Annual Forum Papers

Exporting from Manufacturing Firms in Sub-Saharan Africa: Micro Evidence for Macro Outcomes

  • Year: 2004
  • Organisation: Centre for the Study of African EconomiesDepartment of EconomicsUniversity of Oxford
  • Author(s): Neil Rankin, Mans Soderbom and Francis Teal
  • Countries and Regions: Southern African Development Community (SADC)

The poor performance of many African economies has been associated with low growth of exports in general and of manufacturing exports in particular. In this paper we draw on micro evidence of manufacturing firms in five African countries - Kenya, Ghana, Tanzania, South Africa and Nigeria - to investigate the causes of poor exporting performance.Micro empirical work on manufacturing firms has focused on the relationship between export participation and efficiency. The evidence for SSA shows that exporters tend to be larger, more capital intensive and produce more output per unit of labour than non exporters. Weshow that firm size is a robust determinant of the decision to export. It is not a proxy for efficiency, for capital intensity, for sector, for time-invariant unobservables or for the fixed cost of entry into exporting. The implication of these findings is that large firms are necessary for exporting. However larger firms are more capital intensive. Small firms may create jobs, they will not be able to export. We also find that efficiency only impacts on the decision to export regionally, defined as within Africa, not internationally. The implications of these findings are discussed.