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Firm Size, Employment and Value-added in African Manufacturing Firms: Why Ghana needs its 1 per cent

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  • Francis Teal

Abstract

In this paper three censuses of manufacturing firms in Ghana for 1962, 1987 and 2003 are used to investigate changes in the firm size distribution and changes in the employment and value-added share across that distribution. It is shown that the censuses for 1987 and 2003 excluded self-employed enterprises with employees which were a rapidly growing part of the industrial structure over the period 1987 to 2003. Using a wider definition of firm, which includes those enterprises, there has been a substantial shift in employment to small firms where productivity is low. Using the wider definition of a firm in 2003 the top 1 per cent of firms produced 63 per cent of value-added. If the narrow definition of firm used in the manufacturing census is applied than the top 1 per cent of firms in 2003 were producing 72 per cent of value-added. These findings are related to the view there is a ‘missing-middle’ in the firm size distribution in Africa.

Suggested Citation

  • Francis Teal, 2016. "Firm Size, Employment and Value-added in African Manufacturing Firms: Why Ghana needs its 1 per cent," CSAE Working Paper Series 2016-07, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2016-07
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    Citations

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    Cited by:

    1. Andam, Kwaw S. & Asante, Seth, 2018. "Firm employment, exit, and growth in the food processing sector: Evidence from Ghana," IFPRI discussion papers 1755, International Food Policy Research Institute (IFPRI).
    2. Andrew Kerr & Bruce McDougall, 2020. "What is a firm census in a developing country? An answer from Ghana," SALDRU Working Papers 262, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Somdeep Chatterjee, 2016. "The role of the firm in worker wage dispersion: an analysis of the Ghanaian manufacturing sector," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-16, December.
    4. Kahsay Gerezihar Tsaedu & Zhihong Chen, 2021. "The Dynamics of Firm Growth in Sub-Saharan Africa: Evidence from Ethiopian Manufacturing Sector 1996–2017," Journal of Industry, Competition and Trade, Springer, vol. 21(3), pages 367-392, September.

    More about this item

    Keywords

    African manufacturing firms; missing-middle; census data;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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