 So, my name is Francis Mulango, I'm actually an agriculture economist at the African Center for Economic Transformation, but of course as an economist you become interested in just about anything. And so, this paper really, well, the center, first of all, we're a think tank based in Ghana and doing both research and policy advisory. And part of our research, we are preparing an index on where we're going to measure African countries by the extent to which they have transformed. We call it the transformation index, which will be out very soon. So as we were sort of, and one of the components of this index includes competitiveness in exports. And so as we were sort of developing it, I became a bit interested in export, sort of trying to understand why firm export and some of what are the drivers of export. And so I came across this, I guess, issue, I guess, indaginate issues where on one hand some literature says that investment causes exports, right, or and some says, you know, it's actually firms who have access to export who actually would invest. So sort of the, and of course, you know, there's these literatures that sort of courted them very high level papers. And in a sense what you have, you have your typical chicken and the egg problem that you have in just about any economics problem. But of course, living in a world or in the continent where we really need practical policy advice to gain further insight, you really need to, you know, really look beyond this chicken and the egg issue between investment and export and sort of look at the factors, in fact, that influence the relationship between exports and investment. So some of the work that went beyond this is Brambilla, Lenderman, and Porto who in fact said that it's actually, exporting per se is not what matters. It's actually the destination of export. In a sense, if a African country or a developing country has to export to a rather more sophisticated market, the U.S., for example, then the firm will make the investment in issues, products such as skills, right, because you need the skill to be able to produce the product that would require, that is required in higher level market. And of course then there's also people who argue that, well, it's also, you know, of course as you get exposed to these more sophisticated market then you make investment in, maybe you tend to import some of the inputs or maybe you tend to import, to invest in actually the skills for, for export and, but more, you know, to sort of bring, bring these different aspects of investment and exports together, Love and Roper argued that, so you have two elements. You have, on one hand, what they call internal enablers and on the other end you have external enablers. So external enablers include, you know, all the policies or infrastructures put together by sort of the public office, you know, exporting zones, special industrial parks. These are some of the sort of what you, you know, what we call these conducive environment policies that will lead, you know, at least provide the avenue for firms to actually export or to, to, to, to export. But what's actually most important are the internal enablers, which as the previous speaker talked about the skills of the management, because you can put out all the policies you want out there. As he said, the training is there, the knowledge is there, but if you have management who are not well skilled enough to know how to use the knowledge and make, turn it into profitable, into profit, really, there's really, these external enablers may not have any impact. Okay. And of course, you know, of course there's no evidence of, not at least strong evidence of the role of these internal enablers as it relates to sort of pushing firms to export, at least in Africa. So this is what, this is what leads to this research topic. Sort of the research question obviously is to look at, you know, to address the research gap that I just introduced and to, to estimate the impact of exports on firms investment and evaluate the role of firm management skill in determining the impact of exports on an, on investment. Okay. So, but of course, I'm looking at a particular in Ghana and, and I'm using Ghana's eligibility to Agua, which I will explain later as a way to instrument for export or access or trade liberalization or access to a more sophisticated market as I early introduced. So just a bit about a really quick illustration of the manufacturing sector in Ghana, because this is the example that I will use in this, in this paper. The manufacturing sector sort of accounts about 10% of the GDP in Ghana, very, very small. And this is in effect what we expect for typical African country. And in regards to the distribution of the manufacturing sector, you have sectors such as wood processing, which is really your typical, you know, anything but that from the timbering or to the typical furniture making, this very, very light manufacturing here. And of course, you have the, as he has been the case to many African countries, textile. This, I mean, this, I'm talking about, this is back in the 1990s here, because these are the data that I will use for this analysis. And of course, then you have other industries, food processing, drinks and so on and so forth. And the instrument that I will use to capture export is Agua. This is, this was an initiative introduced by the US in 2000 to allow African countries to export their goods, you know, pretty much quota-free and duty, duty and quota-free to the US. And of course, a few countries were selected in 2000. And Ghana was among one of them. And of course today, so today, there's about 40 countries that in effect have the opportunity to export the goods to the US, in a sense, quota-free. And it's on until 2015. At least this is its current expiration date. But then when Agua came in, of course, in 2000, it was in a sense unexpected, because this is something that, in a sense, Africa has never, had never seen before. These sort of sudden access to this market at pretty much no fees or no tariff to pay. So in a sense, it was what I would call here a shock, a random event here. And the data that I'm using here, this is a very popular data. The regional project and enterprise development data, which really captures manufacturing firms in Ghana between 1991 and 2002. Very, very solid data, looking at about 200 and plus firm, serve about 200 and plus firms and about a thousand or so employees within those firms over that period of time. And it really looked at the major cities, namely, of course, you have the capital city here, Akra, Kumasi, this is the commercial capital. And Takrade is also a major sort of manufacturing city. So it's really targeted the main cities to survey all the firms. This is just to show the extent to which the firm, I mean, the survey is represent, it's nationally representative. So you have firms such as, this is sort of the data from the data and this is sort of the national representation. So, you know, wood processing is among the big ones here when you add this furniture here, furniture making. So these are sort of the sectors as illustrated by the data. So these are the names that they gave them and this is the names given by the sort of the authority in Ghana. So you have wood processing and you have, of course, the textile are among the top one, you know, sort of, you know, you have a clear representation from the data to, you know, the national sort of data here. So which tells us a bit about the robustness of the data that we're looking at here. And so what did that do? So again, the objective is to look at the impact of exports on investment. So I use a typical difference in differences. So looking at exports, I mean, looking at investment before and after 2000. And of course, since I'm not using, I'm using non-random data here, I had to use some matching analysis here in order to reduce some of the biases. Okay. And also, yeah, one caveat. The data that I'm using does not say exporting, firm exporting to the US. It just says exporting in Africa, exporting outside of Africa. So there is a bit of, there might be some issues here of identification, which I will explain how it has been reduced here, at least minimized. Just a better explanation of my identification. Again, using a difference in difference analysis, looking at the outcome here, I will explain also shortly here. So pretty much investment in two items. One investment in plant and equipment. And the other one is investment in accumulation of skill workers. So two types of investments here. I will run two different analysis. And of course, I'm looking at, so like I said, Agoa came in 2000. Okay. So the data runs from 1991 to 2002. So I'm looking at before 2000. Okay. Looking at the average before 2000 and comparing it 2000, 2001 and 2002. So in a sense, my treatment variable is a rather dynamic one. In order to capture firms that started to export after Agoa came in or stopped to export after Agoa came in. Okay. So this is just to illustrate a bit of the model specification. So now I mentioned here that the data doesn't tell me whether a firm exports to the US or not. It just tells me whether a firm exports outside of Africa or not. Okay. So now this is just to justify a bit of that, just my identification maybe less biased as one might think at first site. So when we look at the share of Ghana's exports, Ghana exports, Ghana manufacturing exports to the US over the share of just total exports of Ghana, we can see that between 2004 and 2000 and 2004, in a sense, the year after Agoa and four years before, you can see that before, after Agoa, the share was about 17%. But before, it was about 7%. So in a sense, after Agoa, we can see that the share of Ghana manufacturing exports to the US rapidly grew. Okay. But more specifically, when you look at also between 2000 and 2004, Ghana manufacturing exports to the US was about 25% of total Ghana manufacturing exports. While before that, it was about 10%. Okay. And then lastly, Ghana manufacturing exports outside of Africa. When you look at Ghana manufacturing exports outside of Africa, after 2000 and between 2000 and 2004, it grew by about 34%. But then when you remove sort of the exports to the US, it actually reduced or grew by minus 43%. So again, the growth that we saw in Ghana manufacturing between 2000 and 2004, the year after Agoa can be, in fact, identified to Agoa here. Okay. Of course, the typical issue is that the decision that our treatment variable here, which is exporting outside of Africa, can be biased here. So in a sense, a firm may decide to export for other reasons. So we control for that potential biased here. So in a sense, we use it, one of those typical two-stage least square fixed effect model to control for some of that. And so the first stage, in a sense, just looked at the determinant of exporting outside of Africa. And some of the strong ones are just your real outputs, the value of your real output. And of course, your costs. And one good one is also the number of skilled worker, right? Which is what, in a sense, anticipate as far as the determinant of exporting in outside of Africa, which I quote as more sophisticated markets here. And so now, so here are some of the main results. So the first one here, so all it did is simply looked at the impact of exports on firms' investments in plants and equipment. Okay. So like I said, this is the average data. So sorry if it's a bit fuzzy here. What we see is an interesting scenario here. So this is in 2000, 2001, and 2002. So I looked at the three years after Agoa, 2000, 2001, 2002. What we see in the first two years is disinvestment. So after Agoa firms disinvest in their plants and equipment, but then in the third year, then they start investing, which tells me something about, so they wanted to get rid of maybe all technologies and then to have enough money to invest in new technologies. Okay. So this is looking at just the aggregate data. Then when you break it down into by firm intensity, so light, medium, and heavy manufacturing, of course, you see the same trend here with lack manufacturing. Whereas the first two years, there's a disinvestment. And then, of course, the second year, there is investment for, well, it's issue here. But what it is is, in fact, it's insignificant here, or at least it's significant only with the third year. So, and then, of course, for heavy manufacturing, for heavy manufacturing, there is nothing. So in a sense, the investment that we see, yes, you have a question? Just the investment spending on the investment. Say it again, please. Are you looking at the investment, the total spending? I'm looking at the interest, the value of investment, the real value of the investments. Say it again, please. It's real. It's in real term. Yes. Yes. Okay. So what we're seeing here, as far as the impact of export on investment on equipment and plants are, in fact, driven by light manufacturing. Okay. But then when we look at, now we look at the impact of still this export, but now we're looking at the accumulation of skilled workers. Right? On average, we see the impact starting to kick in after, from 2001 and 2002. Okay? But for the case of light manufacturing, there is nothing. For the case of medium manufacturing, we see something in 2001. But of course, for the case of heavy manufacturing, there is a heavy investment in it. So in a sense, what, in terms of the impact of export on, on accumulation of skilled worker on an aggregate, it's mostly driven by heavy manufacturing firm. Okay? So now, the main question is what is firm management has to do with this? Because this is, again, the main question here. So what I did is I broken down these impacts because these, these ones are impact. I broken them down by firm sectors and by firm size. Okay? So then I run a few nonparametric regressions here to look at how the impact, okay? So the first one is just looking at how this impact of export on firm investment in on plants and equipment correlates with two elements here. Education of management and the job tenure or how long the manager has been in the company. Okay? So we see at least a upward trend here. This, the first one is with education. In other words, education is sort of, there's a positive correlation with education of top management and the impact of trade of or exports on investment on equipment and plant. But for the case of job tenure, it's a bit downward. In a sense, firm managers who has been around for a long time tend to be a bit conservative. Okay? But for the case of the impact of exports on skill accumulation, we don't really see a, a trend here to really bring in any, any, any viable conclusion here. All we can say is that for the case of firm manager who have about 20 years or so of education, you have a, just a big bump. But other than that really, there's really no trend here to really tell a story here. Okay? Just to bring the message home. So the impact of export on firm skill worker accumulation and firm real investment in planting equipment is positive. However, this, of course, this impact varies by manufacturing intensity such as that investment in planting equipment were mostly made by firms in light manufacturing. Whereas the accumulation of skill worker was made by firms both in both medium and heavy manufacturing. So then while level of management education is positively correlated with impact of trade and plant, on plant and machinery investment, tenure tends to be a bit negatively correlated. Okay? Just a quickly, just in terms of really policy recommendation from this exercise, Ghana has implemented a lot of policies in regards to sort of a promoting trade. One of them is the EDA fund. The fund to provide sort of interest free or low interest loans to firms to exporting firms. But an interesting one is what we call, they call the Export Development Center. No, no, the Ghana Industrial Skill Development Center. This is, this policy there, this institution there to enhance the skills of workers. So in a sense to address these issues with sort of the internal enablers. It's not yet, so it's there. Sorry. And so in a sense regarding setting it up, you know, the way it works is the government selected a small number of its technical polytechnic schools and institutes and sort of took them out of the regular educational system and sort of engaged them with the industry. So it's located in one of the major industrial sector in Ghana and mostly geared toward the textile industry. So a similar model can be replicated in other African countries in order to sort of help and sort of this internal enablers such as firm management skills and so on and so forth. And so what is the impact of this? We don't know yet. It's a new policy and maybe a research topic for some of you. Thank you.