Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants / Johannes Van Biesebroeck.

By:

Van Biesebroeck, Johannes

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w10020.Publication details: Cambridge, Mass. National Bureau of Economic Research 2003.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Proponents of trade liberalization argue that it will force firms to produce closer to the production possibility frontier and that the frontier will move out faster. In particular, plants that export will achieve a higher productivity level. However intuitive the argument, empirical evidence is meager. This hypothesis is examined by calculating the effect of export status on productivity for a panel of manufacturing plants in nine African countries. The results indicate that exporters in these countries are more productive, replicating a similar finding for developed countries. More importantly, exporters increase their productivity advantage after entry into the export market. While the first finding can be explained by selection---only the most productive firms engage in exporting---the latter cannot. The results are robust when unobserved productivity differences and self-selection into the export market are controlled for using different econometric methods. Scale economies are shown to be an important channel for the productivity advance. Credit constraints and contract enforcement problems prevent plants that only produce for the domestic market to fully exploit scale economies.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w10020 (Browse shelf(Opens below))	Not For Loan

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October 2003.

Proponents of trade liberalization argue that it will force firms to produce closer to the production possibility frontier and that the frontier will move out faster. In particular, plants that export will achieve a higher productivity level. However intuitive the argument, empirical evidence is meager. This hypothesis is examined by calculating the effect of export status on productivity for a panel of manufacturing plants in nine African countries. The results indicate that exporters in these countries are more productive, replicating a similar finding for developed countries. More importantly, exporters increase their productivity advantage after entry into the export market. While the first finding can be explained by selection---only the most productive firms engage in exporting---the latter cannot. The results are robust when unobserved productivity differences and self-selection into the export market are controlled for using different econometric methods. Scale economies are shown to be an important channel for the productivity advance. Credit constraints and contract enforcement problems prevent plants that only produce for the domestic market to fully exploit scale economies.