Clarke, George (2012): Manufacturing firms in Africa: Some stylized facts about wages and productivity.
Download (801kB) | Preview
Why have so few countries in Sub-Saharan Africa been successful in export-oriented manufacturing? This paper uses firm-level data from the World Bank’s Enterprise Surveys to discuss this. The paper shows that although firms in most African countries are relatively unproductive, they are more productive on average than firms in other countries at similar levels of development. Further, even though many Africans earn subsistence wages working for informal firms, formal firms have higher labor costs than firms in other low-income countries. The paper discusses several possible reasons for this including the effect of the poor institutional environment on profits and the effect of limited competition on productivity measurement.
|Item Type:||MPRA Paper|
|Original Title:||Manufacturing firms in Africa: Some stylized facts about wages and productivity|
|Keywords:||Africa, Zambia, Productivity, Manufacturing, Wages, East Asia|
|Subjects:||O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O25 - Industrial Policy
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||George R.G. Clarke|
|Date Deposited:||23. Jan 2012 17:00|
|Last Modified:||12. Feb 2013 19:29|
Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation." American Economic Review 91(5):1369–401.
Azfar, Omar, and Peter Murrell. 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values." Economic Development and Cultural Change 57(2):387–411. Available online at http://dx.doi.org/doi:10.1086/592840.
Biggs, Tyler, Vijaya Ramachandran, and Manju Kedia Shah. 1998. "The Determinants of Enterprise Growth in Sub-Saharan Africa: Evidence from the Regional Program on Enterprise Development." World Bank, Regional Program for Enterprise Development Discussion Paper 103., Washington, D.C.
Bigsten, Arne, Paul Collier, Stefan Dercon, Marcel Fafchamps, Bernard Gauthier, Jan Willem Gunning, Abena Oduro, Remco Oostedorp, Catherine Pattillo, Mans Soderbom, Francis Teal, and Albert Zeufeck. 2004. "Do African Manufacturing Firms Learn From Exporting." Journal of Development Studies 40(3):115–141.
Clarke, George R. G. 2009. "Beyond Tariffs and Quotas: Why Do African Manufacturers Not Export More?" Emerging Markets Finance and Trade 45(2):44–64.
--------. 2011a. "Firm Registration and Bribes: Evidence from an Microenterprise Survey." MRPA Paper 31857. Munich Personal RePEc Archive, Munich, Germany. Available on line at http://mpra.ub.uni-muenchen.de/31857/1/MPRA_paper_31857.pdf.
--------. 2011b. "How Petty Is Petty Corruption? Evidence From Firm Surveys in Africa." World Development 39(7):1122–1132.Available online at: http://dx.doi.org/doi:10.1016/j.worlddev.2010.11.002 .
--------. 2011c. "Lying about Firm Performance: Evidence from a Firm Survey in Nigeria." Texas A&M International University: Laredo, TX. Available on line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1971575. Processed.
Clarke, George R. G., Manju Kedia Shah, and Roland V. Pearson. 2010. "The Business Landscape for MSMEs and Large Enterprises in Zambia." World Bank: Washington DC.
Clausen, Bianca, Aart Kraay, and Peter Murrell. 2010. "Does Respondent Reticence Affect the Results of Corruption Surveys? Evidence from World Bank Enterprise Survey for Nigeria." Policy Research Working Paper 5415. World Bank, Washington DC. Available on line at http://go.worldbank.org/J10YIDC0A0.
Clerides, Sofronis K., Saul Lach, and James R. Tybout. 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence From Colombia, Mexico, and Morocco." Quarterly Journal of Economics 113(3):903–947.
Collier, Paul. 1998. "Globalization: Implications for Africa." In Zubair Iqbal and Moshin S Khan, eds., Trade Reform and Regional Integration in Africa. Washington DC: International Monetary Fund, pp. 147--181.
Conway, Patrick, and Manju Shah. 2010. "Who's Productive in Zambia's Private Sector." World Bank: Lusaka, Zambia.
de Mel, Suresh, David J. McKenzie, and Christopher Woodruff. 2009. "Measuring Microenterprise Profits: Must We Ask How the Sausage Is Made?" Journal of Development Economics 88(1):19–31.
Djankov, Simeon, Caroline Freund, and Cong Pham. 2010. "Trading on Time." Review of Economics and Statistics 92(1):166–173.
Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer. 2002. "The Regulation of Entry." Quarterly Journal of Economics 117(1):1–37.Available online at http://dx.doi.org/10.1162/003355302753399436.
Eifert, Benn, Alan Gelb, and Vijaya Ramachandran. 2005. "Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data." Regional Program on Enterprise Development 126., World Bank, Washington DC.
--------. 2008. "The Cost of Doing Business in Africa: Evidence From the World Bank's Investment Climate Surveys." World Development 36(9):1531–1546.
Escribano, Alvaro, and J. Luis Guasch. 2005. "Assessing the Impact of the Investment Climate on Productivity Using Firm-Level Data: Methodology and the Cases of Guatemala, Honduras and Nicaragua." Policy Research Working Paper 3621. World Bank, World Bank, Washington DC. Available on line at http://go.worldbank.org/F4W5VBGDR0.
Escribano, Alvaro, J. Luis Guasch, Manuel de Orte, and Jorge Pena. 2008. "Investment Climate Assessment Based on Demean Olley and Pakes Decompositions: Methodology and Applications to Turkey's Investment Climate Assessment." Universidad Carlos III de Madrid, Getafe, Spain.
Escribano, Alvaro, J. Luis Guasch, Jorge Pena, and Manuel de Orte. 2005. "Investment Climate Assessment on Productivity and Wages: Analysis Based on Firm Level Data from Selected South East Asian Countries." World Bank: Washington DC. Available on line at http://www.bnm.gov.my/microsites/rcicc/papers/s1.escribano.pdf. Processed.
Grenier, Louise, Andrew McKay, and Oliver Morrissey. 1999. "Exporting, Ownership, and Confidence in Tanzanian Enterprises." World Economy 22(7):995–1011.
Hardy, Melissa A. 1993. Regression With Dummy Variables. Newbury Park, CA: Sage Publishing.
Hicks, John R. 1935. "Annual Survey of Economic Theory: The Theory of Monopoly." Econometrica 31(1):1–20.
Iwanow, Tomasz, and Colin Kirkpatrick. 2010. "Trade Facilitation and Manufactured Exports: Is Africa Different?" World Development 37(6):1039–1050.
Langbein, Laura, and Stephen Knack. 2010. "The Worldwide Governance Indicators: Six, One, or None?" Journal of Development Studies 46(2):350–370.
Levinsohn, James. 2008. "Comments on Methodology Used by Escribano, Guasch, and Co-Authors in Analyzing World Bank Investment Climate Surveys." University of Michigan: Ann Arbor, MI. Processed.
Maloney, William F. 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence From Sectoral Transitions in Mexico." World Bank Economic Review 13(2):275–302.
--------. 2004. "Informality Revisited." World Development 32(7):1159–1174.
Pakes, Ariel. 2008. "Theory and Empirical Work on Imperfectly Competitive Markets." NBER Working Paper 14117., National Bureau of Economic Research, Cambridge MA. Available on line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1149363.
Pritchett, Lant. 2001. "Where Has All the Education Gone?" World Bank Economic Review 15(3):367–391.
Regional Program on Enterprise Development, Africa Private Sector Group. 2009. "An Assessment of the Investment Climate in Zambia." World Bank: Washington DC.
Sandefur, Justin, Francis Teal, Paolo Falco, Andrew Kerr, and Neal Rankin. 2010. "The Returns to Formality and Informality in Urban Africa." Center for the Study of African Economic 2010-03., Oxford University, Oxford UK.
Schneider, Friedrich. 2005. "Shadow Economies Around the World: What Do We Really Know?" European Journal of Political Economy 21(3):598–642.Available online at http://dx.doi.org/doi:10.1016/j.ejpoleco.2004.10.002 .
Schneider, Friedrich, and Robert Klinglmair. 2004. "Shadow Economies Around the World: What Do We Know?" Discussion Paper 1043. Institute for the Study of Labor (IZA), Bonn, Germany. Available on line at: ftp://repec.iza.org/RePEc/Discussionpaper/dp1043.pdf.
Soderbom, Mans, and Francis Teal. 2003. "Are Manufacturing Exports the Key to Economic Success in Africa?" Journal of African Economics 12(1):1–29.
Svensson, Jakob. 2005. "Eight Questions About Corruption." Journal of Economic Perspectives 19(3):19–42.Available online at http://dx.doi.org/DOI:10.1257/089533005774357860.
World Bank. 2003. Doing Business in 2004. Washington DC: World Bank. Available on line at http://www.doingbusiness.org/reports/global-reports/doing-business-2004.
--------. 2009a. Doing Business 2010. Washington DC: World Bank.
--------. 2009b. "Enterprise Survey (Productivity and Investment Climate Survey) in Zambia: Sample Survey Design." World Bank: Washington DC.
--------. 2010a. "Cape Verde: Initial Assessment of the Formal Labor Market." World Bank: Washington DC.
--------. 2010b. Doing Business 2011. Washington DC: World Bank.
--------. 2010c. World Development Indicators. Washington, D.C.: World Bank. Available on line at http://data.worldbank.org/data-catalog.
--------. 2010d. "Zambia Business Survey: The Profile and Productivity of Zambian Businesses." World Bank: Lusaka, Zambia.
--------. 2011a. Doing Business 2012: Doing Business in a More Transparent World. Washington DC: World Bank.
--------. 2011b. Light Manufacturing in Africa: Focused Policies to Enhance Private Investment and Create Productive Jobs. Washington DC: World Bank. Available on line at http://go.worldbank.org/ASG0J44350.
Yoshino, Yutaka. 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa." Policy Research Working Paper 4575., World Bank, Washington DC. Available on line at http://intranet.worldbank.org/servlet/main?pagePK=64161651&theSitePK=84798&piPK=64161652&menuPK=64166238&entityID=000158349_20080324134022.