Working Paper: CEPR ID: DP10276
Authors: David Atkin; Amit Khandelwal; Adam Osman
Abstract: We conduct a randomized control trial 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 15-25 percent 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 accounting for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs, treatment firms receive higher quality assessments 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.
Keywords: exports; learning-by-exporting; market access; productivity; quality
JEL Codes: D24; F10; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exporting (F10) | Firm Performance (L25) |
| Exporting (F10) | Profits (D33) |
| Exporting (F10) | Quality Metrics (C52) |
| Exporting (F10) | Learning-by-Exporting Effects (F14) |
| Exporting (F10) | Knowledge Transfers (O36) |
| Cumulative Export Production (F10) | Quality and Productivity Improvement (L15) |