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The Small, the Young, and the Productive: Determinants of Manufacturing Firm Growth in Ethiopia
Abstract
This study examines the relationships between firm growth and firm size, age, and labor productivity, using annual census–based panel data on Ethiopian manufacturing firms. The study explicitly addresses the ongoing statistical concerns in firm growth models such as sample censoring, regression to the mean, and unobserved heterogeneity. Our empirical results indicate that firm growth decreases with size. Smaller firms have faster rates of growth than larger firms, even after compensating for their higher attrition rates. The negative relation between age and growth predicted by the learning model is found to apply only to younger firms. Labor productivity affects firm growth positively, which indicates that there is a market selection process at work during the period of economic reforms in Ethiopia.
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Cites
Initial conditions and moment restrictions in dynamic panel data models
Blundell, R., & Bond, S. (1998) · Journal of Econometrics · doi:10.1016/s0304-4076(98)00009-8 · Cited by 22,571
Cited by
Small Firm Growth in Developing Countries
Nichter, S., & Goldmark, L. (2009) · World Development · doi:10.1016/j.worlddev.2009.01.013 · Cited by 677
Access to finance and firm performance: Evidence from African countries
Fowowe, B. (2017) · Review of Development Finance · doi:10.1016/j.rdf.2017.01.006 · Cited by 331
Sroka, W., Pölling, B., & Mergenthaler, M. (2019) · NJAS: Wageningen Journal of Life Sciences · doi:10.1016/j.njas.2019.04.005 · Cited by 19
Metadata
- Authors
- Bigsten, A., & Gebreeyesus, M.
- Venue
- Economic Development and Cultural Change
- Publisher
- University of Chicago Press
- Published
- 2007-07
- Volume
- 55
- Issue
- 4
- Pages
- 813-840
- ISSN
- 0013-0079 (ISSN-L)
- 1539-2988
- OpenAlex
- W2078981186
- Cited by
- 176
- References
- 1
- FWCI
- 10.67
- Type
- journal article
- Language
- en
- Open access
- closed
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