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Finding Obstacles to Growth: Is Infrastructure a Binding Constraint on African Light-Manufacturing Firms?

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  • Stefan Reppen

    (Department of Economic History, Stockholm University, Stockholm, Sweden)

Abstract

For African countries to develop and reduce poverty, it is necessary to create productive jobs and industrialise - which can happen through the light manufacturing sector. For such firms to grow, however, a good business environment is necessary. Thus, this paper analyses whether infrastructure puts a binding constraint on light-manufacturing firms in 8 African countries, and thus comprise a real bottleneck for development. The results indicate that there indeed exists a real bottleneck because of insufficient infrastructure for light manufacturing firms in general. However, there does not seem to be any significant difference between different sub sectors within the light-manufacturing sector. These findings indicate that, even at current levels of productivity, a relaxation of the constraints (i.e., improvements in the infrastructure supply) would significantly increase the economic activity, even without improvements in other areas of the business environment.

Suggested Citation

  • Stefan Reppen, 2015. "Finding Obstacles to Growth: Is Infrastructure a Binding Constraint on African Light-Manufacturing Firms?," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 820-832.
    • Handle: RePEc:eco:journ1:2015-03-23
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Africa; Infrastructure; Light Manufacturing;
    All these keywords.

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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