The Impact of Exporting: Evidence from a Randomized Experiment in Egypt

We conduct a randomised control trial that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on firm performance. Treatment firms report 15-25 percent higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency. First, treatment firms have higher productivity and quality after accounting for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs, treatment firms receive higher quality assessments despite no difference in production time. Third, treatment firms exhibit learning curves over time. Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.

Policy implications 
Increasing market access may be relatively more impactful than microcredit access or business training programs to SME growth in developing countries.
David Atkin, Amit K. Khandelwal, Adam Osman; Exporting and Firm Performance: Evidence from a Randomized Experiment, The Quarterly Journal of Economics, Volume 132, Issue 2, 1 May 2017, Pages 551–615,