Growth, learning, entry and exit among African exporters

Journal of Development Studies, 2004

In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Estimating simultaneously a production function and an export regression that control for unobserved firm effects, we find both significant efficiency gains from exporting, supporting the learning-byexporting hypothesis, and evidence for self-selection of more efficient firms into exporting. The evidence of learning-by-exporting suggests that Africa has much to gain from orientating its manufacturing sector towards exporting.

Oxford open economics, 2024

Trade shocks generated by trade policy reform are important for firm productivity. In particular, export opportunities and access to imported intermediate inputs and capital goods can encourage firms to simultaneously export and invest. Using a panel dataset for manufacturing firms in Ghana, Kenya, Nigeria and Tanzania, I find strong and robust evidence for learning-by-exporting effect. I also find that firms that simultaneously export and invest have the highest returns to these activities compared with firms that export without investing, or firms that invest without exporting, or firms that do neither activity. The superior productivity performance of firms that engage in both activities is consistent with the idea that exporting and investing have complementary effects on a firm's productivity: investing facilitates a firm's ability to absorb export-related technology. Finally, I find that firm heterogeneity has important inf luence on the productivity gains associated with exporting and investing.

2013

The increasing number of literatures investigating on the impact of trade openness on firm efficiency has not yet provided a definite prediction on the direction of causality (Rodrik, 1988, 1992, and Tybout 1992). We investigate the relation between exporting and productivity on the Senegalese manufacturing sectors. Using a unique firm-level panel data for the period 1998-2011, we estimate productivity and exporting dynamics, controlling for other unobserved effects, using simultaneous functions based on Bigsten and al. (2002). Our results indicate the evidences of both selfselection of the most efficient firms enter into the export market and effect of Learning in the export market. Our findings suggest that workers' qualification and access to Patents and Licences have a positive effect on the process of learning. Also, small firms particularly learn more from exporting. From a policy perspective, this evidence of learning-by-exporting suggests that Senegal has much to gain from promoting its manufacturing sector towards exporting by supporting domestic firms to overcome the barriers to enter into foreign market, particularly by investing on skilled workers and promote access to Patents and Licences as well as disseminating benefits arising from exporting to non-exporters.

Journal of African Business, 2019

In this paper, we analyze the significance of export market destinations for productivity growth in Sub-Saharan Africa. We use matching and difference-indifferences techniques to evaluate these questions. We find that exports generate productivity growth among exporters, with the more productive firms exporting to multiple markets. We also find that changes in export markets are as a result of firm-level productivity growth suggesting that firms will sell products to additional markets if their productivity level increases hence the changes in export markets are correlated with productivity growth. Moreover, we find that exporting to multiple markets raises the firm's productivity growth by 42.3%, higher than exporting to only one export market at a time. These findings hold at the country and industry level and are robust to other factors that may correlate with increased productivity like age, size and ownership. At the policy level, policies on export promotion should provide information on how prospective exporters can enter into African export markets. Firms that have started exporting should be helped with credit access to expand their sales to other additional export markets.

2005

The poor performance of many African economies has been associated with low growth of exports in general and of manufacturing exports in particular. In this paper we draw on micro evidence of manufacturing firms in five African countries -Kenya, Ghana, Tanzania, South Africa and Nigeria -to investigate the causes of poor exporting performance. We exploit a data set which has a much longer panel dimension than has been used before to assess the relative importance of self-selection based on efficiency and firm size as determinants of export participation. We show that firm size is a robust determinant of the decision to export. It is not a proxy for efficiency, for capital intensity, for sector or for time-invariant unobservables. In contrast the evidence for self-selection into exporting is very weak. Finally our use of a longer run panel than has been available before has allowed us to separate out the roles of ownership and skills as possible determinants of participation in exporting. We find that both foreign ownership and skills are significant determinants of exporting.

African Journal of Economic and Management Studies, 2011

PurposeThis paper aims to investigate firm‐level interactions between productivity and exporting in Uganda's manufacturing sector.Design/methodology/approachThe paper empirically tested two hypotheses that relate to the dynamic gains from trade and also have tended to dominate the literature; self‐selection and learning‐by‐exporting hypotheses. It employs proxies of self‐selection and learning‐by‐exporting obtained from indices of path dependence to fit maximum likelihood estimates of export behavior.FindingsThe results provide support for both hypotheses and it is also found that more experienced exporters reap more productivity gains from learning effects which is in line with the view that knowledge spillovers to exporting firms increase with the level of interaction in the global market place. Thus, learning‐by‐exporting is not a “short term” occurrence which takes place only in the first few years of entry in export markets after which it would fizzle out as a firm's ex...

Low growth of manufacturing exports has been identified as a major factor for poor economic performance in many Sub-Saharan African economies. Exports improvement in the manufacturing sector especially through the learning process is a necessary condition for growth and real development of less developed and developing economies in Sub-Saharan Africa (SSA). The study sought to establish empirical support in the SSA context for the "learning by exporting hypothesis" by employing Cobb-Douglas type of production functions and firm-level survey data from a sample of ten African countries (Nigeria, Ghana, Kenya, Tanzania, Ethiopia, South Africa, Cameroon, Botswana, Mauritius, and Zimbabwe). Furthermore, employing Ordinary Least Squares (OLS), Clerides, Lach and Tybout (CLT) and Non-parametric Maximum Likelihood (NPML) estimation techniques, the study found support for the learning by exporting hypothesis in Sub-Saharan Africa. The study recommended further investment in human r...

2000

In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Measures of firm-level efficiency using stochastic production frontier models are constructed for the period 1992 to 1995. We find that there are large efficiency gains from exporting both in terms of levels and growth, and contrary to China, the gains are largest for the new entrants to exporting. We control for unobserved heterogeneity using a dynamic model with correlated random effects. Results are robust and consistently, we find evidence of a learning-by-exporting effect as well as self-selection of the most efficient firms into exporting. The effect of exporting on efficiency appears to be larger in this African sample than in comparable studies of other regions which is consistent with the smaller size of domestic markets.

2012

What is the impact of export costs on the speed and extent to which African firms exports? We answer this question using a sample of 49,584 (mostly formal) firms across 71 countries, including 5,839 firms in 16 African countries surveyed by the World Bank during 2002 and 2003. We find that firms in African countries face higher export costs on average than firms in other parts of the world. However we find that African firms are more likely to enter export markets, but that when they do the extent of their exports (exports as a share of their total sales) is on average less than that of firms elsewhere. Also, younger firms are more likely to start exporting than older firms. As for the impact on export costs, we establish that the costs of exporting (as measured in US dollars) lower the likelihood and the extent of African firms' exports but not when African firms start exporting.

The poor performance of many African economies has been associated with low growth of exports in general and of manufacturing exports in particular. In only two sub-Saharan African countries has there been a substantial growth in manufacturing exports, Mauritius and South Africa. Mauritius is one of the most successful economies in Africa. In this paper we examine the evidence for which aspects of policy are necessary for enabling African economies to improve their performance. We consider exporting from three African countries classified as among the least developed -Tanzania, Uganda and Zambia. It is argued that while macro economic policy is important in creating the pre-conditions for growth it may not be sufficient.