Export orientation and productivity in sub-Saharan Africa

Analysis of firm-level panel data from three Sub-Saharan African economies shows that export manufacturers have an average total factor productivity premium of 17 percent. In addition to the effect on productivity levels, exporters enjoy produc-tivity growth that is 10 percent faster than do nonexporters. The data do not allow testing of whether these premiums are because more efficient producers go into exporting or because of a process of learning-by-exporting. In thinking about the mechanisms behind selectivity and learning, however, our finding of higher premi-ums for direct exporters, and for those who export to areas outside of Africa, could be interpreted as being consistent with learning-by-exporting effects. [JEL D21, D24, L60 O12] A recent World Bank report argues that greater export orientation of manufac-turing industries should be promoted as an important element of the growth strategy for Sub-Saharan Africa (World Bank, 2000). The argument is partly premised on the idea that exporting leads to productivity gains. However, there are also calls from others for public intervention to help raise the productivity of Africa’s potential exporters to the entry thresholds of international markets, with investment programs and policy reforms aimed at reducing the transaction costs of foreign trade. Both of these approaches hinge on the relative productivity of exporters. Among African manufacturers, are exporters more productive than non-exporters? And if so, does this mean that there are productivity gains from export-ing? Or, is the higher productivity of exporters a problem of lack of competitivenes