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Export Activity and Productivity: New Evidence from the Egyptian Manufacturing Industry

This study addresses the issue on the relationship between export participation and firm-level productivity, asking whether exporting firms are more productive than non-exporting firms and why that should be the case. Using a comprehensive data set of Egyptian firms that allows us to exploit the variation in firm export behavior over time, we find that total factor productivity and labor productivity are significantly higher in exporters than in non-exporters. When we differentiate between pre-entry and post-entry differences in productivity performance and after controlling for the potential endogeneity problem, we find that this exporter premia is driven by the learning-by-exporting hypothesis. We find no evidence that more productive firms self-select into export markets. Exporting makes firms more productive but more productive firms do not necessarily self-select into exporting.
1 :  CERDI - Centre d'études et de recherches sur le developpement international
Productivity Performance – Exports