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Firm Productivity and Exports: Evidence from Ethiopian Manufacturing

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  • Arne Bigsten
  • Mulu Gebreeyesus

Abstract

This paper examines the causal relationship between exporting and productivity using plant-level panel data for Ethiopian manufacturing. We trace the trajectory of total factor productivity and other productivity measures of groups of firms classified by their export history. We tested learning-by-exporting using a one-step system-general method of moments approach with the export-status included directly in the production function. 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 15-26 per cent. Exporters had on average three times more employees, and paid 1.6 times higher average wage than non-exporters.

Suggested Citation

  • Arne Bigsten & Mulu Gebreeyesus, 2009. "Firm Productivity and Exports: Evidence from Ethiopian Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1594-1614.
    • Handle: RePEc:taf:jdevst:v:45:y:2009:i:10:p:1594-1614
    DOI: 10.1080/00220380902953058
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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