Doctor of Philosophy
School of Accounting, Economics and Finance
Bari, Mohammad Tariful, Export Dynamics, Success and Efficiency: Micro-level Evidence from Bangladesh (2004-05 to 2011-12), Doctor of Philosophy thesis, School of Accounting, Economics and Finance, University of Wollongong, 2017. http://ro.uow.edu.au/theses1/221
The objective of this research is to understand the export dynamics and its efficiency implications in Bangladesh during the fiscal year (FY) 2004-05 to 2011-12, when it experienced rapid export growth. Advocates of firm heterogeneity theory strongly believe that research on firm level is the way to establish export-growth nexus. In line with the current benchmark of trade theories, this thesis conducts micro-level analyses of the export dynamics and its efficiency implications in Bangladesh, a country that is in the least developed set-up.
This thesis begins with an examination of the microdynamics that underly export growth. The dataset used for this research is customs data that includes all export transactions by Bangladeshi exporters between FY 2004-05 and 2011-12. The analysis shows that both the number of exporters and export per firm increased during this period. Throughout this time frame, the share of ‘export superstars’ (the top 5 per cent) in the total export is relatively low compared with other developing countries, implying that Bangladesh depended more on small and medium size exporters for its growth. The decomposition analysis shows that export growth along intensive margins (i.e., continuing exporters, products and destinations) accounts for the major portion of the short-run growth. Although the contribution of the extensive margin (i.e., new exporters, products and destinations) is low in the short run, it is quite an important part in long-run growth. These findings are robust even across the sectors. Thus, Bangladesh’s experience shows the importance of both these margins for sustained export growth. Finally, the cohort analysis shows that, in the first year, new exporters begin with a small volume of export and are subject to a high level of uncertainty about survival. However, after surviving the first year, these new exporters have higher chances of achieving growth in terms of export volume, number of products and destinations.
Next, the research addresses the question of determinants of export success. Using the transaction level data, it identifies experience, initial export and product competency as significant factors, along with a network of firms exporting identical product to the same destination. These findings are robust to the different models and sample specifications. This study then identifies the mediating channels through which the network affects export success. In line with Cadot et al. (2013), it finds that a larger network reduces financial constraints of exporters by providing a positive signal about the profitability of the export to financial institutions and, thus, contributes significantly to export success. Besides financial systems, it extends knowledge by identifying human capital formation as another influential candidate for the mediating channel.
This research further examines the evolution of the efficiency differential between exporting and non-exporting firms during a period of export growth in 2005-06 and 2011- 12 in Bangladesh using a non-parametric method. Firm level efficiencies and productivity growth are calculated using data envelopment analysis and the Global Malmquist Productivity Index method, respectively. The results show that the efficiency differential between exporting and non-exporting cohorts increased by the end of this period of export growth. On the entry side, export starters were more efficient than non-exporters during both the years of the study. On the exit side, the efficiency of continuing exporters is higher than the firms that exited from exporting. The exporters have higher chances of productivity and technological growth compared to non-exporters. While the aggregate efficiency of the exporting cohort is higher in both periods, it is significantly higher during 2011-12, implying higher within- and -between-firm (output allocation) efficiency in the exporting cohort.
This research concludes with policy recommendations for sustained export growth along the intensive and extensive margins and enhancing the productivity gains through export activities. The main recommended policies include areas such as export promotion strategies, the development of financial institutions and human capital formation.
This thesis is unavailable until Wednesday, May 01, 2019