Advanced Search
MyIDEAS: Login to save this article or follow this journal

Firm Heterogeneity and Market Selection in Sub-Saharan Africa: Does It Spur Industrial Progress?

Contents:

Author Info

  • Shiferaw, Admasu

Abstract

This article investigates the processes of market selection and industry dynamics in a sub-Saharan Africa context. Using census-based longitudinal data, it examines the distribution of productivity within an industry to determine whether patterns of firm entry, exit, and survival are driven by underlying efficiency differences. It also estimates the contributions to industry-level productivity growth of producer turnover and the reallocation of resources from less efficient producers to more efficient ones. The article shows that markets in sub-Saharan Africa, as represented by Ethiopia, are at least as strong as those in other regions in selecting efficient firms. Tolerance of inefficient firms also declines with the degree of exposure to international competition. While reallocation of resources played a positive and significant role for industry-level productivity growth, it only managed to offset the declining trend in intrafirm productivity. The article concludes that although markets have played the expected disciplinary role, long-term industrial growth requires more than functional markets, particularly in addressing firm-level innovation.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

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

Volume (Year): 55 (2007)
Issue (Month): 2 (January)
Pages: 393-423

as in new window
Handle: RePEc:ucp:ecdecc:y:2007:v:55:i:2:p:393-423

Contact details of provider:
Web page: http://www.journals.uchicago.edu/EDCC/

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, Elsevier, vol. 39(1-2), pages 53-78, August.
  2. Jovanovic, B. & MacDonald, G.M., 1991. "Competitive Diffusion," Papers, Rochester, Business - Financial Research and Policy Studies 92-08, Rochester, Business - Financial Research and Policy Studies.
  3. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(3), pages 569-594, September.
  4. James Tybout, 1998. "Manufacturing Firms In Developing Countries: How Well Do They Do, And Why?," Development and Comp Systems 9805004, EconWPA.
  5. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  6. Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, Elsevier, vol. 36(1-2), pages 53-73, February.
  7. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, Econometric Society, vol. 60(5), pages 1127-50, September.
  8. Farhad Noorbakhsh & Alberto Paloni, 1998. "Structural adjustment programmes and export supply response," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(4), pages 555-573.
  9. Dixit, A., 1988. "Entry And Exit Decisions Under Uncertainty," Papers, Princeton, Department of Economics - Financial Research Center 91, Princeton, Department of Economics - Financial Research Center.
  10. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
  11. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
  12. Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc.
  13. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, StataCorp LP, vol. 4(2), pages 113-123, June.
  14. Tybout, James R, 1992. "Linking Trade and Productivity: New Research Directions," World Bank Economic Review, World Bank Group, World Bank Group, vol. 6(2), pages 189-211, May.
  15. Nelson, Richard R, 1981. "Research on Productivity Growth and Productivity Differences: Dead Ends and New Departures," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 19(3), pages 1029-64, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Admasu Shiferaw, 2009. "Which Firms Invest Less Under Uncertainty? Evidence from Ethiopian Manufacturing," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 2, Courant Research Centre PEG, revised 30 Jun 2013.
  2. Shiferaw, A., 2006. "Capital adjustment patterns and uncertainty in African manufacturing," ISS Working Papers - General Series, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague 435, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  3. Shiferaw, Admasu & Bedi, Arjun S., 2010. "The Dynamics of Job Creation and Job Destruction: Is Sub-Saharan Africa Different?," Proceedings of the German Development Economics Conference, Hannover 2010 59, Verein für Socialpolitik, Research Committee Development Economics.
  4. 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.
  5. Haile, Getinet Astatike & Srour, Ilina & Vivarelli, Marco, 2013. "The Impact of Globalization and Technology Transfer on Manufacturing Employment and Skills in Ethiopia," IZA Discussion Papers 7820, Institute for the Study of Labor (IZA).
  6. 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.
  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. Fukunishi, Takahiro, 2013. "Political crisis and suspension of duty-free access in Madagascar : assessment of impacts on the garment industry," IDE Discussion Papers, Institute of Developing Economies, Japan External Trade Organization(JETRO) 422, Institute of Developing Economies, Japan External Trade Organization(JETRO).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:y:2007:v:55:i:2:p:393-423. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.