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Services inputs and firm productivity in Sub-Saharan Africa : evidence from firm-level data


  • Arnold, Jens Matthias
  • Mattoo, Aaditya
  • Narciso, Gaia


The authors investigate the relationship between the productivity of African manufacturing firms and their access to services inputs. They use data from the World Bank Enterprise Survey for over 1,000 firms in 10 Sub-Saharan African countries to calculate the total factor productivity of firms. The Enterprise Surveys also contain unique measures of firms'access to communications, electricity, and financial services. The availability of these measures at the firm level, both as subjective and objective indicators, allows the authors to exploit the variation in services performance at the subnational regional level. Furthermore, by using the regional variation in services performance, they are also able to address concerns about the possible endogeneity of the services variables. The results show a significant and positive relationship between firm productivity and service performance in all three services sectors analyzed. The authors thus provide support for the argument that improvements in services industries contribute to enhancing the performance of downstream economic activities, and thus are an essential element of a strategy for promoting growth and reducing poverty.

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  • Arnold, Jens Matthias & Mattoo, Aaditya & Narciso, Gaia, 2006. "Services inputs and firm productivity in Sub-Saharan Africa : evidence from firm-level data," Policy Research Working Paper Series 4048, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4048

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    References listed on IDEAS

    1. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    2. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 245-276.
    3. Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
    4. Clarke, George R.G., 2005. "Beyond tariffs and quotas : why don't African manufacturers export more?," Policy Research Working Paper Series 3617, The World Bank.
    5. Benn Eifert & Alan Gelb & Vijaya Ramachandran, 2005. "Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data," Working Papers 56, Center for Global Development.
    6. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
    7. Arnold, Jens & Javorcik, Beata, 2005. "Gifted Kids or Pushy Parents? Foreign Acquisitions and Plant Performance in Indonesia," CEPR Discussion Papers 5065, C.E.P.R. Discussion Papers.
    8. Taye Mengistae & Catherine Pattillo, 2004. "Export Orientation and Productivity in Sub-Saharan Africa," IMF Staff Papers, Palgrave Macmillan, vol. 51(2), pages 1-6.
    9. Arnold, Jens & Javorcik, Beata & Mattoo, Aaditya, 2006. "Does Services Liberalization Benefit Manufacturing Firms?," CEPR Discussion Papers 5902, C.E.P.R. Discussion Papers.
    10. Mattoo, Aaditya & Rathindran, Randeep, 2006. "Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 64-98.
    11. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, vol. 67(2), pages 373-391, December.
    12. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
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    Economic Theory&Research; Education for the Knowledge Economy; Rural Communications; Commodities; Urban Economics;

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