Using the World Bank Enterprise Surveys data for Ethiopia (2006 and 2011) and Kenya (2007 and 2013), this study empirically investigates the significance of exports and foreign ownership in influencing firm-level efficiency. We estimate a standard Cobb-Douglas production function using Stochastic Frontier Analysis. In addition to the two variables of interest, we control for firm characteristics, including firm size, type of industry, innovation activity, and employees’ characteristics in our efficiency analysis. The results of the study show that, in both Ethiopia and Kenya, exporting helps firms lower technical inefficiency, whereas higher share of foreign ownership has the expected sign but not statistically significant. The results also confirm that, in both countries, smaller firms and firms that employ temporary workers for a longer periods of time tend to be less efficient. For Kenyan firms, experience of managers of a firm helps to lower technical inefficiency, however, innovation activities within a firm tends to raise inefficiency; whereas for the case of Ethiopian firms experience of managers lowers efficiency, albeit weakly, and innovation activities do not appear to affect firm efficiency. Our robustness analysis on the nexus between exporting and productivity confirms that one-size-fits-all causal relationship is not valid. We conclude that policy-makers in Ethiopia and Kenya should look into these key variables in designing appropriate policy to improve firm efficiency in their endeavor for industrialization.