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Firm Productivity and Exports: Evidence from Ethiopian Manufacturing

Arne Bigsten () and Mulu Gebreeyesus

Journal of Development Studies, 2009, vol. 45, issue 10, 1594-1614

Abstract: This paper examines the causal relationship between exporting and productivity using plant-level panel data for Ethiopian manufacturing. We trace the trajectory of total factor productivity and other productivity measures of groups of firms classified by their export history. We tested learning-by-exporting using a one-step system-general method of moments approach with the export-status included directly in the production function. We found strong evidence of not only self-selection but also learning-by-exporting. Depending on the specification previous exporting appears to have shifted the production function by 15-26 per cent. Exporters had on average three times more employees, and paid 1.6 times higher average wage than non-exporters.

Date: 2009
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