Learning-by-exporting: Continuous productivity improvements or capacity utilization effects? Evidence from Slovenian firms

Following along the lines of a growing literature on the causal link between exporting and productivity, this paper analyzes the existence of "learning-by-exporting" using firm-level data for Slovenian manufacturing enterprises between 1994 and 2002. We fail to find conclusive evidence of learning-by-exporting. By matching new exporting firms to "sufficiently" similar non-exporters and using the difference-in-differences method on the matched pairs it is revealed that productivity improvements, although present, are far from permanent and tend to dissipate shortly after initial entry. Confronting the data on factor accumulation with TFP measures indicates that the perceived learning effects may in fact only be a consequence of increased capacity utilization brought about by the opening of an additional market.