Learning to export and learning by exporting : the case of Ethiopian manufacturing

In this study, we investigate the relationship between exporting and firm performance using a longer panel dataset of Ethiopian manufacturing firms for the period 1996 - 2009. We test two hypotheses regarding exporting: selection into exporting versus learning by exporting. According to the selection into exporting hypothesis, more productive firms self-select into exporting due to high entry costs. The learning by exporting hypothesis, on the other hand, emphasizes that firms learn after entering into the export market. We find evidence in support of both self-selection and learning by exporting.