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Size and Efficiency in African Manufacturing Firms:Evidence from Firm-Level Panel Data

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  • Måns Söderbom

    (Centre for the Study of African Economies)

  • Francis Teal

    (Centre for the Study of African Economies)

Abstract

Three dimensions of the performance of firms in Ghana’s manufacturing sector are investigated in this paper: their technology and the importance of technical and allocative efficiency. We show that the diversity of factor choices in not due to a non-homothetic technology. Observable skills are not quantitatively important as determinants of productivity. Technical inefficiency is not lower in firms with foreign ownership or older firms and its dispersion across firms is similar to that found in other economies. Large firms face far higher relative labour costs than small firms. If these factor price differentials could be levelled out, substantial gains thorough improvements in allocative efficiency would be possible.

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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0409010.

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Length: 40 pages
Date of creation: 15 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0409010

Note: Type of Document - pdf; pages: 40
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Web page: http://128.118.178.162

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Keywords: African manufacturing; productivity; efficiency; human capital; firm size;

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