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On the Evolution of the Firm Size Distribution in an African Economy

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  • Justin Sandefur

Abstract

The size of the informal sector is commonly associated with low per capita GDP and a poor business environment. Recent episodes of reform and growth in several African countries appear to contradict this pattern. From the mid 1980’s onward, Ghana underwent dramatic liberalization and achieved steady growth, yet average firm size in the manufacturing sector fell from 19 to just 9 employees between 1987 and 2003. I use a new panel of Ghanaian firms, spanning 17 years immediately post-reform, to model firm dynamics that differ markedly from well-established ‘stylized facts’ in the empirical literature from other regions. In contrast with American and European firms, entry of new firms and selection on observable characteristics, rather than within-firm growth, dominates industrial evolution in Ghana.

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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2010-05.

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Date of creation: 2010
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Handle: RePEc:csa:wpaper:2010-05

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  1. Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Growth success in Africa: firms become smaller
    by Economic Logician in Economic Logic on 2010-09-03 13:58:00
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Cited by:
  1. Tomoo Kikuchi & Kazuo Nishimura & John Stachurski, 2012. "Coase meets Tarski: New Insights from Coase's Theory of the Firm," KIER Working Papers 828, Kyoto University, Institute of Economic Research.
  2. Leonardo Iacovone, Vijaya Ramachandran, and Martin Schmidt, 2014. "Stunted Growth: Why Don't African Firms Create More Jobs?," Working Papers 353, Center for Global Development.
  3. Kolavalli, Shashi & Robinson, Elizabeth J. Z. & Diao, Xinshen & Alpuerto, Vida & Folledo, Renato & Slavova, Mira & Ngeleza, Guyslain K. & Asante, Felix Ankomah, 2012. "Economic transformation in Ghana: Where will the path lead?," IFPRI discussion papers 1161, International Food Policy Research Institute (IFPRI).
  4. repec:ldr:wpaper:92 is not listed on IDEAS
  5. Andrew Kerr & Martin Wittenberg & Jairo Arrow, 2013. "Job Creation and Destruction in South Africa," SALDRU Working Papers 092, Southern Africa Labour and Development Research Unit, University of Cape Town.
  6. Siba, Eyerusalem & Soderbom, Mans & Bigsten, Arne & Gebreeyesus, Mulu, 2012. "Enterprise Agglomeration, Output Prices, and Physical Productivity: Firm-Level Evidence from Ethiopia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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