Export agglomeration economies in Sub-Saharan Africa manufacturing and service sectors

This study examines the effects of export spillovers in the manufacturing and service sectors of 19 sub-Saharan Africa (SSA) countries. We investigate whether the exporting probability of a domestic firm is influenced by the pool of nearby domestic and foreign-owned exporting firms. We adopt a multi-level estimation approach to control for heterogeneities due to country- and city-level effects. Results indicate that the exporting probability of a domestic manufacturing firm is positively associated with the pool of domestic exporting firms in the same industry and foreign-owned exporting firms in other industries. However, negative export spillovers are observed from foreign-owned exporters in the same industry and domestic exporters in other industries. In the service sector, we find positive spillovers from domestic exporters in the same industry. Policymakers in sub-Saharan Africa should encourage exporting domestic firms to agglomerate geographically by creating industrial zones and providing services to promote information exchange between exporting and non-exporting firms.