No.38 Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?

What is the impact of export costs on the speed and extent to which African firms exports? We answer this　question using a sample of 49,584 (mostly formal) firms across 71 countries, including 5,839 firms in 16　African countries surveyed by the World Bank during 2002 and 2003. We find that firms in African countries　face higher export costs on average than firms in　other parts of the world. However we find that African firms are more likely to enter export　markets, but that when they do the extent of their exports (exports as a share of their total　sales) is on average less than that of firms elsewhere. Also, younger firms are more likely to　start exporting than older firms. As for the impact on export costs, we establish that the costs of　exporting (as measured in US dollars) lower the likelihood and the extent of African firms’ exports but not　when African firms start exporting.

Keywords: international entrepreneurship, exports, transport costs, firm heterogeneity, Africa