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Firm Productivity and Exports: Evidence from Ethiopian manufacturing

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  • Bigsten, Arne

    ()
    (Department of Economics, School of Business, Economics and Law, University of Gothenburg)

  • Gebreeyesus, Mulu

    ()
    (Department of Economics, School of Business, Economics and Law, University of Gothenburg)

Abstract

This paper examines the causal relationship between exporting and productivity using a ten years long plant-level panel data set from an annual census of Ethiopian manufacturing, rarely available in the sub-Saharan Africa. We exploited its length to trace the trajectory of TFP and other productivity measures of groups of firms classified by their export history. We then tested learning-by-exporting using a one-step system-GMM approach with the export-status included directly in the production function. We addressed potential endogeneity problems by using instrumental variables, and also applied a matching analysis to address potential selection bias. We found strong evidence of not only self-selection but also learning-by-exporting. Depending on the specification previous exporting appears to have shifted the production function by 15-32 %. Exporters had on average three times more employees, and paid 1.6 times higher average wage than those of non-exporters.

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File URL: http://hdl.handle.net/2077/10037
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 303.

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Length: 31 pages
Date of creation: 30 Apr 2008
Date of revision:
Handle: RePEc:hhs:gunwpe:0303

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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: Productivity; exports; Ethiopia; manufacturing;

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References

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  1. Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," World Bank Research Observer, World Bank Group, vol. 21(2), pages 241-265.
  2. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
  3. M. Soderbaum & F. Teal, 2000. "Skills, Investment and Exports from Manufacturing Firms in Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 13-43.
  4. Andrew B. Bernard & J. Bradford Jensen, 2000. "Exporting and Productivity," Working Papers 00-07, Center for Economic Studies, U.S. Census Bureau.
  5. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  6. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & M�ns Soderbom & Francis Teal & Albert Z, 2004. "Do African Manufacturing Firms Learn from Exporting?," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 115-141.
  7. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
  8. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Wiley Blackwell, vol. 30(1), pages 60-82, 01.
  9. Chin Hee Hahn, 2004. "Exporting and Performance of Plants: Evidence from Korean Manufacturing," NBER Working Papers 10208, National Bureau of Economic Research, Inc.
  10. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
  11. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
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Cited by:
  1. Neil Foster-McGregor & Anders Isaksson & Florian Kaulich, 2013. "Importing, Exporting and Performance in Sub-Saharan African Manufacturing Firms," wiiw Working Papers 96, The Vienna Institute for International Economic Studies, wiiw.
  2. Newman, Carol & Rand, John & Tarp, Finn & Thi Tue Anh, Nguyen, 2014. "Exporting and productivity: The role of ownership and innovation in the case of Vietnam," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Vu, Van Huong, 2012. "Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs," MPRA Paper 40708, University Library of Munich, Germany.
  4. Ung, Luyna & Chhair, Sokty, 2014. "Exporting and foreign direct investment spillovers: Cambodia.s experience," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Jones, Chris & Morrissey, Oliver & Nelson, Doug, 2011. "Did the World Bank Drive Tariff Reforms in Eastern Africa?," World Development, Elsevier, vol. 39(3), pages 324-335, March.
  6. Cruz, Antonio & Newman, Carol & Rand, John & Tarp, Finn, 2014. "Learning by exporting: The case of Mozambican manufacturing," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Chandan Sharma & Ritesh Kumar Mishra, 2011. "Does export and productivity growth linkage exist? Evidence from the Indian manufacturing industry," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(6), pages 633-652, November.
  8. Tadesse WODAJO, Tadesse & Dawit SENBET, Dawit, 2013. "Distributions Of Public And Private Manufacturing Firms And Determinants Of Productivity In Ethiopia," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(1).
  9. Boermans, Martijn Adriaan, 2010. "Learning-by-Exporting and Destination Effects: Evidence from African SMEs," MPRA Paper 22658, University Library of Munich, Germany, revised 09 May 2010.

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