Factor-Biased Efficiency Gains from Exporting: Evidence from Colombia

Abstract

New exporters often adopt new technology, which may reorganize production rather than lift output uniformly, so efficiency gains can land unevenly across inputs. We examine such gains across worker types in Colombian manufacturing, 1981-1991. We develop a model of exporters that measures how efficiently firms use each input and grounds a comparison of new exporters with non-exporters matched on export likelihood. We find that export entry raises the plant-level efficiency of unskilled labor by about 9.4% per year, with no detectable change for skilled labor, implying a 2% annual rise in total factor productivity. We estimate that the two worker types are complements. Exporters thus produce more with relatively less unskilled labor, raising skill intensity.