Lahore School of Economics

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Exporters in Pakistan and Firms Who Do Not Export: What’s the Big Difference?

In a recent paper published in the Lahore Journal of Economics titled ‘Exporters in Pakistan and Firms Who Do Not Export: What’s the Big Difference?’ Dr. Theresa Chaudhry (of the Lahore School of Economics) and Muhammad Haseeb took a novel look at the critical issue of Pakistani exports.

The authors used two cross-sections of firm-level data — the Census of Manufacturing Industries (CMI) 2000/01 for Punjab and the World Bank Enterprise Survey data set (2006/07) for all Pakistan to look at the characteristics of exporting firms. The authors found similar levels of export market participation but very large shares of export sales in firm revenue for those who do, compared to the US sample. The authors also found, as do many other studies, that exporters exhibited significantly higher total factor productivity (TFP) and are larger in terms of employment than non-exporters. Considering the eight largest sectors (which comprise more than 80 percent of the CMI Punjab), with a few exceptions, exporters had higher labor productivity and offered higher compensation to workers, but used more capital per worker and more imported inputs.

The authors concluded that the Pakistani government’s recent emphasis on developing the ready made garments sector is well placed since more than half the apparel producers in the CMI Punjab 2000/01 were exporting and nearly all of their output (93 percent). The authors’ findings also discovered the fact that the capital-labor ratio and use of imported inputs was modest and that exporters were relatively large employers with 400 workers on average and offered significantly higher compensation than non-exporting firms.

The paper is available on the Lahore Journal of Economics website here

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posted by S A J Shirazi @ 5/14/2015 10:00:00 AM,

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