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Why Do South Korean Firms Produce So Much More Output per Worker than Ghanaian Ones?

Author

Listed:
  • Baptist, Simon

    (Economist Intelligence Unit)

  • Teal, Francis J.

    (University of Oxford)

Abstract

Macro analysis of the sources of income differences has produced very different results as to the importance of education. In this paper we investigate the roles of education and technology in explaining differences in firm level productivity across Ghana and South Korea. The labour productivity differentials across these firms exceed those implied by macro analysis. Median value-added per employee is over thirty times higher in South Korean than in Ghanaian manufacturing firms. We show that if we allow for a non-linear effect of education on output the whole of the average productivity differences across the countries can be explained. We discuss the policy implications that flow from this finding.

Suggested Citation

  • Baptist, Simon & Teal, Francis J., 2015. "Why Do South Korean Firms Produce So Much More Output per Worker than Ghanaian Ones?," IZA Discussion Papers 9157, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp9157
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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