Explaining Africa's (Dis)advantage

Explaining Africa's (Dis)advantage

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...

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Bibliographic Details
Main Authors:	Harrison, Ann E., Lin, Justin Yifu, Xu, L. Colin
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	ACCOUNTABILITY ACCOUNTING ACCOUNTING SYSTEMS ADVERSE EFFECT ADVERSE EFFECTS AGENCY PROBLEMS AUTOMOBILE AUTOMOBILES BANK LOANS BENCHMARK BENCHMARKING BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS ENVIRONMENTS BUSINESS REGULATION BUSINESSES CAPITAL INVESTMENTS COLLECTIVE ACTION COMMUNICATION INFRASTRUCTURE COMPARATIVE ADVANTAGE COMPARATIVE ECONOMICS COMPETITIVENESS CONTRACT ENFORCEMENT CUSTOM DAMAGES DEMOCRACY DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMETRICS ECONOMIC BEHAVIOR ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMICS ECONOMISTS ELECTRICITY EMPIRICAL ANALYSIS EMPIRICAL STUDIES EMPLOYMENT GROWTH ENDOGENOUS VARIABLES ENTERPRISE SURVEY ENTERPRISE SURVEYS ENTREPRENEURSHIP ENVIRONMENTAL ENVIRONMENTS EQUIPMENT EXPORTS FACE VALUE FINANCIAL CONSTRAINTS FINANCIAL CRISIS FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN INVESTMENT GDP GDP PER CAPITA GLOBAL MARKETS GLOBALIZATION GROWTH RATE IMPORT TARIFFS IMPUTATION INCOME INCOME GROUPS INCOME LEVELS INDUSTRIALIZATION INDUSTRY PRODUCTIVITY INEFFICIENCY INFLATION INFLATION RATE INFORMATION SHARING INNOVATION INNOVATIONS INTERNATIONAL COMPETITION INTERNATIONAL TRADE JOB CREATION LABOR COSTS LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATIONS LESS DEVELOPED COUNTRIES MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MANAGERIAL DISCRETION MANUFACTURING MANUFACTURING INDUSTRIES MARKET COMPETITION MATERIAL MENU MINIMUM WAGES MONITORING MECHANISM MONOPOLY MONOPOLY RENTS NATURAL RESOURCE NATURAL RESOURCES NETWORK DATA OPEN ACCESS PENALTIES PERFORMANCE INDICATOR PERFORMANCE MEASURE PERFORMANCE MEASURES PHONES POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLITICAL INSTITUTIONS POSITIVE EFFECTS PRIVATE INVESTMENT PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTIVITY GROWTH PROFITABILITY PROPERTY RIGHTS PUBLIC GOODS RESULT RESULTS RETAIL STORES RISK SHARING SAFETY SEVERANCE PAY STRUCTURAL CHANGE TAXATION TELECOM TELECOMMUNICATION TELECOMMUNICATIONS TELEPHONE TIME PERIOD TOTAL FACTOR PRODUCTIVITY TRANSPORT UNEMPLOYMENT URBANIZATION VALUE ADDED WAGE STRUCTURE WAGES WEB
Online Access:	http://documents.worldbank.org/curated/en/2013/01/17395138/explaining-africas-disadvantage http://hdl.handle.net/10986/13181

Description
Summary:	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.

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