Moreover, given that the output contraction is typically associated with a fall in total productivity,
this would further compound the task of penetrating foreign markets.
There are grounds to suspect therefore that the adjustment process could aggravate the
dualism between large exporters and relatively small firms that cater mainly to the domestic
markets and are unable (or unwilling) to shift toward foreign markets. The fact that even at the
firm level it was difficult to discern a significant shift toward foreign markets supports such
concern. For Gabon, all export growth was associated with incumbent firms, with a previous
export tradition. The CFA devaluation failed to generate much entry into foreign markets by new
exporters, at least in the short time span analyzed in this study. Public policies should be
designed to identify and correct those factors that prevent the growth of small firms toward a
more adequate size and that discourage them from turning toward the export markets.
Institutional rigidities in the credit and the labor market as well as deficiencies in infrastructures
and regulatory constraints are all potential culprits in this respect and may become the
objectives for further structural reforms.
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