reallocation to more productive plants occurs within industries and the direction of the reallocation is towards exporting plants. Copyright 2004, Oxford University Press.