Impact of the business environment on output and productivity in Africa

El-hadj Bah and Lei Fang

MPRA Paper from University Library of Munich, Germany

Abstract: Africa is the poorest part of the world and it has the worst environment for long term business success by most standards. Empirical works normally find a negative correlation between income per worker and measures for poor business environment. This paper develops a general equilibrium model to assess the quantitative effects of the business environment, including access to finance, regulation, crime, corruption and infrastructure, on output and TFP for 30 Sub-Saharan African countries. We find that the quantitative effects of these areas of the business environment are large. They together can explain about 67% of the variation in income per capita relative to the US. Improving these dimensions of the business environment will be key for the long term development of the continent.

Keywords: Business environment; Investment Climate; African Development; Productivity (search for similar items in EconPapers)
JEL-codes: L23 O16 O47 (search for similar items in EconPapers)
Date: 2011-07-12
New Economics Papers: this item is included in nep-afr, nep-dev and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Impact of the business environment on output and productivity in Africa (2015)
Working Paper: Impact of the business environment on output and productivity in Africa (2011)
Working Paper: Impact of the business environment on output and productivity in Africa (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:32225

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