Vast empirical evidence underscores that exporting firms are more productive than non-exporters. As governments accordingly pursue export-promoting policies we are interested in the firmness of these conclusions with respect to African small and medium sized enterprises (SMEs) and the influence of the destination of export trade. Using a micro-panel dataset from five African countries we confirm the self-selection. We apply propensity scores to match exporters and use a difference-in-difference methodology to test if African SMEs experience productivity gains because of export participation. Results indicate that African firms significantly learn-by-exporting. Manufacturers obtain significant performance improvements due to internationalization although this effect is moderated by export destination. Firms that export outside Africa become more capital intensive and at the same time hire more workers. In contrast we find evidence that exporters within the African region significantly downsize in capital intensity. Results regarding skill-bias of internationally active firms are mixed, where exporters within the region expand in size and hire more relatively unskilled workers.
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Sometimes people say that economics and (other) social sciences are not real sciences. It is argued that this vision is wrong. The scientific method is critical as to how problems should be organized in order to let it make sense. But the real (economic, social and educational) world does not always offer us features and challenges that can be measured and counted by the far developed scientific means. The more uncertainty, the more the need for knowledge, the easier the discrepancy between the studied phenomenon and the measured aspects thereof. It is concluded that education and creativity are needed, even more than ever before!
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