Taye Mengistae

World Bank · Trade and Competitiveness

An analysis of panel data on individuals in a random selection of urban households in Ethiopia reveals large, sustained, and unexplained earnings gaps between public and private and formal and informal sectors over 1994–2004. At the same time, we find, first, that the rate of mobility increased in the two pairs of sectors. Sample transitions rates...

Although it had a a lower income level than India in 1980, China's 2006 per capita gross domestic product stands more than twice that of India's. This paper investigates the role of the business environment in explaining China's productivity advantage using recent firm-level survey data. The analysis finds that China has better infrastructure, more...

The causes and consequences of foreign direct investment in developing countries remain a subject of debate among researchers and policymakers alike. The authors use international data and a new micro-data set of firms in 13 Southern African developing countries to investigate the benefits and determinants of foreign direct investment in this regio...

Why do firms choose to locate in the informal sector? Researchers often argue that the high cost of regulation prevents informal firms from becoming formal and productive. Our results point to a more nuanced story. Using data from surveys of microenterprises in South Africa, Namibia, Botswana, Kenya, Uganda, Tanzania, and Rwanda, we find that the l...

We compare samples of textiles and garments producers across groups of countries to find that, in general, productivity is far lower in Sub-Saharan Africa than it is in India. Indian manufacturers in turn are significantly less productive than their counterparts in Morocco, while producers in some SSA countries do match or exceed the Indian standar...

This paper estimates a structural dynamic business investment equation and an error correction model of fixed assets growth on a sample of predominantly small and mid-size manufacturers in India. The results suggest that excessive labor regulation, power shortages, and problems of access to finance are all significant factors in industrial growth i...

This paper estimates a dynamic business growth equation on a sample of small-scale manufacturers. The results suggest that excessive labor regulation, power shortages, and problems of access to finance are significant influences on industrial growth in India. The expected annual sales growth rate of an enterprise is lower where labor regulation is...

An analysis of panel data on individuals in a random selection of urban households in Ethiopia reveals large, sustained, and unexplained earnings gaps between public and private, and formal and informal sectors over the period 1994-2004. The authors have no formal evidence whetherthese gaps reflect segmentation of the labor market along either of t...

In a large cross-country sample of manufacturing establishments drawn from 188 cities, average exports per establishment are smaller for African firms than for businesses in other regions. The authors show that this is mainly because, on average, African firms face more adverse economic geography and operate in poorer institutional settings. Once t...

The literature identifies three distinct sources of economic inequality between regions: natural geography, agglomeration externalities and institutions. How important is each of these quantitatively, in absolute terms and relative to the other two? We investigate this question at the micro-economic level with respect to Morocco's provinces by anal...

An analysis of data on a sample of small-scale manufacturers shows that a business is less likely to survive and grows slower the smaller the average price-cost margin in the industry in which it operates. The probability of survival is also smaller in import competing industries. So is the mean growth rate among survivors. We interpret this as evi...

In a large cross-country sample of manufacturing establishments drawn from 188 cities, average exports per establishments are smaller for African firms than for businesses in other regions. Based on the estimation of firm level exporting equations, we show that this is mainly because, on average, African firms face more adverse economic geography a...

In a large crosscountry sample of manufacturing establishments drawn from 188 cities, average exports per establishments are smaller for African firms than for businesses in other regions. Based on the estimation of firm level exporting equations, we show that this is mainly because, on average, African firms face more adverse economic geography an...

How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing location decisions of individual firms. Using data...

Drawing on recently completed firm-level surveys in Bangladesh, China, India, and Pakistan, this article investigates the relationship between the investment climate and firm performance. These standardized surveys of large, random samples of firms in common sectors reveal that objective measures of the investment climate vary significantly across...

Infrastructure development is a priority on policy agendas in the EU and worldwide, because of the very high investment needs in basic infrastructure, especially in lagging behind regions and countries. The paper provides a descriptive analysis of the infrastructural gaps in EU transition economies at national and, as far as possible, regional leve...

Drawing on recently completed firm-level surveys in Bangladesh, Brazil, China, Honduras, India, Nicaragua, Pakistan, and Peru, this paper investigates the relationship between the investment climate and international integration. These standardized surveys of large, random samples of firms in common sectors reveal how firms experience bottlenecks a...

Several studies in developed economies have reported that the rate of growth of small firms decreases with firm age as well as size. This result is consistent with Jovanovic's (1982) version of the passive learning model of competitive selection and is conrmed by data on a random sample of manufacturing firms in Ethiopia. This paper uses the Ethiop...

This article examines the extent to which agency theory may explain chief executive officer (CEO) compensation in Chinese state-owned enterprises during the 1980s. We find support for the agency theory: CEO pay sensitivity decreases with the variance of performance. Moreover, the performance sensitivity of CEO pay increases with the marginal return...

This paper examines the extent to which agency theory may explain CEO compensation in state-owned enterprises (SOEs) in China during the 1980s. We find that the sensitivity of CEO pay to firm performance decreases with the variance of performance. This is consistent with the prediction of a tradeoff between incentives and insurance in agency theory...

Analysis of firm-level panel data from three sub-Saharan African economies shows that exporting manufacturers have a total factor productivity premium of 11-28 percent. The data do not allow testing of whether these premiums are caused by selection of more efficient producers into exporting or by learning-by-exporting. By thinking about the mechani...

Based on a survey of over 1000 manufacturing establishments across a number of states in India, this paper analyzes the effect of key aspects of the investment climate on firm productivity. We find that, controlling for establishment size and industry, value added per worker is about 44 percent lower in states that entrepreneurs consider to be of r...

In this survey paper we consider the microeconomic evidence on investment in African manufacturing. <?Pub Caret>We analyse both the determinants of investment behaviour and the return to that investment. In the 1990s market selection — the process by which the capital stock is reallocated in favour of more efficient firms — has been as strong in Af...

Recently researchers have been asking why Asian or European minorities in Africa seem to be more successful in business than are people of indigenous ethnicity. This paper draws attention to significant disparity in business ownership and performance that seems to exist among African ethnic groups as well. Having analyzed a random selection of smal...

This paper analyses production and labour market data on manufacturing firms in Ethiopia in order to test for skill formation and job-matching effects in wage growth. Estimated age and job seniority profiles of relative marginal productivity and relative wages indicate that both on-the-job skill formation and job matching are significant sources of...

How important is geography relative to, say, trade policy or institutional or physical infrastructure, in determining the growth potential of manufactured exports in Sub-Saharan Africa? In this paper we seek to answer this question by analyzing the export performance of more than 1400 manufacturers of textile and garments from six countries in the...

The author analyzes production and labor market data for a random selection of small to medium-size firms in Ethiopia to answer two questions: 1) Does a worker's marginal productivity increase with time in the labor market or with job security, as must be the case if on-the-job skill formation or job matching has anything to do with the dynamics of...

The international financial crisis manifests itself in Ireland not only as a crisis of the banking system, but also as a major fiscal crisis, aggravated by years of soft revenue policy and a housing bubble that has burst spectacularly. The severe drop in economic output results in a crisis of employment and a definitive end to the ‘Celtic Tiger’ er...

ABSTRACT: In this paper, I analyse production and labour market data from a random sample of manufacturing firms in Ethiopia in order to test for skill formation and job matching effects in wage growth. Based on estimated labor market experience and job seniority profiles of relative marginal productivity and relative wages, I find that both on-the...

ABSTRACT: Several studies in developed economies have reported that the rate of growth of small firms decreases with firm age as well as size. The result is consistent with Jovanovic's (1982) version of the passive learning model of competetive selection and is confirmed by data on a random sample of manufacturing firms in Ethiopia. This paper uses...

Several studies in developed economies have reported that the rate of growth of smallrms decreases withrm age as well as size. This result is consistent with Jovanovic's (1982) version of the passive learning model of competitive selection and is conrmed by data on a random sample of manufacturingrms in Ethiopia. This paper uses the Ethiopian data...

Drawing on recently completed firm-level surveys in Brazil, China, Honduras, Nicaragua, and Peru, this paper investigates the relationship between infrastructure and international integration. Thes e standardized surveys of large, random samples of firms in common,sectors reveal how firms experience bottlenecks and delays in hard infrastructure suc...

In many countries in Sub-Saharan Africa, levels of wage employment in the 1990s were no higher than they were in the 1980s. Growth in both manufacturing and economy-wide wage employment remained limited, even in those countries that have experienced positive economic growth rates in the recent past. Moreover, there has been a significant expansion...