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Which Firms Die? A Look at Manufacturing Firm Exit in Ghana

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  • Frazer, Garth

Abstract

In the context of Africa, which firms are driven out of business? Given that many markets do not function efficiently in Africa, the determinants of firm exit may not be the same fundamentals that force business closure elsewhere. In particular, less productive firms may not be the ones forced out of business. This article examines the determinants of manufacturing firm exit in the context of Ghana, with particular attention paid to productivity (or lack thereof) as a potential determinant of exit. Three different methods are used to measure productivity, two of which carefully handle the issue of simultaneity in production function estimation. In addition, other determinants of firm exit are examined and compared to previous results in the literature.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2005)
Issue (Month): 3 (April)
Pages: 585-617

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Handle: RePEc:ucp:ecdecc:y:2005:v:53:i:3:p:585-617

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Web page: http://www.journals.uchicago.edu/EDCC/

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Cited by:
  1. Waldkirch, Andreas & Ofosu, Andra, 2008. "Foreign Presence, Spillovers, and Productivity: Evidence from Ghana," MPRA Paper 8577, University Library of Munich, Germany.
  2. Shiferaw, A., 2006. "Entry, survival, and growth of manufacturing firms in Ethiopia," ISS Working Papers - General Series, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague 19185, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  3. Owoo, Nkechi S. & Naudé, Wim, 2014. "Non-Farm Enterprise Productivity and Spatial Autocorrelation in Rural Africa: Evidence from Ethiopia and Nigeria," IZA Discussion Papers 8295, Institute for the Study of Labor (IZA).
  4. Admasu Shiferaw & Arjun Bedi, 2010. "The Dynamics of Job Creation and Job Destruction: Is Sub-Saharan Africa Different?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 22, Courant Research Centre PEG.
  5. Paul Robson & Helen Haugh & Bernard Obeng, 2009. "Entrepreneurship and innovation in Ghana: enterprising Africa," Small Business Economics, Springer, Springer, vol. 32(3), pages 331-350, March.
  6. Klapper, Leora & Richmond, Christine & Tran, Trang, 2013. "Civil conflict and firm performance : evidence from Cote d'Ivoire," Policy Research Working Paper Series 6640, The World Bank.
  7. Klapper, Leora & Richmond, Christine, 2011. "Patterns of business creation, survival and growth : evidence from Africa," Policy Research Working Paper Series 5828, The World Bank.
  8. Anjali Kumar & Manuela Francisco, 2005. "Enterprise Size, Financing Patterns, and Credit Constraints in Brazil : Analysis of Data from the Investment Climate Assessment Survey," World Bank Publications, The World Bank, number 7330, August.
  9. Pierre Blanchard & Jean-Pierre Huiban & Claude Mathieu, 2012. "The determinants of firm exit in the French food industries," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, INRA Department of Economics, vol. 93(2), pages 193-212.
  10. Alhassan Iddrisu & Yukichi Mano & Tetsushi Sonobe, 2012. "Entrepreneurial Skills and Industrial Development: The Case of a Car Repair and Metalworking Cluster in Ghana," Journal of the Knowledge Economy, Springer, Springer, vol. 3(3), pages 302-326, September.
  11. Shiferaw, Admasu, 2009. "Survival of Private Sector Manufacturing Establishments in Africa: The Role of Productivity and Ownership," World Development, Elsevier, Elsevier, vol. 37(3), pages 572-584, March.
  12. Calá, Carla Daniela & Manjón Antolín, Miguel C. & Arauzo Carod, Josep Maria, 2014. "The Determinants of Exit in Argentina: Core and Peripheral Regions," Working Papers 2072/225299, Universitat Rovira i Virgili, Department of Economics.
  13. Blanchard, Pierre & Huiban, Jean-Pierre & Mathieu, Claude, 2011. "Productivity, sunk costs and firm exit in the French food industry," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 114526, European Association of Agricultural Economists.
  14. Szirmai, Adam & Van Dijk, Michiel, 2007. "The Micro-Dynamics of Catch Up in Indonesian Paper Manufacturing: An International Comparison of Plant-Level Performance," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  15. Siba, Eyerusalem & Soderbom, Mans & Bigsten, Arne & Gebreeyesus, Mulu, 2012. "Enterprise Agglomeration, Output Prices, and Physical Productivity: Firm-Level Evidence from Ethiopia," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  16. Mary Hallward-Driemeier & Bob Rijkers, 2013. "Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1788-1810, December.

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