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Journal of Economic Integration 2024 March;39(1) :151-177.
DOI: https://doi.org/10.11130/jei.2024001
The Effects of Trade Participation on Labor Productivity, Wages and Female Employment: Evidence from Egyptian Manufacturing Firms

Yasmine Kamal 

Faculty of Economics and Political Science, Cairo University, Egypt
Corresponding Author: Yasmine Kamal ,Email: Yasmine_k@feps.edu.eg
Copyright ©2024 Journal of Economic Integration
ABSTRACT
The study examines the effects of firm trade participation on labor productivity, wages, and female employment using recent manufacturing enterprise survey data for Egypt. It finds positive labor productivity premium for both exporting and importing firms, being the highest for small-sized exporting firms reflecting their greater benefits from learning-by-exporting. Importing intermediate inputs enhances productivity the most for firms in medium-high and high technology intensive sectors. Moreover, both exporting and importing firms pay higher average wages than non-exporters and non-importers, where economies of scale and higher productivity of trading firms-rather than the skill characteristics or composition of labor force- work as the explanatory channels. Also, firm trade participation enhances gender labor outcomes through reducing the gender wage gap and employing a higher share of female workers especially in low technology export sectors. To translate these favorable impacts into an economywide labor market improvements in Egypt, more efforts should be done in reforming the business environment to enable a greater participation of small firms into export markets and an easier access of firms-especially those operating in technologically advanced sectors- to essential imported inputs that embody advanced foreign knowledge and/or are of higher quality than domestic alternatives.

JEL Classification
F10: General
F14: Empirical Studies of Trade
F16: Trade and Labor Market Interactions
Keywords: trade participation | labor productivity | average wages | gender wage gap | female employment | firm-level | Egypt
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