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What Drives Manufacturing Exports in Africa? Evidence from

By Måns Söderbom

Abstract

It has been suggested that sub-Saharan Africa will not be a significant exporter of manufactured goods because it lacks the necessary skills. Wood 1994 argues that Africa can only export unskilled labour intensive manufactures, as unskilled labour is relatively abundant. Elsewhere it has been argued that African exports will be dominated by natural resource intensive goods, and that manufacturing exports therefore will be marginal, even in the labour intensive sectors (Wood and Berge 1997; Wood and Mayer 1998). In contrast to this line of thought, which is based on comparative advantage theory, is the view that firm-level factors are more important determinants of exports than factors related to industry (Krugman 1989; Grossman and Helpman 1991). In particular, emphasising that entry into exporting is associated with significant fixed costs, this theory predicts that only relatively productive firms with relatively high returns to exporting will choose to incur the costs and enter the international market. 1 In response, recent years have witnessed a rapidly growing empirical literature examining the determinants of exporting, and This paper draws on collaborative work with Francis Teal (Söderbom and Teal 2000). I thank Francis Teal for comments and suggestions, and Jan Gunning for giving me access to the Zimbabwean data. All errors are mine alone

Year: 2001
OAI identifier: oai:CiteSeerX.psu:10.1.1.196.6390
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