While there is strong evidence that more productive plants select into exporting, the literature has struggled to identify export-related efficiency gains within plants. We show that this is due to the common use of revenue-based productivity measures (TFPR): more efficient producers tend to charge lower prices, leading to a downward bias in TFPR. Using census panels of Chilean, Colombian, and Mexican manufacturing plants, we find sizable efficiency gains after export entry based on efficiency measures that are not affected by output prices. Evidence suggests that a complementarity between exporting and investment in technology is an important driver of these gains.

New technologies tend to be adopted slowly and – even after being adopted – take time to be reflected in higher aggregate productivity. One prominent explanation for these patterns is the need to reorganize production, which often goes hand-in-hand with major technological breakthroughs. We study a unique setting that allows us to examine the empirical relevance of this explanation: the adoption of mechanized cotton spinning during the First Industrial Revolution in France. The new technology required reorganizing production by moving workers from their homes to the newly-formed factories. Using a novel hand-collected plant-level dataset from French archival sources, we show that productivity growth in mechanized cotton spinning was driven by the disappearance of plants in the lower tail – in contrast to other sectors that did not need to reorganize when new technologies were introduced. We provide evidence that this was driven by organizational challenges such as developing optimal plant layout. A process of ‘trial and error’ led to initially low and widely dispersed productivity, and – in the subsequent decades – to high productivity growth as knowledge diffused through the economy and new entrants adopted improved methods of organizing production.