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Entry and Survival in the Export Market: Spillovers from Foreign and Outward-Looking Domestic Firms in Ethiopia

  • Melaku AbegazEmail author
  • Sajal Lahiri
Original Article
  • 20 Downloads

Abstract

This paper examines spillovers from domestic-exporting and foreign-owned firms to the export entry and exit of local manufacturing firms in Ethiopia for the period 1996-2010. We find that downstream and upstream foreign-owned exporting firms improve the probability of domestic firms’ entering into export markets. Besides, foreign-owned exporting firms generate intraindustry spillovers that increase the export entry and survival rates of local firms. Spillovers from domestic exporters enhance the exporting likelihood of firms in input-supplying sectors. Moreover, exporting domestic and foreign-owned firms generate backward productivity spillovers that advance the export entry and survival of domestic firms through productivity gains.

Keywords

Manufacturing Ethiopia Spillovers Export entry Export survival Foreign direct investment 

Résumé

Cet article étudie les retombées des entreprises étrangères exportatrices de produits locaux sur les exportations des entreprises manufacturières locales en Éthiopie de 1996 à 2010. Nous constatons que les entreprises étrangères exportatrices présentes en aval et en amont augmentent la probabilité que les entreprises nationales pénètrent sur les marchés de l’exportation. En outre, les entreprises étrangères exportatrices génèrent des externalités intra-industrie qui augmentent les taux d’entrée sur les marchés d’exportation et de survie des entreprises locales. Les retombées des exportateurs de produits locaux augmentent la probabilité d’exportation des entreprises des secteurs de l’approvisionnement. En outre, les entreprises étrangères exportatrices de produits locaux génèrent des retombées tardives et positives sur la productivité, favorisant l’entrée sur le marché d’exportation des entreprises nationales, ainsi que leur survie, grâce aux gains de productivité.

JEL Classification

F21 F23 L67 O55 

Notes

Compliance with Ethical Standards

Conflict of interest

On behalf of all authors, the corresponding author states that there is no conflict of interest.

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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2019

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Minnesota DuluthDuluthUSA
  2. 2.Department of EconomicsSouthern Illinois University CarbondaleCarbondaleUSA

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