Why can Mauritius export manufactures and Ghana not?
Exports of labour-intensive manufactures from sub-Saharan Africa are negligible with the exception of Mauritius. Such exports from Ghana are low relative to other sub-Saharan African countries and relative to what would be predicted by its factor endowment. Firm level data from the two countries is used to assess the reasons for this poor performance. Large firms (those with more than 100 employees) are much more likely to be in the export market than smaller firms. It is shown that Mauritian firms are four times more efficient than those in Ghana while wages are six times higher. However for large firms the productivity differential is similar but wages in Mauritius are only three times those in Ghana. Large firms in Ghana cannot compete with those from Mauritius due to their high wages relative to productivity.
|Date of creation:||1999|
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