In Search of (Factor-Biased) Learning by Exporting

Exporting plants often undergo significant technology upgrades, becoming more productive than their domestic counterparts. This process, called learning by exporting, is usually modeled as a Hicks-neutral TFP shifter, overlooking factor-biased technical improvements. We develop a dynamic model of production, exporting, and capital investment that incorporates factor-augmenting efficiencies. We find that exporting increases TFP by 9%, skilled labor productivity by 2%, and unskilled labor productivity by 8%. For new exporters, skilled labor productivity rises by 45%, and unskilled labor productivity increases by 75% within four years of entering export markets.