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Measuring Firm-Level Inefficiencies in the Ghanaian Manufacturing Sector

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  • Andrea Szabó

Abstract

This paper measures firm-level inefficiencies in input use among manufacturing firms in Ghana by explicitly estimating their production function. I find that the fraction of undercapitalized firms is 46%, but overall firms use 77% more capital and 40% less labor than would be optimal. Underutilization of labor is especially prevalent among firms with a unionized workforce. Firms with formal loans and firms with more human capital are closer to their efficient capital stock. The findings suggest large potential gains in value added from adjusting input use in the optimal direction.

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  • Andrea Szabó, 2018. "Measuring Firm-Level Inefficiencies in the Ghanaian Manufacturing Sector," Economic Development and Cultural Change, University of Chicago Press, vol. 66(3), pages 447-487.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/695881
    DOI: 10.1086/695881
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    Cited by:

    1. Melaku Abegaz & Gibson Nene, 2018. "Gender Wage and Productivity Gaps in the Manufacturing Industry. The Case of Ghana," Economic Papers, The Economic Society of Australia, vol. 37(3), pages 313-326, September.

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