Trade Policy and Productivity Growth: Why Do Sudanese Manufacturing Firms Export Less

Abstract This paper aims to study the role of trade policy on industrial development and productivity growth. We analyze the relationship between trade policy and productivity growth of manufacturing firms in Sudan. For this work, we evaluate the previous trade policy instruments that implemented between 2000 and 2015. The study finds that Sudan trade policy has significant positive effects on manufacturing firms’ productivity. The study finds also reveals that manufacturing firms offer the largest scope for productivity gains through trade policies aiming at enhancing economic growth. The study also found there was a weak support for investment promotion and tariff protection. This study recommends that building a proper trade policy to support manufacturing firms to adapt new technologies and focusing on labor intensive industries is the key success to sustain productivity and exports.