Determinants of Export Decisions by Manufacturing Firms in Botswana
International Journal of Business and Economics Research
Volume 8, Issue 5, October 2019, Pages: 257-262
Received: Jun. 11, 2019; Accepted: Jul. 16, 2019; Published: Aug. 5, 2019
Views 443      Downloads 169
Kefilwe Sebolao, Department of Economics, University of Botswana, Gaborone, Botswana
Lesego Sekwati, Department of Economics, University of Botswana, Gaborone, Botswana
Malebogo Bakwena, Department of Economics, University of Botswana, Gaborone, Botswana
Article Tools
Follow on us
The paper examines determinants of export decisions and export intensity by manufacturing firms in Botswana, a developing country in Sub-Saharan Africa. Manufacturing, is one of several sectors through which the government seeks to pursue the all-important diversification of the economy. Botswana’s economy is heavily dependent on a diamond sector that in recent years has been declining, and is expected to decline further as diamond resources dwindle. Manufacturing is one of the sectors expected to play an important role in driving the expansion of the economic base. This paper contributes to the debate on policies to promote the growth of the sector. The paper examines factors likely to influence firms decisions to participate in global markets. Global markets provide a higher potential for firms to grow and make a meaningful impact in the economy. The paper applies Probit and Tobit models to firm level data to identify determinants of the decision to export and analyse export intensity respectively. The results of the Probit model show that firm age, firm size, human capital and access to finance increase rge likelihood of entering the export markets. On export intensity, results from the Tobit model show that firm size, human capital and firm location matter. The results suggest that economic gains can be expected from improving access and quality of education. Access to finance, and sea ports. Sector specific policies are also likely to benefit firms in textile and garments and chemicals.
Export Decision, Export Intensity, Manufacturing Firms
To cite this article
Kefilwe Sebolao, Lesego Sekwati, Malebogo Bakwena, Determinants of Export Decisions by Manufacturing Firms in Botswana, International Journal of Business and Economics Research. Vol. 8, No. 5, 2019, pp. 257-262. doi: 10.11648/j.ijber.20190805.12
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Aggrey, N, Eliab, L and Joseph, S. 2010. Firm size and technical efficiency in East African manufacturing firms, Current Research Journal of Economic Theory, (2), 2: 69-75.
Aitken, B., Hanson, G. H and Harrison, A. E. 1997, Spillovers, foreign investment, and export behavior, Journal of International Economics, (43): 103-132.
Amakom, U. 2012. Manufactured exports in sub-saharan African economies: econometric tests for the learning by exporting hypothesis, Ameriacan international journal of contemporary research, (2), 4: 195-206.
Arkes, H and Blumer, C. 1985. The Psychology of Sunk Cost. Organizational Behaviour and Human Decision Processes. (35): 124-140.
Baldwin, R. 1989. On the Growth Effects of 1992. NBER Working Paper #3119, National Bureau of Economic Research, Cambridge.
Bank of Botswana. 2016. Annual Report 2014, Bank of Botswaba, Gaborone, Botswana.
Bernard, A. B and Wagner, J. 2001. Export Entry and Exit by German Firms, Weltwirtschaftliches Archiv, 13 (1): 134–57.
Bhagwati, J and Panagariya, A. 1996. The Theory of Preferential Trade Agreements: Historical Evolution and Current Trends, American Economic Review, 86 (2): 82-87.
Botswana Investment and Trade Centre. 2014. Annual Report 2014. Botswana Investment and Trade Centre, Gaborone, Botswana.
Chawla, I. 2019. Determinants of firm’s Initial decision to Invest Abroad: An Application of “survival” Analysis to Manufacturing Firms in India, Emerging Markets Finance and Trade, 55: 562-583.
Clarke, G. 2005. Beyond Tariffs and Quotas: Why don’t African Manufactures Export, World Bank Policy Research Working Paper 3617, World Bank.
Farole, T. 2015. Special economic zones in Africa: comparing performance and learning from global experience, World Bank Group.
Greenaway, D., Guariglia, A and Kneller, R. 2007. Financial factors and exporting decision, University of Nottinghamn.
Greene, W. H. 2012. Econometric Analysis, New York University.
Grynberg, R. Sengwaketse, M and Motswapong, M. 2015. Botswana after Diamonds: A study into the Consequences and Responses to the Depletion of Botswana's Diamonds, Botswana Institute for Development Policy Analysis (BIDPA), Gaborone, Botswana.
Haddoud, M., Beynon, M., Jones, P. and Newbery, R. (2017), SMEs’Export Propensity in North Africa: A Fuzzy c-means Cluster Analysis, Journal of Small Business and Enterprise Development, 25 (5): 769-790.
Harris, R and Cher Li, Q. 2011. Export-market dynamics and firm-level Productivity: evidence for UK tradable sectors, Industrial and Corporate Change, (21), 3: 649-670.
Hill, H and Kalirajan, P (1993), Small enterprise and firm-level technical efficiency in the Indonesian garment industry, Applied Economics, 25, (9): 1137-1144.
Khandelwa, A and Teachout, M. 2016. IGC Policy Note: Special Economic Zones for Myanmar. Columbia University.
Kumarasamy, D and Singh, P. 2016. Does access to finance facilitates the firm's ability to export? Experience from Asia-Pacific countries. ARTNeT Working Paper Series, No. 159, Asia-Pacific Research and Training Network on Trade (ARTNeT), Bangkok.
Manez, J. A., Rochina, M. E and Sanchis, J. A. 2004. The decision to export: a panel data analysis for Spanish manufacturing, Applied Economics Letters, (11), 11: 669-673.
Melitz, M. J. 2003. The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity, Econometrica, (71), 6: 1695-1725.
Merino, F. and Salas, V. 2000. The relationship between firm-specific assets and intenationalisation in Spanish manufacturers, Documento de Trabajo de la Fundacio´n Empresa Publica P. I. E. 0001.
Moriyama, K. 2010. The spillover effects of the global crisis on economic activity in MENA emerging market countries – an analysis using the financial stress index, International Monetary Fund, Working paper # 10.
Nesterenko, A. 2003. The Determinants of Firms’ Export Behaviour. Unpublished Master of Arts degree Thesis, National University of Kyiv-Mohyla Academy, Ukraine.
Niringiye, A and Tuyiragize, R. 2010. Determinants of a Firm's Level of Exports: Evidence from Manufacturing Firms in Uganda, AERC Research Paper 196, African Economic Research Consortium, Nairobi.
Pakes, A. and Ericson, R. 1998. Empirical implications of alternative models of firm dynamics, Journal of Economic Theory, 79: 1–45.
Rankin, N., Soderbom, M and Teal, F. 2005. Exporting from manufacturing firms in Sub-Saharan Africa, GPRG-WPS-036, Global Poverty Research Group.
Sinani, E. & Bersant Hobdar. 2010. Export market participation with sunk costs and firm heterogenity. Applied Economics, (42), 25: 3195 – 3207.
Southern African Development Committee (SADC). 2008. Protocol on gender and development.
Srinivasan, T. N and Archana, V. 2011. Determinants of Export Decision of Firms, Economic and Political Weekly, (46), 7: 49-58.
Vijil, M., Wagner, L. and WoldeMichael, M. (2019), Import Uncertainty and Export Dynamics, Policy Research Working Paper # 8793, World Bank Group.
Wagner, J. 1995. Exports, firm size, and firm dynamics. Small Business Economics, (7), 1: 29–39.
World Bank. 2013. Botswana Social Protection Assessment, Human Development Department, Social Protection Unit, Africa Region.
World Bank. 2011. Enterprise Survey, Botswana. World Bank.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186