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Exporting and Firm Performance: Evidence from a Randomized Trial

David Atkin (), Amit Khandelwal and Adam Osman

No 10276, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: exports; learning-by-exporting; market access; productivity; quality (search for similar items in EconPapers)
JEL-codes: D24 F10 F14 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-ara, nep-bec, nep-eff and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

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