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Firm Size Matters: Growth and Productivity Growth in African Manufacturing

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  • Van Biesebroeck, Johannes

Abstract

In a sample of manufacturing firms from nine sub-Saharan African countries, large firms are found to be extremely important. As in more developed economies, they achieve higher productivity levels and are more likely to survive. In contrast, the commonly found higher growth rates for small firms are not replicated in the African sample, and the distribution of firms changes very little over time. Firms are more likely to have started out large than to have grown to a large size. The labor market relocates workers toward the most productive firms, and this reinforces the importance of large firms for aggregate productivity growth. Formal credit institutions award most financing to large firms, and access to credit is positively correlated with productivity, even conditional on firm size.

Suggested Citation

  • Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-583, April.
  • Handle: RePEc:ucp:ecdecc:y:2005:v:53:i:3:p:545-83
    DOI: 10.1086/426407
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    References listed on IDEAS

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