David Atkin, Amit Khandelwal and Adam Osman instead get down and nappy
...we have just completed a randomised control trial on rug
manufacturers in Egypt to examine the channels through which exporting
affects the performance of firms....coupled with very detailed data
collection, [which] allows us to identify the causal impacts of exporting on
Specifically, we provided a subset of small rug
producers the opportunity to export handmade carpets to high-income
markets. To provide this opportunity, we partnered with a US-based
non-governmental organisation and an Egyptian intermediary to secure
export orders from foreign buyers through trade fairs and direct
marketing channels. With orders in hand, we surveyed a sample of several
hundred small rug manufacturers located in Fowa, Egypt. A random
subsample of these firms was provided with an initial opportunity to
fill these orders by producing 110m2 of rugs (approximately eleven weeks
of work). As in any standard buyer-seller relationship, firms were
offered subsequent orders provided they were able to fulfil the initial
orders to the satisfaction of the buyer and intermediary.
Rather than search for statistical data that might be lying around!
We find that the opportunity to export raises firm profits by between
15 and 25%, depending on the profit measure. .... These increases in profits are accompanied by large
improvements in product quality....
These findings are
suggestive of quality upgrading where buyers in high-income countries
demand high quality rugs that are slower to produce.
Which the carpet manufacturers learn by exchange. They found a need, and filled it. No magic needed.
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