Manufacturing Firms in Africa: Some Stylized Facts About Wages and Productivity

39 Pages Posted: 31 May 2012

See all articles by George R. G. Clarke

George R. G. Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business

Date Written: January 22, 2012

Abstract

Why have so few countries in Sub-Saharan Africa been successful in export-oriented manufacturing? This paper uses firm-level data from the World Bank’s Enterprise Surveys to discuss this. The paper shows that although firms in most African countries are relatively unproductive, they are more productive on average than firms in other countries at similar levels of development. Further, even though many Africans earn subsistence wages working for informal firms, formal firms have higher labor costs than firms in other low-income countries. The paper discusses several possible reasons for this including the effect of the poor institutional environment on profits and the effect of limited competition on productivity measurement.

Keywords: Africa, Zambia, Productivity, Manufacturing, Wages, East Asia

JEL Classification: O12, O14, O17, O25

Suggested Citation

Clarke, George, Manufacturing Firms in Africa: Some Stylized Facts About Wages and Productivity (January 22, 2012). Available at SSRN: https://ssrn.com/abstract=1989681 or http://dx.doi.org/10.2139/ssrn.1989681

George Clarke (Contact Author)

Texas A&M International University - A.R. Sanchez Jr., School of Business ( email )

5201 University Blvd.
Laredo, TX 78041-1900
United States

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