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Productivity premia and firm heterogeneity in Eastern Africa

Author

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  • Demena, B.A.
  • Msami, J.
  • Mmari, D.E.
  • van Bergeijk, P.A.G.

Abstract

Productivity development is a key issue for export-driven growth and development. We use East African Community (EAC) firm-level data. Instead of focusing on single EAC partners, using the World Bank Enterprise Surveys, investigate firm-level productivity difference for seven countries that are part of the COMESA-EAC-SADC tripartite free trade area (TFTA). Using export and ownership dimensions, we identify four types of firms: National Domestic, National Exporters, Foreign Domestic and Foreign Exporters. We find a clear export productivity premium for national manufacturing firms and service sectors, but not for foreign owned firms. We also find clear foreign-ownership productivity premium for both domestic and exporting firms in manufacturing sectors but less clear in services sectors. The gap between national export premium and foreign-ownership premium is stronger in manufacturing firms as opposed to service sectors. Moreover, we find clear and strong productivity premia in size, training programmes and level of development in the manufacturing firms. In the services sector, these premia are always smaller and only significant for medium-sized firms. There is no difference in experience premium between sectors in terms of both significance and magnitude of the estimated coefficients.

Suggested Citation

  • Demena, B.A. & Msami, J. & Mmari, D.E. & van Bergeijk, P.A.G., 2021. "Productivity premia and firm heterogeneity in Eastern Africa," ISS Working Papers - General Series 680, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    • Handle: RePEc:ems:euriss:135504
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    Cited by:

    1. Demena, B.A., 2021. "Effectiveness of export promotion programmes," ISS Working Papers - General Series 688, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.

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    More about this item

    Keywords

    Productivity; exports; firm heterogeneity; FDI; sub-Saharan Africa; EAC.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D20 - Microeconomics - - Production and Organizations - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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