Not So Different from Non‐Traders

54 Pages Posted: 18 Apr 2017

See all articles by David Francis

David Francis

World Bank, Development Economics

Helena Schweiger

European Bank for Reconstruction and Development (EBRD) - Office of the Chief Economist

Date Written: April 2017

Abstract

This paper uses a unique, comparable firm‐level dataset covering more than 80 developing middle‐income economies to provide a novel set of stylized facts on firms engaging in international trade, focusing on the Middle East and North Africa (MENA) region. We show that firms in MENA are more likely to export and/or import than their counterparts elsewhere. However, we only find the expected positive and significant productivity premia for exporters outside of MENA. While MENA's larger exporters are indeed more productive than non‐exporters, a large share of exporters – the comparatively low‐volume ones – are not. We also confirm positive and significant size and productivity premia for manufacturers that import only, with productivity premia in MENA at least double of those in middle‐income economies elsewhere. In contrast, we find no size or productivity premia for MENA's manufacturers that export, but do not import. These patterns are consistent with substantial distortions in the relative fixed and variable costs of trading, likely a reflection of selectively applied policies.

Keywords: International trade, firms, manufacturing, services, developing countries

Suggested Citation

Francis, David and Schweiger, Helena, Not So Different from Non‐Traders (April 2017). Economics of Transition, Vol. 25, Issue 2, pp. 185-238, 2017, Available at SSRN: https://ssrn.com/abstract=2954236 or http://dx.doi.org/10.1111/ecot.12122

David Francis (Contact Author)

World Bank, Development Economics ( email )

1818 H St NW
Washington, DC 20433
United States

Helena Schweiger

European Bank for Reconstruction and Development (EBRD) - Office of the Chief Economist ( email )

One Exchange Square
London EC2A 2JN
United Kingdom

HOME PAGE: http://www.helenasch.net

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