Exports and Firm-Level Efficiency in African Manufacturing

Arne Bigsten (), Paul Collier, Stefan Dercon (), Marcel Fafchamps (), B. Gauthier, Jan Willem Gunning (), J. Habarurema, Remco Oostendorp, C. Pattillo, Mans M. Soderbom (), Francis John Teal and A. Zeufack

Working Papers Series from Centre for the Study of African Economies, University of Oxford

Abstract: In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Measures of firm-level efficiency using stochastic production frontier models are constructed for the period 1992 to 1995. We find that there are large efficiency gains from exporting both in terms of levels and growth, and contrary to China, the gains are largest for the new entrants to exporting. We control for unobserved heterogeneity using a dynamic model with correlated random effects. Results are robust and consistently, we find evidence of a learning-by-exporting effect as well as self-selection of the most efficient firms into exporting. The effect of exporting on efficiency appears to be larger in this African sample than in comparable studies of other regions which is consistent with the smaller size of domestic markets.

Keywords: MANUFACTURING INDUSTRIES; TRADE (search for similar items in EconPapers)
JEL-codes: O10 O12 O55 F14 (search for similar items in EconPapers)
Date: 2000
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