Export activity and productivity: Evidence from the Taiwan electronics industry

Abstract

We use plant-level data for the Taiwanese electrical machinery and electronics industry to examine productivity differentials between exporters and non-exporters. Consistent with other recent literature, we find that exporters are larger, pay higher wages, undertake more investment expenditures in machinery, equipment, and new technology, and are substantially more productive than non-exporters. In conclusion, our results suggest that higher productivity among exporters relative to non-exporters does not result from the acquisition of knowledge or expertise by exposure to the export market, but rather that higher productivity is required to survive in the export market. These findings are important or the formulation of export policy. They suggest that government programs designed to assist current exporters may reward previous accomplishment rather than stimulate future success.