Publication

The prevalence of Internet-based sales by exporters compared to non-exporters is highlighted in a recent World Bank Report. The authors investigate the count of process and product innovations for a group of newly exporting Spanish firms vs. a non-exporter control group. They use propensity score kernel matching and difference-in-differences to help deal with endogenous exporting, sunk exporting costs and common macroeconomic shocks. Their results confirm that selection into exporting is largely driven by productivity and industry technological differences, consistent with exporting sunk costs.