Kenya’s Development Path and Factor Prices 1964-2000

Arne Bigsten () and Dick Durevall ()
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Dick Durevall: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

No 142, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This study analyses how changes in factor abundance and trade policy have affected factor prices in Kenya since 1964. First there was a period of capital deepening, but this was reversed from 1982. As a result, there has been a shift of production towards the labour-intensive informal sector. The econometric analysis shows that in the long run factor proportions determined relative factor returns; for instance, an increase in the capital-labour ratio raised the wage-capital rental ratio. We did not find any significant impact of changes in goods prices, due to among other things changes in trade policy, on factor returns.

Keywords: Factor abundance; trade policy; globalisation; factor prices; Kenya (search for similar items in EconPapers)
JEL-codes: D13 F13 O55 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2004-08-16
New Economics Papers: this item is included in nep-dev and nep-his
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