Uku Varblane and Sven-Kristjan Bormann
The purpose of this paper is to contribute to the literature on learning by exporting by investigating whether an increase in the complexity of exported products contributes to…
Abstract
Purpose
The purpose of this paper is to contribute to the literature on learning by exporting by investigating whether an increase in the complexity of exported products contributes to higher productivity at the firm level.
Design/methodology/approach
The study implements an empirical analysis for Estonian manufacturing firms involved in exporting for the period 2008–2014, adding product complexity as an explanatory variable in the production function estimation. An increase in product complexity is interpreted as an indirect proxy for an increase in firm capabilities, capturing both tangible and intangible elements of competitiveness and reflecting the learning effects.
Findings
A relatively weak correlation between product complexity and productivity was found using a simple OLS estimation – exporters with higher product complexity have generally higher productivity levels. Somewhat surprisingly, no evidence for the learning by exporting was found among exporters, meaning that the increased complexity does not seem to be a channel for productivity upgrading. This result seems to be robust, irrespective of estimation methods and sampling preferences.
Research limitations/implications
The sample is representative of exporting firms.
Practical implications
The results show that the pursuit to more complex product does not necessarily contribute to productivity for exporting firms. The findings suggest that the firm-level upgrading due to increased export orientation is likely to take place through the other channels like moving up in global value chains and differentiating by product quality.
Originality/value
This is one of the first papers to investigate the effect of product complexity on productivity at a firm level. The results provide new insights into the learning-by-exporting hypothesis, with focus on potential learning among the existing exporters.
Details
Keywords
Sven-Kristjan Bormann, Svetlana Ridala and Ott-Siim Toomet
The purpose of this paper is to analyse the relationship between skills in the Estonian, Russian and English language, and labour market outcomes in Estonia, a linguistically…
Abstract
Purpose
The purpose of this paper is to analyse the relationship between skills in the Estonian, Russian and English language, and labour market outcomes in Estonia, a linguistically divided country.
Design/methodology/approach
The authors use the Estonian Labour Force Surveys 1992–2012. The authors rely on multivariate linear regression models to document the relationship between language skills and labour market outcomes.
Findings
Estonian language knowledge (for ethnic Russians) are important determinants of unemployment. Wage, in contrary, is closely related to English skills. Ethnic Russian men do not earn any premium from speaking Estonian, while women, fluent in Estonian earn approximately 10 per cent more. For ethnic Estonians, Russian fluency is associated with a similar income gain.
Research limitations/implications
Due to the observational nature of the data, the effects reported in this study are not causal effects. As a second limitation, the self-reported language skills data may be imprecise and hence the effects the authors report may be too small.
Practical implications
The results stress the role of workplace segregation, both along gender and ethnic lines, in determining the individual labour market experience.
Originality/value
The authors provide a comprehensive overview of the effects of language skills in a rapidly developing labour market in a linguistically divided economy. The authors analyse several languages with different legal status and document long-term trends in the effects.