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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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  • Menon, Nidhiya

    ()
    (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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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5419.

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Length: 43 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5419

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Keywords: technology; computers; cell-phones; business obstacles; Kenya; firms; female owners;

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  1. Almeida, Rita & Carneiro, Pedro, 2008. "Enforcement of labor regulation and firm size," Social Protection Discussion Papers 43675, The World Bank.
  2. Alberto Alesina & Joeph Zeira, . "Technology and Labor Regulations," Working Papers 0729, University of Crete, Department of Economics.
  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.
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  5. 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.
  6. 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).
  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. 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.
  9. 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.
  10. Stoneman, Paul & Kwon, Myung Joong, 1996. "Technology Adoption and Firm Profitability," Economic Journal, Royal Economic Society, vol. 106(437), pages 952-62, July.
  11. 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.
  12. 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.
  13. 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.
  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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