Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis
AbstractFirm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specifications. There are controls for firm fixed effects. It is shown that the profit effect is very similar for both the accelerator and Euler equation specifications. A comparison with other studies shows that, for small firms, the effect is much smaller in Africa than for other countries. Reasons for the relative insensitivity of investment to profits in African firms are suggested. For the most general specification tested there are no significant differences in the size of the profit effect across the four countries in the study. Copyright 1999 by Blackwell Publishing Ltd
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Bibliographic InfoArticle provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.
Volume (Year): 61 (1999)
Issue (Month): 4 (November)
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- Arne Bigsten & Paul Collier & Stefan Dercon & Bernard Gauthier & Jan Willem Gunning & Anders Isaksson & Abena Oduro & Remco Oostendorp & Cathy Pattillo & Måns Söderbom & M. Sylvain & Francis Teal & , 1997. "Investment in Africa's manufacturing sector: A four country panel data analysis," CSAE Working Paper Series 1997-11, Centre for the Study of African Economies, University of Oxford.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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