Exports and firmlevel efficiency in the African manufacturing sector

Abstract

In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Measures of firm-level efficiency using stochastic production frontier models are constructed for the period 1992 to 1995. The results of both random effects and time-variant productivity models reveal that exporters are more efficient than non-exporters. Further, exporters increased their efficiency during the period more rapidly than non-exporters, and new entrants to exporting had the largest subsequent efficiency gains, controlling for other characteristics. The effect of exporting on efficiency appears to be larger in this African sample than in comparable studies of other regions which is consistent with the smaller size of domestic markets.

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