Productivity premia and firm heterogeneity in Eastern Africa

Binyam Afewerk Demena, Jamal Msami, DE (Donald) Mmari, Peter van Bergeijk

Research output: Working paperAcademic

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Abstract

Productivity development is a key issue for export-driven growth and development. We use East African Community (EAC) firm-level data. Instead of focusing on single EAC partners, using the World Bank Enterprise Surveys, investigate firm-level productivity difference for seven countries that are part of the COMESA-EAC-SADC tripartite free trade area (TFTA). Using export and ownership dimensions, we identify four types of firms: National Domestic, National Exporters, Foreign Domestic and Foreign Exporters. We find a clear export productivity premium for national manufacturing firms and service sectors, but not for foreign owned firms. We also find clear foreign-ownership productivity premium for both domestic and exporting firms in manufacturing sectors but less clear in services sectors. The gap between national export premium and foreign-ownership premium is stronger in manufacturing firms as opposed to service sectors. Moreover, we find clear and strong productivity premia in size, training programmes and level of development in the manufacturing firms. In the services sector, these premia are always smaller and only significant for medium-sized firms. There is no difference in experience premium between sectors in terms of both significance and magnitude of the estimated coefficients.
Original languageEnglish
Place of PublicationThe Hague
PublisherInternational Institute of Social Studies (ISS)
Number of pages34
Publication statusPublished - 2021

Publication series

SeriesISS working papers. General series
Volume680

Research programs

  • ISS-DE

Series

  • ISS Working Paper-General Series

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