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Exporting and Firm Performance: Evidence from a Randomized Trial

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  • David Atkin
  • Amit K. Khandelwal
  • Adam Osman

Abstract

We conduct a randomized experiment 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 16-26 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 controlling for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs and same capital equipment, treatment firms produce higher quality rugs 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

  • David Atkin & Amit K. Khandelwal & Adam Osman, 2014. "Exporting and Firm Performance: Evidence from a Randomized Trial," NBER Working Papers 20690, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20690
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    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.
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    JEL classification:

    • F10 - International Economics - - Trade - - - General

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