Working Paper - 214 - From Productivity to Exporting or Vice Versa Evidence from Tunisian Manufacturing Sector

In this paper we explore the link between firm's productivity and exporting using firm level data on 1323 Tunisian manufacturing firms from 2004-06. We in particular examine whether more productive firms self-select into export markets, and whether exporters achieve productivity improvements through learning-by-exporting effects. We then explore the link between innovation (as a channel linking productivity to exporting) and exporting. The analysis is conducted on two clusters of firms. The first cluster distinguishes exporters from non-exporters; and the second distinguishes fully exporting firms from others. The results suggest that fully exporting firms self-select more often into export markets and; therefore, have much less to gain from exporting because of their likely longer prior exporting experience. The analysis is then extended to deal with sectoral studies. The study finds, in the long run, fully exporting firms in sectors characterized by subcontracting regimes such as textile and electronics experience a distinct decline in the scope for learning by exporting. Moreover, the scope for learning might also be influenced by export destination as in the case of agro-food industries.