ERF 26th Annual Conference
Explaining Firm-level Gender Productivity Differential in Africa
No.
ERF26_121
Publisher
ERF
Date
July, 2020
Topic
M5. Personnel Economics
L2. Firm Objectives, Organization, and Behavior
D2. Production and Organizations
Total factor productivity is a fundamental measure of economic efficiency and, generally, a key determinant of welfare. However, evidence on the determinants of variation in productivity levels across firms in developing countries is limited. We exploit a harmonized firm-level survey dataset of 46 African countries over the period 2006-2018 to explain the total factor productivity gender differential and identify the association pathways in Africa in general and the regions of North Africa and East Africa in particular. Special focus is placed on behavior with respect to innovation and technology adoption and dealing with market inefficiencies and institutional barriers, as five composite indices are constructed to reflect the broad categories of TFP determinants. We estimate several regression specifications and apply mean- and quantile-based decomposition approaches. Our results suggest that there is a substantial productivity differential by the gender of manager in Africa, specifically in the Northern and Eastern regions. The observed differential is mainly attributable to differences in unobservable characteristics, as reflected by differences in the returns to the use of foreign-licensed technology, R&D spending, the lack of access to finance, and perceptions of the rule of law, rather than differences in educational or entrepreneurial abilities. Direct policy implications stem from our findings of how various determinants affect male- and female-managed firms differently. Addressing gender-specific barriers to entrepreneurship and leveraging the full productive potential of all economic actors—male and female—represent a significant opportunity to unleash Africa’s productive potential.
Research Associates
Amira El-Shal
Acting Associate Director of Research, J-PAL MENA
Policy Affiliates
Hanan Morsy
Director of Macroeconomic Policy, Forecasting and Research,...