Mans Soderbom

Mans Soderbom
University of Gothenburg | GU · Department of Economics

About

84
Publications
17,166
Reads
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3,734
Citations
Additional affiliations
January 2008 - present
University of Gothenburg
Position
  • Professor (Full)
April 2000 - December 2007
University of Oxford
Position
  • Research Associate

Publications

Publications (84)
Article
We examine patterns of adoption of a new airtime transfer service over time. We document a strong positive correlation between own adoption and increased usage of the new airtime transfer platform by social neighbours. We examine the possible sources of this correlation by distinguishing between network externalities that extend after adoption and...
Article
We use census panel data on Ethiopian manufacturing firms to analyze how enterprise clustering in local markets covaries with firm‐level output prices and physical productivity. We find a negative and statistically significant relationship between the density of firms that produce a given product in a given location and the local price of that prod...
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This study combines evidence from interviews in seven countries with (i) government institutions responsible for attracting Foreign Direct Investment (FDI), (ii) 102 multinationals (MNEs), and (iii) 226 domestic firms linked to these foreign affiliates as suppliers, customers, or competitors, to identify whether relations between MNEs and domestic...
Article
We hypothesize that research and development (R&D) is sensitive to cash flow fluctuations due to asymmetric information and agency problems in the credit market. We adopt a variant of the Q model for R&D investment using the value of the firm, physical capital and employment to capture firm fundamentals as proxies for investment opportunities. We a...
Article
A difference/system generalized method of moments (GMM) model that imposes time-constant coefficients is common in empirical studies using panel data. However, a rejection by the Sargan–Hansen test is sometimes a serious concern for researchers. We highlight the fact that the Sargan–Hansen test for GMM estimators applied to panel data is a joint te...
Article
We use data on Ethiopian manufacturing firms and commodity-level data on tariffs to examine the effects of trade liberalisation on firm performance. We distinguish the productivity gains that arise from reducing final goods tariffs from those that arise from reducing tariffs on intermediate inputs. We find no evidence that output tariff reduction i...
Book
Africa is rising. Since 1995 it has grown faster than many other parts of the developing world. Per capita income has been increasing steadily, and with six of the world's ten fastest- growing economies of the last de cade, Africa has been branded the developing world's next "frontier market" by Wall Street and the World Bank. Yet Africa's experien...
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Aid providers often describe small firms as 'job creators'. But what types of jobs do they create? Drawing on enterprise survey data for nine African countries and panel data for Ethiopia we find that small and large formal sector firms create similar numbers of net jobs. Small firms, however, have much higher turnover of employment and pay persist...
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We analyse the relationship between road infrastructure quality and the location choice and entry size of manufacturing firms in Ethiopia. We use GIS-based panel data on town-level measures of road infrastructure and census-based panel data on firms. Our dataset covers a period of considerable improvements in road infrastructure as a result of majo...
Article
The connections between transport infrastructure and economic development have been extensively analyzed in previous research, but little is known about the cost of infrastructure investments in poor countries. This paper examines drivers of unit costs of construction and maintenance of transport infrastructure in low and middle income countries an...
Chapter
There are several possible reasons why the agglomeration of enterprises can be a source of improved performance. For example, firms located close to each other stand a better chance of benefiting from information spillovers. Access to labour tends to be better, and transaction costs tend to be lower, in areas where the population of firms is dense....
Article
This paper assesses the impact of risk and shocks on non-farm enterprise development in rural Ethiopia using a matched household–enterprise–community dataset augmented with precipitation based measures of risk. The likelihood of running a non-farm firm and the returns to running such firms co-vary with agricultural productivity shocks. Diversificat...
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Since the development of human capital theory, countless estimates of the economic benefits of investing in education for the individual have been published. While it is a universal fact that in all countries of the world the more education one has the higher his or her earnings, it is nevertheless important to know the empirical returns to schooli...
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I use firm-level census data to study changes in the structure of Ethiopia's manufacturing sector between 1998 and 2008. Over this period, aggregate manufacturing value-added grew at the same rate as GDP, the number of manufacturing firms more than doubled, and average firm size fell by more than 40%. I highlight substantial heterogeneity in econom...
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*This Report has not been formally edited. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization concerning the legal status of any country, territory, city or area, or of its author...
Article
Despite a decade of rapid economic growth, Africa's industrial sector remains underdeveloped. In this paper we explain why improved economic performance in the industrial sector is important for Africa's long-term growth, and discuss the prospects for accelerated industrialization on the continent. We distinguish between macroeconomic aspects, fact...
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Patterns of correlation in innovation and contractual practices among manufacturing firms in Ethiopia and Sudan are documented. Network data that indicate whether any two firms in the utilized sample do business with each other, buy inputs from a common supplier, or sell output to a common client are used for the analysis. Only limited support is f...
Article
We use survey data to investigate how urban households in Ethiopia coped with the food price shock in 2008. Qualitative data indicate that the high food price inflation was by far the most adverse economic shock between 2004 and 2008, and that a significant proportion of households had to adjust food consumption in response. Regression results indi...
Article
Which product to manufacture matters for a firm's productivity and long-run growth. Recent theoretical and empirical studies indicate that an important margin of adjustment to policy reforms is the reallocation of output within firms through changes in product mix decisions. This paper examines the frequency, pervasiveness and determinants of switc...
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Abel and Eberly (1999) prove that uncertainty has an ambiguous effect on long run capital accumulation in a real options model. We show that, with adjustment costs quadratic in investment, more uncertainty reduces capital and this effect may be large.
Article
Summary Manufacturing enterprises in rural and urban Ethiopia are compared to examine how location and investment climate characteristics affect performance. Urban firms are larger, more capital intensive and have higher labor productivity than rural firms, yet there is no strong evidence of increasing returns to scale. The hypothesis that firms in...
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Full-text available
We use survey data to investigate how urban households in Ethiopia coped with the food price shock in 2008 and idiosyncratic shocks. Qualitative data indicate that the high food price inflation was by far the most adverse economic shock between 2004 and 2008, and that a significant proportion of households had to adjust food consumption in response...
Article
bel and Eberly (1999) show that the effect of uncertainty on long run capital accumulation is ambiguous in a real options model with irreversible investment. We show that a higher level of uncertainty tends to reduce expected capital stock levels in a model with strictly convex adjustment costs. Simulations suggest that this negative impact of unce...
Article
We study the sensitivity of investment to cash flow conditional on measures of q in an adjustment costs framework with costly external …nance. We present a benchmark model in which this conditional investment-cash flow sensitivity increases monotonically with the cost premium for external …- finance, for …firms in a fi…nancially constrained regime....
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Growth in Africa's private, non-farm sector will generate more jobs, reduce vulnerability to weather shocks, spur technological progress and, ultimately, reduce poverty in the continent. Since domestic markets for non-farm products and services are typically small in Africa, growth in this sector requires participation of Africa's firms in the inte...
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This paper compares and contrasts the performance of rural and urban manufacturing firms in Ethiopia to assess the impact of market integration and the investment climate on firm performance. Rural firms are shown to operate in isolated markets, have poor access to infrastructure and a substantial degree of market power, whereas urban firms operate...
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By developing a simple theoretical model of the impact of market integration on sectoral output and employment in a poor rural setting, this paper demonstrates that trade can induce asymmetric growth. Under certain, plausible, assumptions, the non-farm sector will grow much faster than the agricultural sector when markets become integrated. Promoti...
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We use firm-level data for the Ethiopian manufacturing sector matched with commodity- level data on tariffs to examine the effect of trade liberalization on firm performance during the 1997-2005 period. We find relatively large positive effects of tariff reductions on total factor productivity, a result that is robust to treating tariffs as endogen...
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This paper investigates whether there are agglomeration effects in Ethiopia's manufacturing sector, using a rich panel census firm-level dataset for 1996-2004. The empirical evidence indicates that the geographical agglomeration of own-sector firms impacts positively on firm-level productivity. The evidence also indicates that such productivity gai...
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This paper uses uniquely matched household, enterprise and community survey data from four major regions in rural Ethiopia to characterize the performance, constraints and opportunities of nonfarm enterprises. The nonfarm enterprise sector is sizeable, particularly important for women, and plays an important role during the low season for agricultu...
Article
This paper develops a structural framework to estimate the e¤ects of uncertainty on investment behaviour and capital accumulation at the firm level. Our model allows uncertainty to affect capital accumulation through three possible channels that have been highlighted in the literature: the Hartman-Abel-Caballero effect; different forms of capital a...
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This paper investigates the education-earnings relationship in Ghana, drawing on the Ghana Living Standards Survey for 1998-99. The analysis has three main goals: to examine the labor market returns to education amongst wage-employed, self-employed and agricultural workers; to examine the labor market returns to literacy and numeracy skills for the...
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Using matched employer–employee data from eleven African countries, we investigate if there is job sorting in African labour markets. We find that much of the wage gap associated with education is driven by selection across occupations and firms. This is consistent with educated workers being more effective at complex tasks such as labour managemen...
Article
Using matched employer-employee data from ten African countries, we examine the relationship between wages, worker supervision, and labor productivity in manufacturing. Wages increase with firm size for both production workers and supervisors. We develop a two-tier model of supervision that can account for this stylized fact and we fit the structur...
Article
Recent reforms in many African economies of their trading and exchange rate regimes have eliminated much of the protection that previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this article we focus on the role of total factor productivity (TFP)...
Article
We use micro data on manufacturing employees in Kenya and Tanzania to estimate returns to education and investigate the shape of the earnings function in the period 1993-2001. In Kenya, there have been long-run falls in the returns to education while for Tanzania there is evidence of rising returns in the 1990s. The earnings functions are convex fo...
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The poor performance of many African economies has been associated with low growth of exports in general and of manufacturing exports in particular. In this paper, we draw on micro-evidence of manufacturing firms in five African countries, Kenya, Ghana, Tanzania, South Africa and Nigeria, to investigate the causes of poor exporting performance. We...
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In the early 1990s the World Bank launched the Regional Program on Enterprise Development ( rped ) in several African countries, a key component of which was to collect data on manufacturing firms. The data sets built by these and subsequent enterprise surveys in Africa generated considerable research. This article surveys the research on the Afric...
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This paper investigates whether African manufacturing exporters are more productive than non-exporters and whether these productivity differences precede entry into the export market. We find that exporters are more productive but that productivity does not matter for entry into the export market – suggesting that learning-by-exporting is important...
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Cobb Douglas production function parameters are not identified from cross-section variation when inputs are perfectly flexible and chosen optimally, and input prices are common to all firms. We consider the role of adjustment costs for inputs in identifying these parameters in this context. The presence of adjustment costs for all inputs allows pro...
Article
Large firms in Ghana and Kenya pay much higher wages than small ones. We use panel data to show this is not the result of employing high-ability individuals. The size effect remains substantial with controls for individual fixed effects.
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In this paper we investigate if the predictions of three different models of capital adjustment costs are consistent with the observed investment patterns among manufacturing firms in five African countries. We document a high frequency of zero investment episodes, which is consistent with both fixed adjustment costs and irreversibility and inconsi...
Article
Full-text available
Using matched employer-employee data from ten African countries, we examine the relationship between wages, worker supervision, and labor productivity in manufacturing. Wages increase with firm size for both production workers and supervisors. We develop a two-tier model of supervision that can account for this stylized fact and we fit the structur...
Article
Full-text available
Do openness to trade and higher levels of human capital promote faster productivity growth? That they do is a key implication of several versions of endogenous growth theory. To answer the question we use panel data on 93 countries spanning the 1970-2000 period. Controlling for fixed effects as well as endogeneity, the results show a significant ef...
Article
Three dimensions of the performance of firms in Ghana's manufacturing sector are investigated in this paper: their technology and the importance of technical and allocative efficiency. We show that the diversity of factor choices is not due to a nonhomothetic technology. Observable skills are not quantitatively important as determinants of producti...
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In this paper we investigate the implications of labour and capital market imperfections for the relationship between firm size and earnings. To establish that such a question is of interest we need to show that the firm size-wage effect cannot be explained by either the observed or unobserved skills of the workforce or the characteristics of the w...
Article
Full-text available
Recent reforms in most African economies of their trading and exchange rate regimes have eliminated much of the protection which previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this paper we consider the roles of learning, competition and market...
Article
Full-text available
We use firm-level panel data for the manufacturing sector in four African countries to investigate whether exporting impacts on efficiency, and whether efficient firms self-select into the export market. Based on simultaneous estimation of a production function and an export regression, our preferred results indicate significant efficiency gains fr...
Article
Empirical work in labour economics has focused on rent sharing as an explanation for the observed correlation in cross-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries we find strong evidence of risk shari...
Article
Full-text available
We investigate the question of whether firms in Africa's manufacturing sector are credit constrained. The fact that few firms obtain credit is not sufficient to prove constraints, since certain firms may not have a demand for credit while others may be refused credit as part of profit maximising behaviour by banks. To investigate this question, we...
Article
Full-text available
Empirical work in labor economics has focused on rent sharing as an explanation for the observed correlation between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries, we find strong evidence of risk sharing. Workers in eff...
Article
Full-text available
In this paper it is argued that policy towards manufacturing in Africa can reduce poverty if such policy focuses on the creation of high paying jobs. The paper draws on a range of cross- country firm-level evidence to show how policy can promote jobs and higher real wages. It is shown that Mauritius is a country which has achieved both these object...
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The authors model the duration of large-scale, violent civil conflicts, applying hazard functions to a comprehensive data set on such conflicts for the period 1960-99. They find that the duration of conflicts is determined by a substantially different set of variables than those that determine their initiation. The duration of conflict increases su...
Article
and seminar participants at Oxford for comments on an earlier draft. The research for this paper was funded by the Department for International Development. Electoral competition can have a significant influence on government decisions regarding public spending. In this paper I examine whether the move to multiparty elections in many African countr...
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Abstract: Do openness to trade and higher levels of human capital growth promote faster growth? To answer that question we use a panel of countries to investigate the role of human capital and two measures of openness in determining both the level of income and its growth rate. We argue that focusing on the levels of income by estimating a producti...
Article
Full-text available
Abstract: Three dimensions of the performance of firms in Ghana's manufacturing sector are investigated in this paper: their technology and the importance of technical and allocative efficiency. We show that the diversity of factor choices is not due to a non-homothetic technology. Observable skills are not quantitatively important as determinants...
Article
Full-text available
It has been argued that Africa will not be able to export manufactures as it lacks the necessary skills. This study uses panel data from Ghana to ask how skills have impacted on manufacturing investment and exports in the 1990s. Two dimensions of skills are defined and measure. The first is that observable in the education and experience of the wor...
Article
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In this paper two sets of issues are addressed using panel data from the manufacturing sector of five African countries. First, how high are the returns to human relative to physical capital. Second, what is the relative importance of technology and endowments of human and physical capital in determining differences in earnings and productivity acr...
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ABSTRACT: In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Measures of firm-level efficiency using stochastic production frontier models are constructed for the period 1992 to 1995. We find that there are large efficiency gains from exporting both i...
Article
Full-text available
Abstract: We investigate the question whether firms in the manufacturing sector in Africa are credit constrained. The fact that few firms obtain credit is not sufficient to prove constraints, since certain firms may not have a demand for credit while others may be refused credit as part of profit maximising behaviour by banks. To investigate this q...
Article
Firm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specificiations. There are controls for firm fixed effects...
Article
Macro policy has changed the real exchange rates for African countries dramatically in the 1990s. In this paper the possible impact of macroeconomic policy on firms in the manufacturing sector is considered based on a panel survey of such firms in Cameroon. Kenya, Ghana and Zimbabwe. The data show that most large African manufacturing firms do expo...
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This article examines the contractual practices of African manufacturing firms using survey data collected in Burundi, Cameroon, Cote d'lvoire, Kenya, Zambia, and Zimbabwe. Descriptive statistics and econometric results are presented. They show that contractual flexibility is pervasive and that relational contracting is the norm between manufacture...
Article
Full-text available
In this paper two sets of issues are addressed using panel data from the manufacturing sector of five African countries. First, how high are the returns to human relative to physical capital. Second, what is the relative importance of technology and endowments of human and physical capital in determining differences in earnings and productivity acr...