Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary In the context of rug-making in Egypt, the opportunity to export provides evidence that learning-by-exporting occurs, and can lead to production quality and cost improvements. A brief description of the project's goals and its current state Abstract <p>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.</p> The full abstract of the study, if available Links https://academic.oup.com/qje/article/132/2/551/3002609 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question A randomly chosen set of these firms were offered the opportunity to produce orders generated by a local carpet distributor destined for retailers in the United States and Europe. The orders were for a significantly higher quality carpet than the typical product produced by these firms for the domestic market. Sample Trial population and sample selection In July 2011, a list was compiled, with the help of an Egypt-based NGO, of all carpet firms in Fowa who had fewer than 5 employees, bought their own inputs, and had never previously worked with the exporter. These firms specialize in one of four rug types. Firms were randomly allocated to treatment, and were then visited by the survey team and a representative of the exporter and were offered the opportunity to fill an international order. On this visit, the firm was shown the rug design, and given other production specifications. Ultimately, treatment firms had the option of accepting to the production opportunity or not. Number of treatment groups Size of treatment groups 35 firms (take-up: 32 firms) Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Working with an exporter, export orders were secured and the orders were divided and allocated among firms in the treatment group. The treatment firms were visited by the survey team and a representative of the exporter, and allowed the opportunity to fill the order. On this visit, the firm was shown the rug design, given other production specifications, and offered them approximately 11 weeks of work. If the firm accepted, the exporter delivered the necessary inputs to ensure all rug orders were consistent across producers. As further export orders were generated, the exporter continued to place them only with the treatment firms who produced satisfactory rugs in the initial order. Rounds of data collection Baseline data collection and method Field surveys collecting data on firm production, rug quality, and household and demographic characteristics. Measures of Production: Profits, revenues, expenses, output quantity and prices, input quantity and prices, total labour hours worked, the specifications of the rugs produced that month. Measures of Quality: Assessed by a master artisan across 11 dimensions. Data collection method and data collected Evaluation Outcome variables <p>Profits, quality.</p> Results <p>Operating profits for treatment firms increase 15-20% relative to control. These results suggest that demand-side constraints may be a critical barrier to firm growth in developing countries and can be mitigated through market access initiatives. This growth in profits is driven by substantial quality upgrading and declines in output per hour, indicating that foreign buyers demand higher quality products that take longer to manufacture. Further evidence suggests that these technical improvements were driven by learning-by-exporting.</p> Intervention costs Not available. Cost benefit ratio Reference 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, https://doi.org/10.1093/qje/qjx002 Citation for use in academic references
