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Has Low Productivity Constrained The Competitiveness Of African Firms? A Comparison Of Kenyan And Bangladeshi Garment Firms

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  • Takahiro FUKUNISHI

Abstract

It has been argued that poor productivity performance is one of the critical causes of stagnation in the African manufacturing sector, but firm‐level empirical support is limited. Using original firm data from the garment industry, Kenyan and Bangladeshi firms were compared in terms of their technical efficiency and their contribution to competitiveness represented by unit costs. Our estimates indicate that there is no significant gap in the average technical efficiency of the two industries, although unit costs differ greatly between them. Higher unit costs in Kenyan firms mainly stem from high labor costs, while the impact of inefficiency is quite small. Productivity has little correlation with the stagnation of the garment industry in Kenya.

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  • Takahiro FUKUNISHI, 2009. "Has Low Productivity Constrained The Competitiveness Of African Firms? A Comparison Of Kenyan And Bangladeshi Garment Firms," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 307-339, September.
    • Handle: RePEc:bla:deveco:v:47:y:2009:i:3:p:307-339
    DOI: 10.1111/j.1746-1049.2009.00088.x
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    2. Fukunishi, Takahiro & Yamagata, Tatsufumi, 2013. "Slow and steady wins the race : how the garment industry leads industrialization in low-income countries," IDE Discussion Papers 412, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. Karmen Naidoo & Léonce Ndikumana, 2023. "The role of unit labor costs in African manufacturing investment and export performance," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1874-1909, August.
    4. Bournakis, Ioannis & Mei, Jen-Chung, 2023. "Gender, firm performance, and FDI supply–purchase spillovers in emerging markets," International Economics, Elsevier, vol. 175(C), pages 90-105.
    5. Kenichi Kashiwagi & Erina Iwasaki, 2024. "Industrial linkage, vertical integration and firm performance: evidence from textile and garment industry in Egypt," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(1), pages 803-828, February.

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