The Dynamics of Job Flows, Investment and Product Mix in African Firms

• Antragsteller: Professor Dr. Admasu Shiferaw
• Fachliche Zuordnung: Wirtschaftstheorie
• Förderung: Förderung von 2009 bis 2016
• Projektkennung: Deutsche Forschungsgemeinschaft (DFG) - Projektnummer 136621770

This project investigates the micro dynamics and interdependences of job flows, capital formation, and changes in the mix of products in the context of Sub-Saharan Africa. These interrelated micro processes have crucial implications on aggregate level outcomes including productivity growth and, an economy’s ability to create gainful employment opportunities and to broaden investment options through the introduction of new and better products. The project relies on a unique firm level panel data from Ethiopian manufacturing, and uses parametric and non-parametric panel data estimation techniques to analyze the nature of job creation and destruction, the patterns of product switching, and the role of different sources of uncertainty on firm level investment. Understanding these processes is crucial for mapping the competitiveness of an economy whereby resources are reallocated across a range of products within a firm, across firms in an industry and across industries.The availability of a reliable census-based micro panel data is one of the reasons for picking Ethiopia for this project since such data are extremely scarce in Sub-Saharan Africa. Moreover, Ethiopia is also one of the largest countries in the region and has implemented structural adjustment programs consistently over the last 15 years. During this period the country has enjoyed a relative peace and stability with the exception of the border conflict with Eritrea in the late 1990s and the political unrest following the disputed elections in 2005. Since the early 1990s the economy has been growing on average by about 5% per annum with fairly stable macroeconomic conditions. However, the country remains to be one of the poorest economies in the world with economic and demographic structures typical of sub-Saharan Africa. We expect that the lessons to be drawn from our study on Ethiopian manufacturing firms would be relevant for other countries in the region.

• DFG-Verfahren: Sachbeihilfen