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Manufacturing firms in Africa: Some stylized facts about wages and productivity

  • Clarke, George

Why have so few countries in Sub-Saharan Africa been successful in export-oriented manufacturing? This paper uses firm-level data from the World Bank’s Enterprise Surveys to discuss this. The paper shows that although firms in most African countries are relatively unproductive, they are more productive on average than firms in other countries at similar levels of development. Further, even though many Africans earn subsistence wages working for informal firms, formal firms have higher labor costs than firms in other low-income countries. The paper discusses several possible reasons for this including the effect of the poor institutional environment on profits and the effect of limited competition on productivity measurement.

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File URL: http://mpra.ub.uni-muenchen.de/36122/1/MPRA_paper_36122.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36122.

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Date of creation: 21 Jan 2012
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Handle: RePEc:pra:mprapa:36122
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  1. Djankov, Simeon & Freund, Caroline & Pham, Cong S., 2006. "Trading on time," Policy Research Working Paper Series 3909, The World Bank.
  2. Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei & Lopez de Silanes, Florencio, 2001. "The regulation of entry," Policy Research Working Paper Series 2661, The World Bank.
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  4. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fachamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Mans Soderbom & Francis Teal & Albert Zeuf, 2004. "Do African manufacturing firms learn from exporting?," Development and Comp Systems 0409071, EconWPA.
  5. Falco, Paolo & Kerr, Andrew & Rankin, Neil & Sandefur, Justin & Teal, Francis, 2011. "The returns to formality and informality in urban Africa," Labour Economics, Elsevier, vol. 18(S1), pages S23-S31.
  6. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  7. de Mel, Suresh & McKenzie, David J. & Woodruff, Christopher, 2009. "Measuring microenterprise profits: Must we ask how the sausage is made?," Journal of Development Economics, Elsevier, vol. 88(1), pages 19-31, January.
  8. M�ns S–derbom & Francis Teal, 2003. "Are Manufacturing Exports the Key to Economic Success in Africa?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(1), pages 1-29, March.
  9. Omar Azfar & Peter Murrell, 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 387-411, 01.
  10. Laura Langbein & Stephen Knack, 2010. "The Worldwide Governance Indicators: Six, One, or None?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 350-370.
  11. George R. G. Clarke, 2009. "Beyond Tariffs and Quotas: Why Do African Manufacturers Not Export More?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(2), pages 44-64, March.
  12. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
  13. Clausen, Bianca & Kraay, Aart & Murrell, Peter, 2010. "Does respondent reticence affect the results of corruption surveys ? evidence from the world bank enterprise survey for Nigeria," Policy Research Working Paper Series 5415, The World Bank.
  14. Alvaro Escribano & J. Luis Guasch & Manuel De Orte & Jorge Pena, 2008. "Investment climate assessment based on demean Olley and Pakes decompositions: methodology and application to Turkey's investment climate survey," Economics Working Papers we082012, Universidad Carlos III, Departamento de Economía.
  15. Escribano, Alvaro & Guasch, J. Luis, 2005. "Assessing the impact of the investment climate on productivity using firm-level data : methodology and the cases of Guatemala, Honduras, and Nicaragua," Policy Research Working Paper Series 3621, The World Bank.
  16. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
  17. Ariel Pakes, 2008. "Theory and Empirical Work on Imperfectly Competitive Markets," NBER Working Papers 14117, National Bureau of Economic Research, Inc.
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