 Thank you. Thank you for being here So the the presentation would be on desperate investments and firm export performance in Selective sub-Saharan African countries. So this is a joint paper with three quarters Two from the University of Barry and one from UNIDO so the outline of the presentation is Basically starting with the research questions basically specifying which type of questions we're trying to answer The motivation a summary of the contribution a description of the data sets Which is based on the Africa investor survey This is a survey that UNIDO has conducted conducted in several countries and In fact the project started when with the colleague we decided that We should exploit it a bit more the data set a bit more to try to Have some type of academic work done on the data sets The reason is basically usually this type of survey is not done with academia in mind But more for technical cooperation. So at UNIDO there are two big division One is research and statistics, but the other is really based on technical cooperation and those are the guys Who have been collecting this this data with other objectives in mind, but We've decided to try to to use it to do some academic work So I'll present the results and then the concluding remarks So what is the research question here? Basically, what we're trying to look at is to see whether diaspora firms are more likely to export than domestic firms So this is not a panel data set. So it's basically cross-section with all the implications and The related question is whether Which are the firm level characteristics that and that can explain this difference just to give a summary of the results? Yes, we find that diaspora firms are more likely to export than domestic ones and of course we find that they are less likely to export than foreign firms. So what you have in fact is a According if you divide the structure the ownership of the firm between domestic for diaspora and foreign you have a middle ground type of entrepreneurs That can also come into the picture if a country wants to increase its export. So I'll come back to to that later So what is the motivation for this paper? Let me start by a definition of diaspora for those who are not aware of it I remember a colleague asking me what was a diaspora and I was really surprised because for me it was Straightforward, I know what the diaspora is and I've grown up into this type of of environment with Just to say I'm from Burkina Faso and many of us usually go to into the neighboring countries or even outside So we know what what diaspora means But so just to make things clear The diasporas can be defined as groups of migrants origin residing and acting in us countries But maintaining strong sentimental and material links With their countries of origin their homeland To make it specific right now. I'm living in Austria. I'm from Burkina Faso. So basically I'm from the diaspora So you have a group of people simply living outside, but they still have strong ties with the country of origin so the number of African people residing abroad has been growing rapidly recently and Conservative estimates put is that around 30 million in 2010 and a feature of that is most of this African diaspora is located on the continent So they are not really going In Europe or in in America. They are staying on the continent The second aspect is They are contributing to their economies Mainly to remittances and this has been estimated to 40 billion in 2010 so four times what it was in in the 90s So it's a significant source of income for the continent so This highlights the fact that the diaspora is growing in number The second motivation for this paper can be that the diaspora is attracting attention first from the governments because there are many countries like Ethiopia Ghana Nigeria or Uganda Who are set up some government agencies or going through embassies to try to tap into the potential of the diaspora so in investing in assisting local communities or even sometimes in providing police advice to the government and This might be new maybe for African countries, but I remember reading about Malaysia for example was a program I think they are trying to move from the middle income category to the income category and one of the things they have put into place Policy measure is to attract the diaspora back into the country. So and they think they This might be an important addition to their desire to achieve the income level in the coming years The second thing is that the diaspora is also attracting attention from international organizations So you are for example the African diaspora program from the World Bank was launched in 27 so why is it that diaspora is attracting attention you have several Hypothesis regarding the pro-development effects of the diaspora the first one which is the one that is most often mentioned is That they contribute to financial flows to remittances to their own countries So this is the aspect that is highlighted the most Okay, I'm not talking about the brain drain which is the negative side here I'm just focusing on the pro-development effects But you also know that there are issues with With diaspora because migration can cause some brain drain for some countries here I'm looking at the positive effects as I said The second one is that the diaspora diaspora people can increase bilateral trade and investment flows between us and origin countries and Basically, they are as facilitators because for example You are in a given country you want to invest in another one. Let's say Ghana If there is a Ghanaian that can go with you you might have less issues with information asymmetries So this might be in one aspect or if you are a Ghanaian and you want to import Some goods for your local community in the in your own country You can easily do that because you have ties, you know people you don't have You have a lower Lower obstacles compared to somebody who doesn't know the country The third aspect is That the diaspora may use domestic firms access to technology and skills and I think the most cited examples are from India China Taiwan but less so in the case of Africa And finally which is the third aspect which is the one This paper is looking at the fact that the diaspora people can act as entrepreneurs in the country of origins and Regarding that existing research Is not large and the majority of current work is theoretical So what is the contribution of this paper? First to summarize again. We're looking at the fact We're trying to see whether diaspora firms differ from domestic and foreign firms in terms of export performance and try to shed some light on explanatory factors The contributions There are two contributions. The first one is simply that it looks at the impact of diaspora people as entrepreneurs in sub-Saharan Africa So which is think one of the interests of the data set was that it was focused on sub-Saharan African countries I'll give the list in a short while The second one is that it looks at the diaspora issue looking using firm level data, which is also a distancing aspect compared to to the existing papers So as I said The data the data is based on the UNIDO African investor survey 2010 from 19 sub-Saharan African countries You have the lease here in West Africa and also Eastern Central Africa I know that those colleagues are now working on collecting additional data in the same countries and One of the aspect we insisted on was to for them to establish a link with the previous survey So we have a panel structure in the data set. So I hope that will work out. I Know that they have been working for example in Niger in Uganda and Also additional countries like Congo Brazzaville so the questionnaire Was designed to collect information from business owners on finance investments investor characteristics perception so in total there were about 6,500 companies and around 700 derived variables. I think the One maybe of the criticism that you can address to the question is that it's really long Think it's around 30 pages and with very detailed informations that are asked. So It's really quite something for firms to sit down and put the required information but So you have I think around 200 Variables, but then you can expand it to around 700 variables So The question do that's what our firms perform better than domestic ones in terms of export propensity and intensity So the intensity is basically the export to sales ratio and Propensity is the likelihood to export How do we look at that? The first thing we did was to have to test it not parametrically Using The same approach as Delgado a l in 2002 so the basic idea is using stochastic dominance So if you consider F as the export intensity distribution of diaspora firms J as the one of domestic firm So you can talk about stochastic dominance of F relative to J if F minus J is inferior to zero for For all Z in R with strict legality for some The way to look at it here is basically That the likelihood of getting a Z a big Z that is Inferior or equal to the small Z with F is smaller So if you think of this Z as a price The likelihood of let's say $100 the likelihood of getting $100 dollars Something that is less than $100 is smaller with F than with J So you have greater chance of getting a greater price with F than with J and the way to test that Is basically true to to test The null hypothesis hypothesis is that F minus J equals zero and you have to reject it and the one Side a test is that F minus J is inferior or equal to zero and You shouldn't reject that so you reject the fact that The distribution are the same you don't reject the fact that F stochastically dominate J So basically if you perform that test You find that indeed the null hypothesis is Rejected in the first test and it's not in the second one. So The distribution of diaspora firms in terms of export intensity stochastically dominate the one of domestic firms Then we move to the parametric approach Which is basically the standard one So this was basically a type of robustness type of analysis, but for the second one the diaspora firm is simply dummy variables equals one for diaspora firm or zero else Just to be precise in the questionnaire in fact there was a question asking the respondents whether The investment Was coming from a diaspora member so this is simply a yes no question that we're using So if the answer is yes, it was coming from the diaspora then it's a diaspora firm Okay, then you also have a dummy variable for the foreign firm You have a set of control variables We also control for country and industry specific variables So the industry specific variables are basically the Isaac to digit classification giving which in that in which industry The firm is operating So looking at the export status the probate model You find that the coefficient of the diaspora Firm is basically positive So positive and see if you can't leave so here the bench the control group is the domestic firm and you also find that of Course and and this is an expected results that Foreign firms are more likely to export than domestic firm So you also have the import the significance of productivity The negative impact of those firms that are using domestic input which might be interpreted as Meaning that if you source your inputs locally you might have access to lower quality or lower variety for your inputs the other variable here, which is Significantly is female employment So I remember that we are discussing and It's also in the paper one argument is that Female employer employees are more reliable more flexible but the other thing might be that they are more they are simply cheaper and maybe luck With lower protection compared to their male counterparts So basically the firms are simply taking advantage of them trying to lower their production cost But we don't have Anything to discriminate between those two two way of looking at these results so looking at export intensity again as the share of exports to Total sales you see again The impact of being a firm from the diaspora and also the impact of being a multinational So why diaspora firms have a better export performance? Yeah, I'm simply looking at two two variables one is the labor productivity again using the Golmogorov-Smirnov test we reject the null hypothesis. We don't reject the second one so there's a difference between diaspora firms and domestic firms in terms of productivity and And the information advantage basically when you look at diaspora members that Declare that they are familiar with international trade agreement or regional trade agreement is usually higher than then those for the domestic firms, so The diaspora members might be in a better position to take advantage of those international or regional agreements To conclude So again our results suggest that diaspora firms have a higher probability of exporting and a higher share of exports in total sales than domestic firms This is basically a summary of what I've been presenting the present of diaspora investors and entrepreneurs in the countries of forage the economy can therefore contribute to the positively to the export performance of the country and basically What we're trying to do here is simply to give to some support to the choice of several African countries or international organization to devote Growing attention on how to tap into the potential of the diaspora. So Really the one of the objective we're trying to have with this paper is to have some policy contribution regarding how The government can take advantage of the diaspora in the in the process of development So thank you