Abstract
This paper tests two alternative models of selection into export: lower costs and better market familiarity. Both are potentially subject to learning-by-doing, but differ in the type of experience required. Learning to produce at lower cost – what we call productivity learning – depends on general experience, while learning to design products that appeal to foreign consumers – market learning – depends on export experience. Using panel and cross-section data on Moroccan manufacturers, we uncover evidence of market learning but little is evidence that productivity learning is what enables firms to export. These findings are consistent with the concentration of Moroccan manufacturing exports in consumer items, i.e., the garment, textile, and leather sectors. It is the young firms that export. Most do so immediately after creation. We also find that, among exporters, new products are exported very rapidly after production has begun. The share of exported output nevertheless increases for 2–3 years after a new product is introduced, which is indicative of some learning. Old firms are unlikely to switch to exports, even in response to changes in macro incentives.
Highlights
For many poor countries, manufacturing exports are seen as the royal path to growth
The presence of more temporary workers in the workforce is associated with more exports in the light manufacturing sector, further reinforcing the idea that a cheap and flexible labor force is behind Moroccan exports
We find that old Moroccan firms are much less likely to export than young firms, even controlling for location, sector, year, firm size, firm ownership, and proximity effects
Summary
For many poor countries, manufacturing exports are seen as the royal path to growth. One often heard explanation for the contrasted experiences of manufacturing export strategies is that exporting is subject to learning-by-doing (e.g. Bernard and Jensen 1999b, Tybout 2000, Harrison and Hanson 1999, Bigsten, Collier, Dercon, Fafchamps, Gauthier, Gunning, Oduro, Oostendorp, Patillo, Soderbom, Teal and Zeufack 1999, Bigsten, Collier, Dercon, Fafchamps, Gauthier, Gunning, Oduro, Oostendorp, Patillo, Soderbom, Teal and Zeufack 2000). Countries or enterprises that lack experience find it difficult to compete in international markets. For this reason, countries and firm first need to learn how to produce before attempting to penetrate export markets. Countries and firm first need to learn how to produce before attempting to penetrate export markets In this view, the domestic market is essential as learning ground for exports
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