Self selection vs learning: Evidence from Indian exporting firms

This paper studies the export behavior of a panel of Indian manufacturing firms for a period of 17 years from 1990 to 2006. Specifically, we look at whether exporting firms differ from domestic firms in size, productivity, capital intensity, remuneration levels, etc. We find that exporters systematically outperform non-exporters over a number of characteristics. We find evidence of “self-selection” for Indian manufacturing firms, i.e., firms that are more productive enter the export market as they are more capable of meeting the challenges of an international market. We also find evidence of learning and growth for a number of variables.