Are Firm Capabilities Holding Back Firms in Mozambique?
Firm capabilities—the abilities and practices to operate and innovate—are considered important drivers of firm performance. While the analysis of their importance is well established in developed countries, its study in the African context is more...
| Main Authors: | , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/284911625063784229/Are-Firm-Capabilities-Holding-Back-Firms-in-Mozambique http://hdl.handle.net/10986/35895 |
| Summary: | Firm capabilities—the abilities and
practices to operate and innovate—are considered important
drivers of firm performance. While the analysis of their
importance is well established in developed countries, its
study in the African context is more recent. The paper uses
a new representative sample of enterprises in Mozambique
comprising data on management and organizational practices,
as well as skills, to study the importance of firm
capabilities in Mozambique. The analysis suggests that the
private sector in Mozambique scores below other developing
countries in all dimensions of firm capabilities.
Enterprises engaging in more contractual relationships
demonstrate stronger firm capabilities. Firm capabilities
are key drivers of performance; controlling for other input
factors, firms in Mozambique with better firm capabilities
perform better. The relationship is robust to various
measures of performance and to including various firm and
manager characteristics. The analysis finds that for smaller
firms, non-exporters, and female-owned enterprises, their
gap in business performance can be explained by differences
in management practices. The results suggest Mozambique
should explore mechanisms of expanding firm capabilities in
targeted types of firms. |
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