Learning by Exporting: The Case of Mozambican Manufacturing

Abstract

In this article, we analyse the learning-by-exporting (LBE) hypothesis in the Mozambican context. Due to the presence of the 'Born-Global' phenomenon among exporters, we address the endogeneity introduced by self-selection, combining a generalised Blinder-Oaxaca approach with results from traditional matching techniques. Our results show that very few manufacturing firms export, and that export participation is highly persistent. There is also evidence supporting the LBE hypothesis and the results suggest a significant export premium of between 17 and 21%, controlling for differences in observable characteristics between exporters and nonexporters. Finally, qualitative information on non-exporters seeking new markets suggests that 'lack of knowledge of potential markets' is the most severe constraint to international market entry. We conclude that the Mozambican Export Promotion Institute (IPEX) could play an important role in overcoming this information deficit for potential Mozambican exporters.

Manufacturing Transformation

“…It is this linkage that is believed to ensure access to new technologies and allows for constant upgrading and maintenance in a Mozambican context (AIMO 2010;Marrengula et al 2012). This is supported by a recent finding in Cruz et al (2014a) showing that firms in Mozambican manufacturing learn by exporting, but that this learning process is significantly limited by significant external market access constraints.…”

Total Factor Productivity in South African Manufacturing Firms

“…We find significant productivity premiums for firms involved in international trade. Similar studies to ours also find a positive relationship between exporting and productivity (see Alvarez and Lopez, : for Chile manufacturing firms; Cruz et al ., : for Mozambique; Fernandes, : for Bangladesh; Newman et al ., : for Vietnam; and Van Biesebroeck, : for Sub‐Saharan Africa). Finally, we find that TFP increases relative to 2010 levels in 2011 and 2012 but experiences a statistically significant decline in 2013.…”

Was Africa rising? Narratives of development success and failure among the Mozambican middle class

“…According to the managers interviewed, benefits more often went to domestic elites or the foreign owners of large businesses rather than to local entrepreneurial SMEs, suggesting poor progress towards the key objectives of the 2011-2014 Poverty Reduction Action Plan (IMF, 2011). There had been some SME growth in the three sectors researched, but crucially, there had not been wider expansion in labourintensive industries (Cruz et al, 2017). Few people had entered the middle class.…”

“…The Mozambican petite-bourgeoisie could have enhanced their individual enterprises' profits if they learnt from foreign innovations, but if the state truly wanted Mozambique to follow in the footsteps of nations such as China, which recorded rapid growth and poverty reduction in the 2000s, then they need to reduce dependency on foreign investment and expand formal sector employment (Arrighi, 2007). Mozambique should have addressed the failure to develop labour-intensive industries in order to grow the middle class (Cruz et al, 2017). Instead, what emerged in the vibrant business district of downtown Maputo were a small number of highly visible local entrepreneurial and foreign-owned SMEs concentrated in service sectors or structurally integrated with the liberalized, natural resource-dependent economy.…”

“…The government and their donor partners had been unable to deliver the banking, electricity, road and port facilities that businesspeople needed to sustain and grow their enterprises (Vines et al, 2015). Neither had the ERPs enabled a truly liberal environment for SMEs to flourish in Maputo, especially in secondary manufacturing industries (Cruz et al, 2017). The machinery of socialism had been dismantled, but in its place had arisen systems of regulation and formal and informal taxation that inhibited entrepreneurship.…”