Survival and success among African manufacturing firms
Recent reforms in most African economies of their trading and exchange rate regimes have eliminated much of the protection which previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this paper we cons...
| Hlavní autoři: | , , |
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| Médium: | Working paper |
| Jazyk: | English |
| Vydáno: |
2004
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| Témata: |
| _version_ | 1826260807849082880 |
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| author | Harding, A Söderbom, M Teal, F |
| author_facet | Harding, A Söderbom, M Teal, F |
| author_sort | Harding, A |
| collection | OXFORD |
| description | Recent reforms in most African economies of their trading and exchange rate regimes have eliminated much of the protection which previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this paper we consider the roles of learning, competition and market imperfections in determining three aspects of firm performance, namely firm exit, firm growth and productivity growth. We use a pooled panel data set of firms in Ghana, Kenya and Tanzania that spans a period of five years. We find that the main determinant of exit is firm size, with small firms having much higher exit rates than large ones. Productivity impacts on firm survival among large firms, but not among small firms. Reasons for this result are discussed. We find evidence that, among surviving firms, old firms grow slower than young firms, which is interpreted as evidence consistent with market constraints limiting growth of firms in Africa. We find no evidence that larger firms have faster rates of productivity or input growth, or are more efficient in the sense of benefiting from scale economies. We also find that competitive pressure enhances productivity growth. Given that one of the objectives of the reform programmes implemented in all three countries was to stimulate higher efficiency levels, this finding shows that one aspect of the reform programme has been successful. |
| first_indexed | 2024-03-06T19:11:36Z |
| format | Working paper |
| id | oxford-uuid:16f6aab6-0f17-4dc3-a64f-64ecbf7a7ee3 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T19:11:36Z |
| publishDate | 2004 |
| record_format | dspace |
| spelling | oxford-uuid:16f6aab6-0f17-4dc3-a64f-64ecbf7a7ee32022-03-26T10:34:19ZSurvival and success among African manufacturing firms Working paperhttp://purl.org/coar/resource_type/c_8042uuid:16f6aab6-0f17-4dc3-a64f-64ecbf7a7ee3Industrial economicsEconomicsAfricaEnglishOxford University Research Archive - Valet2004Harding, ASöderbom, MTeal, FRecent reforms in most African economies of their trading and exchange rate regimes have eliminated much of the protection which previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this paper we consider the roles of learning, competition and market imperfections in determining three aspects of firm performance, namely firm exit, firm growth and productivity growth. We use a pooled panel data set of firms in Ghana, Kenya and Tanzania that spans a period of five years. We find that the main determinant of exit is firm size, with small firms having much higher exit rates than large ones. Productivity impacts on firm survival among large firms, but not among small firms. Reasons for this result are discussed. We find evidence that, among surviving firms, old firms grow slower than young firms, which is interpreted as evidence consistent with market constraints limiting growth of firms in Africa. We find no evidence that larger firms have faster rates of productivity or input growth, or are more efficient in the sense of benefiting from scale economies. We also find that competitive pressure enhances productivity growth. Given that one of the objectives of the reform programmes implemented in all three countries was to stimulate higher efficiency levels, this finding shows that one aspect of the reform programme has been successful. |
| spellingShingle | Industrial economics Economics Africa Harding, A Söderbom, M Teal, F Survival and success among African manufacturing firms |
| title | Survival and success among African manufacturing firms |
| title_full | Survival and success among African manufacturing firms |
| title_fullStr | Survival and success among African manufacturing firms |
| title_full_unstemmed | Survival and success among African manufacturing firms |
| title_short | Survival and success among African manufacturing firms |
| title_sort | survival and success among african manufacturing firms |
| topic | Industrial economics Economics Africa |
| work_keys_str_mv | AT hardinga survivalandsuccessamongafricanmanufacturingfirms AT soderbomm survivalandsuccessamongafricanmanufacturingfirms AT tealf survivalandsuccessamongafricanmanufacturingfirms |