Abstract
Many developing countries are stimulating their firms to compete in world markets as part of the efforts to promote economic growth. This move is, however, driven by desirable performance characteristics that are observed among exporting firms relative to firms that sell in the domestic market only.
This chapter examines whether exporting firms in Eastern African Community (EAC) countries between 2006 and 2013 exhibit characteristics that are significantly different from non-exporters and hence whether learning by exporting takes place. Similar to other countries, exporting firms in Tanzania, Kenya, Uganda and Rwanda are more productive, pay higher wages and employ more workers relative to non-exporting firms and thus an indication of export premium. In line with this, exporters exhibit higher growth of labour productivity relative to non-exporters which is an evidence of learning by exporting. A comparison of the learning effectiveness between domestic and foreign-owned firms indicates that it is the domestic firms that learn more from exporting than foreign-owned firms; that learning effects accumulate with the length of export. Thus, export promotion activities in these countries should aim at stimulating as many firms as possible to participate in international trade and tap the export premium.
