The relation between exports and productivity is analysed for the case of Morocco using annual panel data for the years 1985–1995 covering six large urban areas and 18 manufacturing sectors. In the empirical analysis two main features are distinguished, i.e. productivity differentials and export externalities. The former is the most dominant one for Morocco, i.e. sectors with low labour productivity export most and within‐sectors exporting firms are more productive than nonexporting firms. Regarding the latter, only weakly significant evidence is found of both sector wide or within sector productivity externalities as a result of exporting.