Are Afrian Manufacturing Firms Really Inefficient? Evidence from Firm-level Panel Data

Mans M. Soderbom () and Francis John Teal

Working Papers Series from Centre for the Study of African Economies, University of Oxford

Abstract: Three dimensions of the performance of firms in Ghana's anufacturing sector are investigated in this paper: their technology and the importance of technical and allocative efficiency. We show that the diversity of factor choices is 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 market distortions could be removed substantial gains thorough improvements in allocative efficiency would be possible.

Keywords: MANUFACTURING INDUSTRIES; PRODUCTIVITY; DEVELOPING COUNTRIES (search for similar items in EconPapers)
JEL-codes: O14 D24 O55 (search for similar items in EconPapers)
Date: 2001
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