Do bigger and older firms learn more from exporting? - Evidence from China

- Bigger and older firms in China are found to have significant learning-by-exporting (LBE) effect.
- This holds for both yearly and cumulative LBE.
- However, the LBE effect is either insignificant or rather limited for young firms or small and medium-sized firms.

The literature has extensively discussed whether firms benefit from exporting (referred to as the learning-by-exporting (LBE) effect), but the empirical evidence is inconclusive. This paper draws on firm experience (age) to explain this question by using Chinese firm-level data for the period 1998-2007 to examine whether younger firms learn more from exporting than older firms. Employing propensity score matching and the difference-in-difference approach, we show significant LBE effects for older firms, especially those engaging in R&D activities, having large-scale production, and under private ownership. However, the yearly or cumulative LBE effects are either insignificant or rather limited for younger firms regardless of their R&D status and firm size.