Trade” initiatives. Yet there is only a handful papers that address domestic and cross-border constraints in export performance of firms. One such paper is Clarke (2005), which uses a similar dataset from ICS to show how behind-the-border, direct constraints on trade (e.g., ports and customs efficiency) affect firm-level export performance in Africa. This paper extends Clarke’s research by incorporating the geographical orientation of firms’ export performance and the extent of their market diversification in its analysis. Specifically, it differentiates exports to markets outside Africa, such as the EU and U.S., from exports to the regional markets within Africa in addressing the relationship between firms’ export performance and the behind-the-border factors. This paper also considers a wider set of behind-the-border domestic factors, including both those directly related to trade and those related to production, which are either public (e.g., public infrastructure service quality) or private (e.g., generator ownership, capital vintage). The paper also examines various firm attributes that help lower trading costs, including both sunk entry cost, such as search cost, as well as variable trading costs (e.g., Internet access).

This study finds that the degree of market diversification in the African manufacturing sector, measured in terms of the number of export destination regions of individual firms, is highly correlated with export intensity of the firms, measured as the ratio of export revenues to the total sales revenues. Similar to the findings of past research that analyzed firms’ participation in export markets in Africa, we found a strong scale effect in both export intensity and market diversification. Larger firms export more intensively and to wider geographical areas. In addition, technology factors such as new vintage capital (proportion of new machinery and equipment in firms’ total capital stock) and Internet access have strong positive effects on both market diversification and export intensity. These technology factors not only have positive productivity enhancement effects, but they also lower trade-related sunk entry cost. Internet access, for example, reduces the search costs for developing new _clientele_ abroad. New machinery and equipment improve product quality to meet product standards set abroad, particularly in high-income markets.

While these factors are significant in explaining firm-level export intensity in general, we found some qualitative differences between regional markets (i.e., intra-African exports) and global markets (i.e., exports outside Africa). These results were based on our analyses of export intensity in regional and global markets using a Tobit model as well as estimation of a multinomial probit model of market orientation. Consistent between these two models, foreign ownership, both foreign African-owned and foreign non-African-owned, was a significant factor in characterizing the intensity of global, but not regional, exports. The technology factors, i.e., new vintage capital and Internet access, are significant in explaining intensities of both types of exports, but more so in the case of global exports. On the other hand, public infrastructure constraints such as inferior power services and customs inefficiency seem to have a more immediate impact on the regional export 3