of customs is an important trade facilitator via its effects on volume and shipping frequency (Dovis and Zaki, 2020; Hornok and Koren, 2015; Volpe et al., 2015). Barriers to trade may reduce market competition and erode the gains from international trade. This may decelerate the growth of efficient firms, and even result in lower value-added production (UNCTAD, 2005; Porter, 2000).

The profile of traders in developing and emerging economies is typically characterized by a large number of firms engaging in low-level trade, with a few “superstars” exporters facing few competitors. Firms can be classified in different categories based on their exports sales: “superstar” exporters, big player exporters and small players (Francis and Schweiger, 2017; EBRD, EIB and World Bank, 2016).<sup>8</sup> We find significant differences (or premia) in the average size and productivity levels between traders and non-traders. In particular, compared to non-traders, we find evidence of large productivity and firm size premia associated with the “superstar” and large exporters but not for firms that trade less intensively: “small players” are not necessarily more productive than non-exporters (Table 2).

The large premia for “superstar” exporters may be explained by policies favoring large exporters and privileging capital-intensive firms – for example, through lines of credit by the banking sector, but also direct public support, such as land and energy subsidies. Successful exporters, large firms or multinationals may receive subsidies, protection, and privileges that make it difficult for smaller domestic firms to access export markets and reap the scale and efficiency benefits from trade. On average, “superstar” exporters also tend to employ more workers and they pay higher wages. While they represent just 6% of the number of firms in our sample, they account for a significant share of total employment (around 25% of the total sample) and about half of total value added measured. Nevertheless, the higher export intensity, in line with higher capital intensity, is associated with a lower labor share within firms. Overall, these firms may thus depress the labor share in MENA.

Table 2. Productivity, size and growth of sales premia of exporters (by exporters’ size categories)

||(1)<br>Labour<br>productivity|(2)<br>Firm size<br>(log)|(3)<br>Cost of labour<br>per unit of sales|(4)<br>Cost of labour<br>per unit of<br>value added|(5)<br>Average<br>labour<br>costs per<br>employee|
|---|---|---|---|---|---|
|_Omitted category:_|_firms that do not_|_export_||||
|Superstar|2.484***|2.479***|-0.162***|-0.282***|1.082*|
||(0.382)|(0.440)|(0.030)|(0.052)|(0.564)|
|Big exporter|0.772***|1.201***|-0.050**|-0.056|0.415***|
||(0.162)|(0.150)|(0.021)|(0.037)|(0.095)|
|Small exporter|-0.318***|0.131|0.072***|0.033|0.061|
||(0.116)|(0.086)|(0.024)|(0.038)|(0.074)|
|Observations|5,138|5,537|5,032|2,659|5,249|
|R-squared|0.307|0.240|0.077|0.073|0.919|

_Note:_ OLS regressions using sampling weights. Standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1. “Superstar” exporters are defined as firms above the 95th percentile of the distribution of export sales, big player exporters are firms between the 50th and 94th percentile, and small player exporters are firms below the median. Other firm characteristics included in the regression but not reported in the table include: country, industry, a binary variable whether the firm is foreign-owned, firm size (included as explanatory variable in column 1), and labour productivity (in column 2).

8 “Superstar” exporters are defined as firms above the 95th percentile of the distribution of export sales, big player exporters are firms between the 50th and 94th percentile, and small player exporters are firms below the median.

9