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Why Do South Korean Firms Produce So Much More Output per Worker than Ghanaian Ones?

Simon Baptist and Francis J. Teal ()
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Simon Baptist: Economist Intelligence Unit
Francis J. Teal: University of Oxford

No 9157, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Macro analysis of the sources of income differences has produced very different results as to the importance of education. In this paper we investigate the roles of education and technology in explaining differences in firm level productivity across Ghana and South Korea. The labour productivity differentials across these firms exceed those implied by macro analysis. Median value-added per employee is over thirty times higher in South Korean than in Ghanaian manufacturing firms. We show that if we allow for a non-linear effect of education on output the whole of the average productivity differences across the countries can be explained. We discuss the policy implications that flow from this finding.

Keywords: African and Asian manufacturing; productivity; efficiency; human capital (search for similar items in EconPapers)
JEL-codes: D24 O14 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015-06
New Economics Papers: this item is included in nep-afr and nep-eff
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