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Technology gap, imported capital goods and productivity of manufacturing plants in Sub-Saharan Africa

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  • Eugene Bempong Nyantakyi
  • Jonathan Munemo

Abstract

This paper uses firm-level data from Ghana, Tanzania and Kenya to examine the effect of capital goods imports on domestic firms' productivity, and the role firms' technology gap plays in aiding the transmission of knowledge embodied in capital goods to domestic firms. The results show that increasing imports of capital goods and closing technology gaps have positive effects on productivity. Furthermore, domestic firms with technology standards farther from international best practices benefit more from capital goods imports. The results also imply that trade liberalization policy aimed at eliminating tariffs on capital goods will significantly improve the performance of technically incompetent firms in the African manufacturing sector.

Suggested Citation

  • Eugene Bempong Nyantakyi & Jonathan Munemo, 2017. "Technology gap, imported capital goods and productivity of manufacturing plants in Sub-Saharan Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(2), pages 209-227, February.
  • Handle: RePEc:taf:jitecd:v:26:y:2017:i:2:p:209-227
    DOI: 10.1080/09638199.2016.1233450
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