What determines the long run growth rate in Kenya?
This paper examines the determinants of total factor productivity (TFP) in Kenya. We utilized the theoretical insights from the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and followed Senhadji's (2000) growth accounting procedure. We find that growth in Kenya, until the 1990s was mainly due to factor accumulation. Since then, TFP has made a small contribution to growth. Our findings imply that while variables like overseas development aid, foreign direct investment and progress of financial sector improves TFP, trade openness is the key determinant. Consequently, policy makers should focus on policies that improve trade openness if the long run growth rate is to be raised.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Romer, Paul M, 1990.
"Endogenous Technological Change,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S71-102, October.
- López-Pueyo, Carmen & Mancebón, María-Jesús, 2010. "Innovation, accumulation and assimilation: Three sources of productivity growth in ICT industries," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 268-285, March.
- B. Bhaskara Rao & Gazi Mainul Hassan, 2012. "An analysis of the determinants of the long-run growth rate of Bangladesh," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 565-580, February.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Oketch, Moses O., 2006. "Determinants of human capital formation and economic growth of African countries," Economics of Education Review, Elsevier, vol. 25(5), pages 554-564, October.
- Rao, B. Bhaskara & Tamazian, Artur, 2008. "A model of growth and finance: FIML estimates for India," MPRA Paper 8763, University Library of Munich, Germany.
- Mankiw, N Gregory & Romer, David & Weil, David N, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(2), pages 407-37, May.
- Robert J. Barro, 1989.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- Rao, B. Bhaskara & Vadlamannati, Krishna Chaitanya, 2010.
"Globalization and growth in the low Income African countries with the extreme bounds analysis,"
21924, University Library of Munich, Germany.
- Rao, B. Bhaskara & Vadlamannati, Krishna Chaitanya, 2011. "Globalization and growth in the low income African countries with the extreme bounds analysis," Economic Modelling, Elsevier, vol. 28(3), pages 795-805, May.
- Rao, B. Bhaskara & Singh, Rup & Kumar, Saten, 2008.
"Do we need time series econometrics,"
10530, University Library of Munich, Germany, revised 14 Sep 2008.
- Rao, B. Bhaskara, 2010.
"Estimates of the steady state growth rates for selected Asian countries with an extended Solow model,"
Elsevier, vol. 27(1), pages 46-53, January.
- Rao, B. Bhaskara, 2008. "Estimates of the Steady State Growth Rates for Selected Asian Countries with an Extended Solow Model," MPRA Paper 9724, University Library of Munich, Germany, revised 01 Jul 2008.
- Salvatore, Dominick, 2008. "Growth, productivity and compensation in the United States and in the other G-7 countries," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 627-631.
- De Vita, G. & Endresen, K. & Hunt, L.C., 2006.
"An empirical analysis of energy demand in Namibia,"
Elsevier, vol. 34(18), pages 3447-3463, December.
- Glauco De Vita & Klaus Endresen & Lester C Hunt, 2005. "An Empirical Analysis of Energy Demand in Namibia," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 110, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
- Duval, Romain & de la Maisonneuve, Christine, 2010. "Long-run growth scenarios for the world economy," Journal of Policy Modeling, Elsevier, vol. 32(1), pages 64-80, January.
- Rao, B. Bhaskara & Kumar, Saten, 2009.
"Is the US Demand for Money Unstable?,"
15715, University Library of Munich, Germany.
- Feldstein, Martin, 2008. "Did Wages Reflect Growth in Productivity?," Scholarly Articles 2794832, Harvard University Department of Economics.
- B. Bhaskara Rao, 2007.
"Estimating short and long-run relationships: a guide for the applied economist,"
Taylor & Francis Journals, vol. 39(13), pages 1613-1625.
- Bhaskara Rao, 2005. "Estimating Short and Long Run Relationships: A Guide to the Applied Economist," Econometrics 0508013, EconWPA.
- Salinas-Jimenez, M Mar & Alvarez-Ayuso, Inmaculada & Delgado-Rodriguez, M Jesus, 2006. "Capital accumulation and TFP growth in the EU: A production frontier approach," Journal of Policy Modeling, Elsevier, vol. 28(2), pages 195-205, February.
- Edwards, Sebastian, 1998.
"Openness, Productivity and Growth: What Do We Really Know?,"
Royal Economic Society, vol. 108(447), pages 383-98, March.
- Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
- Oduor, Jacob & Karingi, Stephen & Mwaura, Stephen, 2011. "Efficiency of financial market intermediation in Kenya: A comparative analysis," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 226-240, March.
- Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2003.
"Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria,"
Journal of Policy Modeling,
Elsevier, vol. 25(6-7), pages 567-583, September.
- Suleiman Abu-Bader & Aamer Abu-Qarn, 2003. "Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel and Syria," Working Papers 163, Ben-Gurion University of the Negev, Department of Economics.
- Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2003. "Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel and Syria," MPRA Paper 1115, University Library of Munich, Germany.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Robert J. Barro & Jong-Wha Lee, 2010.
"A New Data Set of Educational Attainment in the World, 1950-2010,"
NBER Working Papers
15902, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
- B. Bhaskara Rao & Maheshwar Rao, 2009. "Openness and growth in Fiji: some time series evidence," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1653-1662.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Dar, Atul A. & AmirKhalkhali, Sal, 2002. "Government size, factor accumulation, and economic growth: evidence from OECD countries," Journal of Policy Modeling, Elsevier, vol. 24(7-8), pages 679-692, November.
- Adams, Samuel, 2009. "Foreign Direct investment, domestic investment, and economic growth in Sub-Saharan Africa," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 939-949, November.
- Johnson, Paul & Durlauf, Steven N & Temple, Johnathan R. W., 2004.
Vassar College Department of Economics Working Paper Series
61, Vassar College Department of Economics.
- Lipow, Jonathan & Antinori, Camille M., 1995. "External security threats, defense expenditures, and the economic growth of less-developed countries," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 579-595, December.
- Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 6.
- Arndt, Channing, 2006. "HIV/AIDS, human capital, and economic growth prospects for Mozambique," Journal of Policy Modeling, Elsevier, vol. 28(5), pages 477-489, July.
- Martin S. Feldstein, 2008.
"Did Wages Reflect Growth in Productivity?,"
NBER Working Papers
13953, National Bureau of Economic Research, Inc.
- Odhiambo, Nicholas M., 2009. "Savings and economic growth in South Africa: A multivariate causality test," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 708-718, September.
- Mark Rogers, 2003. "A Survey of Economic Growth," The Economic Record, The Economic Society of Australia, vol. 79(244), pages 112-135, 03.
- Jeffrey D. Sachs & Andrew Warner, 1995.
"Economic Reform and the Process of Global Integration,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
- Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- B. Bhaskara Rao, 2010.
"Time-series econometrics of growth-models: a guide for applied economists,"
Taylor & Francis Journals, vol. 42(1), pages 73-86.
- Rao, B. Bhaskara, 2006. "Time Series Econometrics of Growth Models: A Guide for Applied Economists," MPRA Paper 1547, University Library of Munich, Germany.
- Phillips, Peter C B & Hansen, Bruce E, 1990.
"Statistical Inference in Instrumental Variables Regression with I(1) Processes,"
Review of Economic Studies,
Wiley Blackwell, vol. 57(1), pages 99-125, January.
- Tom Doan, . "FM: RATS procedure to estimate cointegrating vectors using Fully Modified Least Squares," Statistical Software Components RTS00069, Boston College Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:34:y:2012:i:5:p:705-718. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.