| Abstract | With economic situation at home and abroad deteriorating, China's export is slowing down. On this background, how does China adjust its export strategy to maintain benefit from export become an import ideal. This paper tries to answer this question through investigating how export affect productivity from perspective of trade induced learning effect. Focusing on the matched information of highly disaggregated product-level trade data and firm-level production data from 2000 to 2006 in China, we construct a new measure of firm-specific demand shock of exporters, based on, the GDP growth rates of exporter’s destination countries as an instrument for firm exports. We find that a one percentage point expansion in exports raises firm total factor productivity (Olley-Pakes method) by approximately 0.224 percentage point on average. Moreover, we find that exporting to high-income countries, more processing exporting and scope expansion about variety contribute to the learning effect in productivity. Thus , China can adjust its strategy from aspects of destination distribution, export mode and export goods diversity. |