82
Pathways to African Export Sustainability
and they will figure out how to survive. We will see in this section whether the empirical literature offers any guidance on how to maximize learning effects, the lessons of which may be relevant for policies to raise survival rates. If there are synergies between exporters, the dynamic learning effect is compounded by a market failure—namely, the positive externality that exporters exert on each other. Intuitively, it is not obvious why exporters should reinforce each other: one would rather expect them to compete with each other. But channels of interaction other than price—which is unlikely to be a strong one for small-scale African exporters anyway—may exist, whereby exporters reinforce each other’s credibility. The following two sections will explore these conjectures in turn.
Do African Firms Learn from Exporting? Whether firms learn from exporting or simply self-select into exporting markets when they are more efficient has been a subject of controversy for a while in the international trade literature. Exporters are typically the upper tail of the distribution of firms in terms of size, capital intensity, productivity, wage levels, and survival (see, for example, Bernard and Jensen, 1995, 1999, 2007). Until recently, the weight of the empirical evidence supported the theoretical insight initiated by Melitz (2003): that more efficient firms exported because they were more efficient, not the other way around, because learning effects appeared small or insignificant. Most of the papers in this strand of literature (Aw and Hwang 1995; Castellani 2002; Delgado, Farinas, and Ruano 2002; Hansson and Lundin 2004; Wagner 2002) used data from industrial countries, which means that their applicability to an African context was limited. But a few used data from developing countries. Clerides, Lach, and Tybout (1998) used data from Colombia and Mexico; Isgut (2001) from Colombia; and Alvarez and Lopez (2005) from Chile, all with pretty much the same message. More recently, however, new empirical evidence has emerged suggesting that firms do learn from exporting, in particular when they operate from emerging markets. Most of this literature relies on matching techniques.2 Blalock and Gertler (2004) found that the total factor productivity (TFP) of Indonesian exporters rose more than that of non-exporters. De Loecker (2004) and Hagemejer and Kolasa (2008) also found that exporting firms had larger TFP growth than matched non-exporting ones.