Although there is no definitive answer as to which hypothesis better explains the higher productivity of exporters, recent enterprise-level studies have found evidence consistent with the learning-by-exporting hypothesis in Africa.<sup>3</sup> Using enterprise-level data from the mid-1990s for Cameroon, Ghana, Kenya, and Zimbabwe, Bigsten _et al_ . (2004), who use simultaneous equations estimation to control for reverse causation, find that exporting results in efficiency gains.<sup>4</sup> In addition, Mengistae and Pattillo (2004) find that direct exporters and firms that export outside of Africa are more productive than other exporters, which they interpret as consistent with the learning-by-exporting hypothesis. If exporting resulted in productivity improvements, policies that promote exports—or at least remove biases that discourage exports—might improve productivity and ultimately result in higher wages and income.

Although manufacturing enterprises in many African countries have been relatively unsuccessful in export markets, there are significant differences between countries. For example, both macroeconomic data and the firm-level data used in this project suggest that manufacturing enterprises in Senegal and Kenya are more successful than enterprises in Ethiopia, Mali and Mozambique. This paper uses enterprise-level data from eight countries— Ethiopia, Kenya, Mali, Mozambique, Senegal, Tanzania, Uganda and Zambia—to explore different factors that affect export performance. In particular, the paper looks at enterprise characteristics, trade policy and the quality of transportation infrastructure.

The paper finds that despite significant reductions in tariff and non-tariff barriers, government policies, including restrictive trade and customs regulations and poor customs administration, continue to discourage exporting. Improving policy in these areas could have a large impact—reducing trade and customs regulations from the level observed in the second

> 3 Results from other countries are inconclusive.  Using data from Columbia, Mexico and Morocco from the 1980s and early 1990s, Clerides (1998) conclude that the evidence supports the self-selection hypothesis, while providing little support for the learning by exporting hypothesis.  Bernard and Jensen (1999) and Liu _et al._ (1999) find similar results for the United States and Taiwan, China.  Aw _et al_ . (2000), using data from the 1980s and early 1990s, find some evidence to support the learning-byexporting hypothesis for some industries in Taiwan, China but no evidence to support it for Korea. Other studies, however, do find evidence consistent with learning by exporting.  Kraay (1999) and Fajnzylber (2004) finds evidence or learning among Chinese and Brazilian enterprises respectively.  Finally, using data from Indonesia, the Philippines, Thailand, Malaysia and Korea, Hallward-Driemeier _et al._ (2002) find that exporters take concrete steps to improve productivity before they enter export markets  (e.g., training employees and using foreign technology).  They interpret this as suggesting that firms try to pass the threshold to enter such markets.

> 4 Bigsten _et al_ . (2004) also find evidence consistent with the self-selectivity hypothesis.

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