Firm Size, Technological Capabilities and Market-Oriented Policies in Mauritius

Abstract

Mauritius is an outlier in Sub-Saharan Africa for its impressive manufactured export performance based on garments since the adoption of market-oriented policies in the early 1980s. Little, however, is known about the role played by internal technological factors on the exporting behaviour of enterprises of different size classes in the Mauritian garment industry. Using recent methodological developments in the literature on industrial technological capabilities, this paper explores this issue by constructing a technology index and conducting econometric analysis on factors affecting enterprise-level technological development and export performance in a sample of Mauritian garment enterprises. The econometric results show that firm size, technical manpower, training expenditures and external technical assistance are positively related to the technology index. This confirms that investments in human capital and seeking information, both facilitated by size, improve technological performance. This is strengthened by the fact that the technology index and foreign ownership have positive and statistically significant effects on export performance of each firm. The technology index is a robust tool of empirical research and can be used to analyse the technological record of enterprises in adjusting developing countries.

Keywords: firm size, technological capabilities, exports, Mauritius