Export Intensity, Absorptive Capacity And Productivity Of Chinese Firms

Since the reform and opening up, China has enjoyed a striking development ininternational trade. In2012, Chinese goods exports accounted for11.2%of worldmerchandise exports, ranking first in the world. Based on the existing facts andexperience, export-oriented economic strategy is a powerful engine to promote andachieve sustained economic growth. Our research shows that export activities willenhance the role of productivity, but with time limit, and is affected by the exportintensity and absorptive capacity.This paper carries out an in-depth study on the relationship between export intensityand productivity of Chinese exporters, and the moderate effect on the relationship byfirm-level absorptive capacity. Our empirical study shows: Chinese exporters are moreproductive than non-exporters. Productivity premium increases with absorptive capacity,but differs with export intensity. We further investigate the source of productivity bycarry out an examination on self-selection effect and learning effect. The overall findingssupport self-selection effect that more productive firms enter into export markets. Andthat this effect, however, does not stand in low productivity and high export intensityexporters. Besides, results of short term learning effect for established exporters arenegative and robust across ownerships. And a highly capital-intensive exporter canquickly reverse the negative learning effect. More interestingly, by introducing an interactitem of export intensity and absorptive capacity, we find that absorptive capacity has apositive moderate effect on the relationship of export intensity, namely when the firm hasstrong absorptive capacity, increase the export intensity can benefit firms from moreextensive technical knowledge spillover.Based on the conclusion, China should vigorously promote the upgrading of exportstructure in processing trade enterprises, and encourage capital-intensive enterprises toexport so as to improve the technical structure of our export products, and urge all firmsto enhance absorptive capacity.