This study explores the relationship between exports and productivity using a panel dataset of
Egyptian manufacturing firms. Most previous studies using data from more developed
countries suggest that exporters are more productive than non-exporters because the more
productive firms self-select into export markets, while exporting does not necessarily improve
productivity. We investigate if exporting firms are more productive than non-exporting firms
and, if so, whether the productivity differential is due to a self-selection process or to the role
of learning from exporting. We also ask if the extent of export activities matters for
productivity. We find that both labor productivity and total factor productivity are
significantly higher for exporters than for non-exporters. On average, labor productivity and
total factor productivity are, respectively, 46% and 63% higher for exporting firms than for
domestically-oriented firms. When we differentiate between pre-entry and post-entry
differences in productivity, it appears that this export premium is driven by a learning-byexporting
process rather than just a self-selection of more productive firms into exporting.
This weak evidence for the selection hypothesis is a reflection of the importance of the level
of development of destination countries. In contrast to exporters to OECD countries, exporters
to Non-OECD countries self-select into export markets, signaling the importance of the
technical assistance from foreign buyers benefiting the former exporters. We also find an
inverted U-shaped relationship between export intensity and productivity, suggesting the
existence of a “threshold of exporting”. These results are robust to controlling for additional
firm characteristics and potential outliers.