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Exporting and Firm Performance: Evidence from a Randomized Trial

Author

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  • Atkin, David
  • Khandelwal, Amit
  • Osman, Adam

Abstract

We conduct a randomized control trial that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on firm performance. Treatment firms report 15-25 percent higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency. First, treatment firms have higher productivity and quality after accounting for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs, treatment firms receive higher quality assessments despite no difference in production time. Third, treatment firms exhibit learning curves over time. Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.

Suggested Citation

  • Atkin, David & Khandelwal, Amit & Osman, Adam, 2014. "Exporting and Firm Performance: Evidence from a Randomized Trial," CEPR Discussion Papers 10276, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10276
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    References listed on IDEAS

    as
    1. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    2. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    exports; learning-by-exporting; market access; productivity; quality;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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