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Abstract

This study analysed the drivers of firm-level labour productivity by export status and estimated the counterfactual gains from exporting. Using the 2022 nationally representative Tanzania Enterprise Survey and an endogenous switching regression model, results revealed significant differences in the drivers of labour productivity between exporting and non-exporting firms. The productivity of exporting firms was positively associated with business linkages with small and medium-sized enterprises, foreign ownership, access to finance, and capital intensity. Similar factors were associated with labour productivity among non-exporting firms, alongside linkages with large firms. However, access to finance had asymmetric patterns: exporting firms benefited from greater financial access, whereas non-exporting firms were constrained by limited access to finance. Counterfactual treatment effects indicated positive expected productivity gains among non-exporting firms had they exported, while providing limited evidence in support of the labour productivity gains of exporting firms’ post-entry. The findings highlight the importance of targeted trade policies for productivity improvement.

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