Tariffs and Firm Performance in Ethiopia

We use data on Ethiopian manufacturing firms and commodity-level data on tariffs to examine the effects of trade liberalisation on firm performance. We distinguish the productivity gains that arise from reducing final goods tariffs from those that arise from reducing tariffs on intermediate inputs. We find no evidence that output tariff reduction improves productivity, but we find large positive effects of input tariff reductions. These are robust to alternative productivity measures, treating tariffs as endogenous, and various generalisations of the model. We conclude that policy measures designed to facilitate access to inputs produced abroad may lead to productivity gains.     

Global Value Chains and Market Formation Process in Emerging Export Activity: Evidence from Ethiopian Flower Industry

This article provides a case study of the Ethiopian flower export industry which successfully emerged at time when the EU market (main destination) was already characterised by increasingly stringent standards and delivery requirements. Entering this market required a multitude of capabilities at firm, sector and national levels. Several of these capabilities were absent or weak in the domestic market when the new activity kicked off. The article analyses how the capabilities of individual firms and the industry at large co-evolved and the role of various actors in the ‘market formation’ process.