Importing, exporting and performance in sub-Saharan African manufacturing firms

Abstract

This paper examines productivity differences between internationally trading and nontrading firms using data on a sample of firms from 19 sub-Saharan African countries. The paper provides the first evidence of whether exporters, importers and two-way traders perform better than non-traders, and whether there are differences in performance between different types of trading firms in sub-Saharan Africa. Our results indicate that exporters, importers and two-way traders perform better than non-exporters, non-importers and non two-way traders. We further find that two-way traders perform better than importers only or exporters only, results largely consistent with recent results for other countries and regions. Considering information on export starters, continuers and exiters we also present some evidence consistent with both self-selection and learning-by-exporting.

Foreign market experience, learning by hiring and firm export performance

“…Wagner 2012;Foster-McGregor et al 2014). In addition, we find that a higher capital intensity or wage rate is associated with a higher probability of entry to export markets in the subsequent year.…”

Importing and Firm Productivity in Ethiopian Manufacturing

“…Relatedly, Bigsten and Gebreeyesus (2009) find selection of more productive firms into exporting as well as post-entry productivity improvement. Foster-McGregor et al (2014) document that firms simultaneously exporting and importing are the most productive.…”

Firm Performance and Participation in Public Procurement: Evidence from Sub-Saharan Africa

“…In addition to extending our main results, a quantile regression approach also improves on OLS due to its capacity to accommodate outliers and greater robustness to heteroscedasticity. Following Foster-McGregor et al (2014), who adopt a similar approach (and use the same AIS data as we do), we employ a method developed by Canay (2011) that accounts for the potential incidental parameters problem from the inclusion of a large number of fixed effects (in our case at the country and industry level). The approach consists of first estimating the fixed effects (̂;̂) from the standard conditional model using OLS and then, assuming they are constant across quantiles, defining a new dependent variable given by:…”

“…More specifically, we add the age (age) and the size (size_class) of the firm, both expected to be positively correlated with productivity (Helpman et al, 2004), and whether a firm is family owned (family), which usually has a negative impact on firm performance. We account also for export status (exporter) and foreign ownership (foreign), both of which are generally significant predictors of superior performance, including in the African context (Foster-McGregor et al 2014), and control for the skill intensity of workers in a firm (skill_ratio). In addition, we include a full set of country and industry fixed effects to account for all unobserved contextual factors that may influence the relationship between Government demand and firm performance.…”