Sources of Manufacturing Productivity Growth in Africa
48 Pages Posted: 20 Aug 2019 Last revised: 26 Aug 2019
Date Written: August 19, 2019
This paper investigates the sources of growth in manufacturing productivity in Côte d'Ivoire, Ethiopia and Tanzania in comparison with the case of Bangladesh. Based on the analysis of establishment census data since the mid-1990s, it finds that reallocation of market share between firms contributed substantially to productivity growth in each of the four countries, although to a varying extent. In Ethiopia, the impact of market share reallocations among survivors tended to be larger than those associated with increases in within-plant productivity. In addition, plant closure (or exit) boosted productivity more than new plant openings (or entry) did in the sense that the relative productivity of survivors (or continuing plants) was higher relative to that of closing plants (or exit cases) than it was relative to the productivity of newly opening plants (or new entrants). Reallocation of market share plays an important role in raising aggregate productivity in Côte d'Ivoire as well. But the pattern here is opposite to that in Ethiopia in that in Côte d'Ivoire entering (or newly opening) plants have larger impact on aggregate productivity growth than closing (or exiting) plants. Unlike the case with Côte d'Ivoire and of Ethiopia, the reallocation of market share among surviving plants is a smaller source of manufacturing productivity growth in Tanzania than the new plant openings and plant closure. The data suggest that the reallocation of market share among surviving plants and exiting plants has larger impact on productivity growth in Bangladesh than the productivity gap between new plants and survivors, as in the case of Ethiopia.
Keywords: Construction Industry, Common Carriers Industry, Food & Beverage Industry, Plastics & Rubber Industry, Business Cycles and Stabilization Policies, General Manufacturing, Pulp & Paper Industry, Textiles, Apparel & Leather Industry, International Trade and Trade Rules, Transport Services, Oil Refining & Gas Industry, Labor Markets
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