Not so different from non-traders: trade premia in the Middle East and North Africa David C. Francis and Helena Schweiger Summary This paper uses a unique, comparable firm-level dataset covering more than 100 developing economies to provide a novel set of stylised facts on firms engaging in international trade in either manufacturing or services, focusing on the Middle East and North Africa (MENA) region. We show that firms in MENA are more likely to export and/or import than their counterparts elsewhere. However, we do not find the expected positive and significant productivity premia: while MENA’s larger exporters are also more productive, a large share of exporters – the comparatively low- volume ones – are no more productive than non-traders. We also confirm positive and significant productivity premia – the largest among the regions covered – for importing manufacturers. In contrast, we find no size or productivity premia for MENA firms that only sell their goods abroad. These patterns could be explained by the region’s higher barriers to buying goods from abroad. Keywords: International trade, firms, manufacturing, services, developing countries JEL Classification Number: F14, F19, F23 Contact details: David C. Francis, The World Bank Group, Development Economics, 2121 Pennsylvania Avenue, N. W., Washington, D. C. 20433, USA, email:
[email protected]. Helena Schweiger, One Exchange Square, London EC2A 2JN, UK, email:
[email protected]. David C. Francis is a Private Sector Development Specialist at the World Bank and Helena Schweiger is a Senior Economist at the EBRD. This paper builds on the authors’ work on the joint report by the EBRD, EIB and World Bank Group on “What’s Holding Back the Private Sector in MENA? Lessons from the Enterprise Survey”.