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On the Evolution of the Firm Size Distribution in an African Economy

  • Justin Sandefur

The size of the informal sector is commonly associated with low per capita GDP and a poor business environment.� Recent episodes of reform and growth in several African countries appear to contradict this pattern.� From the mid 1980's onward, Ghana underwent dramatic liberalization and achieved steady growth, yet average firm size in the manufacturing sector fell from 19 to just 9 employees between 1987 and 2003.� I use a new panel of Ghanaian firms, spanning 17 years immediately post-reform, to model firm dynamics that differ markedly from well-estsablished 'stylized facts' in the empirical literature from other regions.� In contrast with American and European firms, entry of new firms and selection on observable characteristics, rather than within-firm growth, dominates industrial evolution in Ghana.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number CSAE WPS/2010-05.

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Date of creation: 01 Feb 2010
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Handle: RePEc:oxf:wpaper:csae-wps/2010-05
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  1. 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 545-83, April.
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