Explaining Africa&Apos;S (Dis)Advantage

57 Pages Posted: 20 Apr 2016

See all articles by Ann E. Harrison

Ann E. Harrison

University of California, Berkeley; National Bureau of Economic Research (NBER)

Justin Y. Lin

Peking University - China Center for Economic Research

Lixin Colin Xu

World Bank - Development Research Group (DECRG)

Date Written: January 1, 2013


Africa's economic performance has been widely viewed with pessimism. In this paper, firm-level data for around 80 countries are used 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 geography, political competition and the business environment are controlled for, 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.

Keywords: Labor Policies, Environmental Economics & Policies, E-Business, Economic Theory & Research, Banks & Banking Reform

Suggested Citation

Harrison, Ann E. and Lin, Justin Yifu and Xu, Lixin Colin, Explaining Africa&Apos;S (Dis)Advantage (January 1, 2013). World Bank Policy Research Working Paper No. 6316, Available at SSRN: https://ssrn.com/abstract=2201404

Ann E. Harrison (Contact Author)

University of California, Berkeley ( email )

Giannini Hall
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Justin Yifu Lin

Peking University - China Center for Economic Research ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871

Lixin Colin Xu

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
MC 3-427
Washington, DC 20433
United States
202-473-4664 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/cxu

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