This study tests whether firms in the EAC that supply in the foreign markets are in line with the learning by exporting hypothesis, in view of the differing performance indicators between exporters and non-exporters in these economies.
The data for this study is constructed from the World Bank Enterprise Survey for four EAC countries (Tanzania, Kenya, Uganda and Rwanda) between 2006 and 2013. Similar to other studies, the study finds a statistically significant performance difference in terms of labour productivity and average wage between exporting and non-exporting firms, which implies a premium for firms that sell in international markets. In addition, exporters exhibit higher growth of labour productivity relative to non-exporters, which is further evidence of learning by exporting. Comparison of the learning effectiveness between domestic and foreign owned firms indicates that domestically owned firms learn more from exporting than foreign owned firms; and that learning effects accumulate with time.
These results suggest that governments in these countries should design policies to promote export (such as promotion of EPZs, conducive investment climate and establishment of EPAs) so that many firms can participate in international trade and tap the export premium.
Related Articles
Taxation and Business Development in Zanzibar: Insights from a Business Survey
The private sector is a critical driver of economic growth in Tanzania. The government has expressed a strong commitment to fostering a vibrant business environment while ensuring sufficient public resources for economic development. However, balancing taxation and business growth remains a challenge. This report presents findings from a survey of businesspeople in Zanzibar, examining their […]
Enhancing Food Security among Smallholders through Climate-Smart Agriculture in Tanzanian Arid Regions
Climate-smart agriculture (CSA) has been proposed as an approach to mitigate some of the threats emanating from climatic changes and guide agriculture management in the era of climate change. This study aimed to (a) assess the CSA practices and technologies and their impacts on household food security among smallholders in Tanzania’s arid and semi-arid agroecological […]
Assessing Small – Scale Fisher’s Use of Traditional Knowledge for Climate Adaptation in Southern Coastal Areas
The study aimed to assess small-scale fishers’ use of traditional knowledge for climate adaptation in Lindi and Mtwara regions located in the Southern Coastal areas of Tanzania. The study used a qualitative research approach wherein in-depth interviews, focus group discussions and observation were used to collect data. Climate change affects fishing activities since rainfall is […]
Evaluating Indigenous Knowledge in Reducing Tomato PHL in Morogoro Region: Case Studies from Mvomero and Morogoro Districts
Tomatoes are one of the most widely consumed vegetables in sub-Saharan Africa, valued for their essential vitamins and minerals. This study assessed the effectiveness of Indigenous Handling Practices (IHP) in reducing post-harvest losses (PHL) in the tomato subsector. Specifically, it examined indigenous handling methods, growers’ perceptions, and factors influencing the adoption of these practices. READ […]