This paper documents the important role of multi-product and multi-destination exporters in the
expansion of exports for a low income country. This is made possible by access to a new and
unique transaction level data for Kenya, enabling decomposition of both firm level and aggregate
exports into intensive and extensive margins. The transaction level data is complemented with
detailed firm characteristics information from a comprehensive census of industrial production,
allowing the opportunity to examine the correlation between trade margins and measures for firm
productivity.
The findings highlight the significance of nurturing and owning multi-product and multidestination
types of exporters for low income countries. Multi-product exporters in Kenya
consist of about 28 percent of the entire population of exporters but were responsible for
approximately 87.5 percent of the total value of exports in 2005. Combining the shares of firms
that exported more than five products to more than five destinations, they explain approximately
85 percent of the entire value of exports in a year.
Across manufacturing firms, productivity is positively associated with the number of products
exported, the number of countries served and the total value of firm level exports. A one percent
increase in the value added per worker translates to a 0.05 percent increase in the number of
products exported. This paper confirms recent findings on the importance of multi-product and
multi-destination exporters and their ability to export many products to many destinations, in a
low income context.