Exporting and Firm Performance: Evidence from a Randomized Experiment

By David J. Atkin, Amit K. Khandelwal, Adam Osman. 2017

375 citations recorded by the source corpus.

We conduct a randomized experiment that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on firm performance. Treatment firms report 16–26% higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency. First, treatment firms have higher productivity and quality after controlling for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs and same capital equipment, treatment firms produce higher quality rugs despite no difference in production time. Third, treatment firms exhibit learning curves over time. Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.

Subfields: Demography, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/6aae1fee215d1ff4d6ace873680595263ed4895d

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Demography

1. Marcio Cruz
2. Elwyn Davies
3. D. Medvedev

In Economics and Econometrics

1. Marcio Cruz
2. Elwyn Davies
3. L. Iacovone
4. D. Medvedev
5. Gaurav Nayyar

In Strategy and Management

1. L. Iacovone
2. D. Medvedev
3. Gaurav Nayyar

Citations in the corpus

• Policies to Support Businesses through the COVID-19 Shock: A Firm Level Perspective (2021, positive): “A supplementary online appendix for this article can be found at The World Bank Research Observer website. and export promotion programs help alleviate information and networking frictions in accessing markets (Arráiz, Henríquez, and Stucchi 2013; Atkin, Khandelwal, and Osman 2017).”
• The Arrival of Fast Internet and Employment in Africa (2019, neutral): “2015; Hardy and McCasland 2015; Atkin et al. 2017; Mitra et al. forthcoming). 5 See Henderson, Storeygard, and Weil (2012); Bleakley and Lin (2012); Michalopoulos and Papaioannou (2013, 2018); Lowe (2014) on night lights as a proxy for average incomes.”
• The Impact of Trade Liberalization on Firm Productivity and Innovation (2018, neutral): “Interestingly, learning by exporting happens predominantly at firms exporting to more developed economies (van Biesebroeck 2005; De Loecker 2007; Atkin, Khandelwal, and Osman 2017), likely due to such economies offering more scope for firms to learn from technologically advanced buyers.8 IV.”