Total factor productivity and export performance of Tunisian manufacturing firms

Using data on Tunisian manufacturing firms, this paper analyzes the causal relationship between firm's total factor productivity and export market participation during 2000–2012. We find out a causal link from high productivity to presence in foreign markets, as predicted by a recent literature on international trade with heterogeneous firms. We apply the propensity score matching in order to examine whether the presence in international markets enables firms to achieve further productivity improvements through learning-by-exporting effects. We found a causal relationship in both direction.in this sense, more productive firms become exporters and exporting promote the productivity of Tunisian firms.