Export Performance Under Imperfect Competition: Evidence from Manufacturing Firms in Cameroon

We investigate the effect of domestic market concentration on firm-level export. While the national-champion rationale actually rests on firmer theoretical ground, the empirical literature generally supports the positive effects of domestic rivalry. We employ a dataset of manufacturing Cameroonian firms from 2009 and 2016 and use the probit and Tobit II estimates. We find no direct relationship between concentration and exports. However, we test whether economies of scale (through size), technological constraint (ICT), and foreign participation (FDI) can influence this relationship. The results show that through the adoption of ICT, the internal rivalry effect is operational. In low industrial concentration (in more competitive market), the most digital firms improve their international market share. Robustness tests (2SLS and fractional probit) confirm these results. Government needs to direct their policies towards increased firm digitalization in order to improve their competitiveness in foreign markets. In order to enhance the positive effects of these policies, the policies should be directed towards the least concentrated industries.