LEARNING-BY-EXPORTING AND DESTINATION EFFECTS: EVIDENCE FROM AFRICAN SMEs

Exports, in this study, are more productive than non-exports, but why? Using a micro-panel dataset from five African countries we show that more productive small and medium enterprises (SMEs) self-select into exporting. Ultimately we are interested in impact of exporting on productivity. Results demonstrate that African SMEs experience productivity gains because of export participation. Firms learn-by-exporting, however, improvements are moderated by export destinations. Firms that export outside Africa become more capital intensive and improve productivity while hiring more workers. In contrast, firms that export to African neighbouring countries downsize on capital and decrease productivity while hiring more unskilled workers at higher wages.