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Size and Efficiency in African Manufacturing Firms:Evidence from Firm-Level Panel Data

Author

Listed:
  • Måns Söderbom

    (Centre for the Study of African Economies)

  • Francis Teal

    (Centre for the Study of African Economies)

Abstract

Three dimensions of the performance of firms in Ghana’s manufacturing sector are investigated in this paper: their technology and the importance of technical and allocative efficiency. We show that the diversity of factor choices in not due to a non-homothetic technology. Observable skills are not quantitatively important as determinants of productivity. Technical inefficiency is not lower in firms with foreign ownership or older firms and its dispersion across firms is similar to that found in other economies. Large firms face far higher relative labour costs than small firms. If these factor price differentials could be levelled out, substantial gains thorough improvements in allocative efficiency would be possible.

Suggested Citation

  • Måns Söderbom & Francis Teal, 2004. "Size and Efficiency in African Manufacturing Firms:Evidence from Firm-Level Panel Data," Development and Comp Systems 0409010, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpdc:0409010
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    African manufacturing; productivity; efficiency; human capital; firm size;

    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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