Abstract: The domestic literatures based on the heterogeneity firm theory mostly concentrated on testing whether there is "learning by exporting" in china, but less involved the mechanism about "learning by exporting". This paper argues that the main reason for "learning by exporting" is exporting firms have higher R&D probability and performance, these firms will be more likely to choose R&D investment, which enhance productivity more significantly in the exporting process. This paper uses Chinese industrial firm-level database during 2004-2007, up to one million sample points, as sample to empirically test and conclude that Chinese manufacturing firm's R&D probability will increase 21.63% after exporting, this R&D choice will bring about 7.3% annual productivity increase for such firms. Exporting of Chinese firms can improve employment because of comparative advantage, it is also an important way to increase productivity in the long time and get dynamic advantage through more R&D investment.

Key words: R&D Effect, learning by exporting, productivity upgrading