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Got Technology? The Impact of Computers and Cell-phones on Productivity in a Difficult Business Climate: Evidence from Firms with Female Owners in Kenya

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  • Nidhiya Menon

    (Department of Economics, Brandeis University)

Abstract

Firms in Kenya rely on technologies such as computers, cell-phones, and generators to overcome constraints associated with regulations, infrastructure, security, workforce, corruption, and finance. This study shows that such reliance has significant positive impacts on productivity as measured by value-added per worker, especially for firms with female principal owners. The exogenous component of technology ownership is isolated by using information on the regional presence of missionary schools from Kenya’s colonial past, as well as geographical indicators such as rainfall, changes in forest cover, and average regional elevation. Results indicate that for firms with female owners, technology adoption improves value-added per worker by about 49 percentage points. It is also statistically evident that for such firms, the ownership of technologies such as computers, cell-phones, and generators succeeds in mitigating the costs of business obstacles. For male-owned firms, such patterns are absent.

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File URL: http://www.brandeis.edu/departments/economics/RePEc/brd/doc/Brandeis_WP21.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by Brandeis University, Department of Economics and International Businesss School in its series Working Papers with number 21.

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Length: 40 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:brd:wpaper:21

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Postal: MS032, P.O. Box 9110, Waltham, MA 02454-9110
Web page: http://www.brandeis.edu/departments/economics/
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Keywords: Technology; Computers; Cell-phones; Business Obstacles; Kenya; Firms; Female Owners;

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  1. Vishwasrao, Sharmila & Bosshardt, William, 2001. "Foreign ownership and technology adoption: evidence from Indian firms," Journal of Development Economics, Elsevier, vol. 65(2), pages 367-387, August.
  2. Stoneman, Paul & Kwon, Myung Joong, 1996. "Technology Adoption and Firm Profitability," Economic Journal, Royal Economic Society, vol. 106(437), pages 952-62, July.
  3. Ethan Lewis, 2011. "Immigration, Skill Mix, and Capital Skill Complementarity," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 1029-1069.
  4. Alberto Alesina & Joseph Zeira, 2006. "Technology and Labor Regulations," NBER Working Papers 12581, National Bureau of Economic Research, Inc.
  5. Albert G. Z. Hu & Gary H. Jefferson & Qian Jinchang, 2005. "R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 780-786, November.
  6. Stefano Scarpetta & Thierry Tressel, 2002. "Productivity and Convergence in a Panel of OECD Industries: Do Regulations and Institutions Matter?," OECD Economics Department Working Papers 342, OECD Publishing.
  7. Amin, Mohammad, 2007. "Are labor regulations driving computer usage in India's retail stores ?," Policy Research Working Paper Series 4274, The World Bank.
  8. Goedhuys, Micheline & Janz, Norbert & Mohnen, Pierre, 2006. "What drives productivity in Tanzanian manufacturing firms: technology or institutions?," MERIT Working Papers 037, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  9. Almeida, Rita & Carneiro, Pedro, 2008. "Enforcement of labor regulation and firm size," Social Protection Discussion Papers 43675, The World Bank.
  10. Sanyal, Paroma & Menon, Nidhiya, 2005. "Labor Disputes and the Economics of Firm Geography: A Study of Domestic Investment in India," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 825-54, July.
  11. Micheline Goedhuys & Norbert Janz & Pierre Mohnen, 2008. "What drives productivity in Tanzanian manufacturing firms: technology or business environment?," European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 199-218.
  12. Lall, Somik V. & Mengistae, Taye, 2005. "The impact of business environment and economic geography on plant-level productivity : an analysis of Indian industry," Policy Research Working Paper Series 3664, The World Bank.
  13. Torfinn Harding & Jørn Rattsø, 2005. "The barrier model of productivity growth: South Africa," Discussion Papers 425, Research Department of Statistics Norway.
  14. Nidhiya Menon, 2010. "Obstacles to Business, Technology Use, and Firms with Female Principal Owners in Kenya," Working Papers 20, Brandeis University, Department of Economics and International Businesss School.
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