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Export Activity and Productivity: New Evidence from the Egyptian Manufacturing Industry

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  • Youssouf KIENDREBEOGO

Abstract

This study explores the relationship between exports and productivity using a panel dataset of Egyptian manufacturing firms. Most previous studies using data from more developed countries suggest that exporters are more productive than non-exporters because the more productive firms self-select into export markets, while exporting does not necessarily improve productivity. We investigate if exporting firms are more productive than non-exporting firms and, if so, whether the productivity differential is due to a self-selection process or to the role of learning from exporting. We also ask if the extent of export activities matters for productivity. We find that both labor productivity and total factor productivity are significantly higher for exporters than for non-exporters. On average, labor productivity and total factor productivity are, respectively, 46% and 63% higher for exporting firms than for domestically-oriented firms. When we differentiate between pre-entry and post-entry differences in productivity, it appears that this export premium is driven by a learning-by-exporting process rather than just a self-selection of more productive firms into exporting. This weak evidence for the selection hypothesis is a reflection of the importance of the level of development of destination countries. In contrast to exporters to OECD countries, exporters to Non-OECD countries self-select into export markets, signaling the importance of the technical assistance from foreign buyers benefiting the former exporters. We also find an inverted U-shaped relationship between export intensity and productivity, suggesting the existence of a “threshold of exporting”. These results are robust to controlling for additional firm characteristics and potential outliers.

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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 201220.

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Length: 33
Date of creation: 2012
Date of revision:
Handle: RePEc:cdi:wpaper:1365

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Keywords: Exports; Learning from exporting; Self-selection; productivity;

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  1. Blalock, Garrick & Gertler, Paul J., 2004. "Learning from exporting revisited in a less developed setting," Journal of Development Economics, Elsevier, Elsevier, vol. 75(2), pages 397-416, December.
  2. John Baldwin & Wulong Gu, 2003. "Export-market participation and productivity performance in Canadian manufacturing," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 36(3), pages 634-657, August.
  3. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning By Exporting Important? Micro-Dynamic Evidence From Colombia, Mexico, And Morocco," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(3), pages 903-947, August.
  4. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, Elsevier, vol. 67(2), pages 373-391, December.
  5. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 92(365), pages 73-86, March.
  6. Andrew B. Bernard & J. Bradford Jensen, 1999. "Exporting and Productivity," NBER Working Papers 7135, National Bureau of Economic Research, Inc.
  7. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fachamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Mans Soderbom & Francis Teal & Albert Zeuf, 2004. "Do African manufacturing firms learn from exporting?," Development and Comp Systems, EconWPA 0409071, EconWPA.
  8. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  9. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  10. Lionel Nesta & Flora Bellone & Patrick Musso & Stefano Schiavo, 2008. "Financial Constraints and Firm Export Behavior," Sciences Po publications, Sciences Po 16, 2008, Sciences Po.
  11. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, Elsevier, vol. 57(2), pages 397-422, August.
  12. Ana M. Fernandes & Alberto E. Isgut, 2005. "Learning-by-Doing, Learning-by-Exporting, and Productivity: Evidence from Colombia," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c010_018, DEGIT, Dynamics, Economic Growth, and International Trade.
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Cited by:
  1. María D. Parra & Inmaculada Martínez-Zarzoso, 2014. "Imported intermediate inputs and Egyptian exports: Exploring the links," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2014/09, Economics Department, Universitat Jaume I, Castellón (Spain).

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