Assessing the Impact of Infrastructure Quality on Firm Productivity in Africa : Cross-Country Comparisons Based on Investment Climate Surveys from 1999 to 2005
This paper provides a systematic, empirical assessment of the impact of infrastructure quality on the total factor productivity (TFP) of African manufacturing firms. This measure is understood to include quality in the provision of customs clearanc...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2010/01/11699361/assessing-impact-infrastructure-quality-firm-productivity-africa-cross-country-comparisons-based-investment-climate-surveys-1999-2005 http://hdl.handle.net/10986/19901 |
| Summary: | This paper provides a systematic,
empirical assessment of the impact of infrastructure quality
on the total factor productivity (TFP) of African
manufacturing firms. This measure is understood to include
quality in the provision of customs clearance, energy,
water, sanitation, transportation, telecommunications, and
information and communications technology (ICT).
Microeconometric techniques to investment climate surveys
(ICSs) of 26 African countries are carried out in different
years during the period 2002 6, making country-specific
evaluations of the impact of investment climate (IC) quality
on aggregate TFP, average TFP, and allocative efficiency.
For each country the impact is evaluated based on 10
different productivity measures. Results are robust once
controlled for observable fixed effects (red tape,
corruption and crime, finance, innovation and labor skills,
etc.) obtained from the ICSs. African countries are ranked
according to several indices: per capita income, ease of
doing business, firm perceptions of growth bottlenecks, and
the concept of demeaned productivity (Olley and Pakes 1996).
The countries are divided into two blocks:
high-income-growth and low-income-growth. Infrastructure
quality has a low impact on TFP in countries of the first
block and a high (negative) impact in countries of the
second. There is significant heterogeneity in the individual
infrastructure elements affecting countries from both
blocks. Poor-quality electricity provision affects mainly
poor countries, whereas problems dealing with customs while
importing or exporting affects mainly faster-growing
countries. Losses from transport interruptions affect mainly
slower-growing countries. Water outages affect mainly
slower-growing countries. There is also some heterogeneity
among countries in the infrastructure determinants of the
allocative efficiency of African firms. |
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