• Productivity and resource allocation: An industry and firm level analysis for Ghana

    Author(s):

    Jorge Tavares Borges


    a502snu@yamaguchi-u.ac.jp ; Jorge.jtb1991@gmail.com
    2024-07-31 07:25:42

    43 Downloads 84 Views

    Abstract

    Productivity is the most important determinant of long-run growth. Firm-level productivity, in particular, is important because most productivity-related issues are micro-structural. Ghana has suffered from low productivity for a long time, attributed most recently to the misallocation of productive resources. This paper examines productivity and resource allocation in Ghana’s manufacturing industries through an extensive analysis of the distribution of productivity and resource allocation using unique firm-level longitudinal data. Specifically, we decompose aggregate labor productivity growth and show that productivity growth in Ghana’s manufacturing sector was mainly due to the within-sector allocation of labor rather than a reallocation of labor across industries. We also show that resource allocation was toward less productive industries. In addition, we also examine productivity distribution using the power law distribution and show that firms involved in international trade had a higher level of aggregation, i.e., resources are allocated to such firms led to higher productivity, and hence less resource misallocation.

    Keywords
    Firm-level productivity, Labor productivity distribution, resource allocation, Power-law distribution

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