Explaining Africa's (Dis)advantage
Ann Harrison (),
Justin Lin () and
Lixin Xu ()
No 18683, NBER Working Papers from National Bureau of Economic Research, Inc
Africa's economic performance has been widely viewed with pessimism. In this paper, we use firm-level data for around 80 countries to examine formal firm performance. Without controls, manufacturing African firms perform significantly worse than firms in other regions. They have lower productivity levels and growth rates, export less, and have lower investment rates. Once we control for geography, political competition and the business environment, formal African firms lead in productivity levels and growth. Africa's conditional advantage is higher in low-tech than in high-tech manufacturing, and exists in manufacturing but not in services. The key factors explaining Africa's disadvantage at the firm level are lack of infrastructure, access to finance, and political competition.
JEL-codes: O14 O4 O43 (search for similar items in EconPapers)
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Published as Harrison, Ann E. & Lin, Justin Yifu & Xu, Lixin Colin, 2014. "Explaining Africaâs (Dis)advantage," World Development, Elsevier, Elsevier, vol. 63(C), pages 59-77.
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