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Firm Productivity, Technology and Export Status, What Can We Learn from Egyptian Industries?

Mohamed Chaffai and Patrick Plane

No 1134, Working Papers from Economic Research Forum

Abstract: We explore to what extent the export status and technological choices are related to firm Total Factor Productivity (TFP). Egyptian industrial firms are investigated for the period 2003-2008. The dataset is stratified on five manufacturing industries. Technology being an unobserved phenomenon, a Latent Class Model (LCM) is used to identify its heterogeneity within and across sectors. Translog, Cobb-Douglas, and a mixture of these specifications are used for the estimation of LCMs. Over the five industries, two technology classes prove to be statistically significant. One class provides higher firm productivity levels and is potentially shared by both exporters and non-exporters. Whatever the technology class, except for Food Processing, exporters are found, on average, to have a higher productive performance than non-exporters. Taking into account the potential self-selection effect over the whole sample, Propensity Score Matching (PSM) suggests that the difference is not significant for Food Processing, but varies in the other sectors from 9% in Metal to 32% in Chemistry. When the sample is restricted to labor-intensive technology, which is the largest in terms of number of observations, the premium of export status is about 10%.

New Economics Papers: this item is included in nep-afr and nep-eff
Date: 2017-06-09, Revised 2017-06-09
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