Export Survival of Manufacturing Firms in Ethiopia: Empirical Evidence

Abstract

This study used panel data for manufacturing firms from 2006 to 2016 to analyze the patterns and determinants of export survival of exporting firms in Ethiopia. The empirical investigation has two parts: non-parametric and semi-parametric methods. The non-parametric method analyzes the survivor function and the hazard (exit) rate of firms on the whole sample and by groups, while the semi-parametric analyzes a regression outputs based on the discrete-time model of proportional hazard model.The result from the survivor function analysis shows that, at the end of the study period, the number of firms that survive in export market are more than 50%. Moreover, the result of the hazard rate reveals as the duration of time increases, the rate at which firms exit the export market decreases sharply. With regard to our semi-parametric analyses, we examine the factors that affect survival of manufacturing firms in international market and observed the direction of the impacts they have on the survival rates. The findings show that large and medium firms, firms that have higher productivity, export oriented firms, private owned enterprises, firms located in textile and garment industries, firms located outside Addis Ababa and firms categorized as importers have higher probability of staying in export markets than the others.

Keywords: Export survival, Cox-model, Ethiopia