Export Market Diversification and Firm Productivity: Evidence from a Large Developing Country

•Chinese firms’ behavior in the export markets is highly heterogeneous.•There is a U-shaped relationship between the diversification of export markets and productivity.•Convex relationship is explained by a learning curve, economies of scope, and economies of scale.•The convex, U-shaped relationship is less pronounced for firms engaged in processing trade.•The results are robust to the potential endogeneity and different specifications.