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Assessing the Impact of Infrastructure Quality on Firm Productivity in Africa : Cross-Country Comparisons Based on Investment Climate Surveys from 1999 to 2005

ADVERSE EFFECTS AFFORDABILITY OF INFRASTRUCTURE SERVICES AIR AIR TRANSPORT ALLOCATIVE EFFICIENCY AVERAGE PRODUCTIVITY BENCHMARK BOOK VALUE BOTTLENECKS BUSINESS INDICATORS CAPITAL STOCK COMMUNICATIONS TECHNOLOGY COMPETITIVE MARKETS COMPETITIVE PRODUCTS COMPETITIVENESS CONSTANT RETURNS TO SCALE CONSUMER PRICE INDEX CUSTOM CUSTOMER DEMANDS CUSTOMS CUSTOMS CLEARANCE DEFLATORS DEPRECIATION RATE DEVELOPMENT ASSISTANCE DRIVERS E-BUSINESSES E-MAIL ECONOMETRIC ANALYSIS ECONOMETRIC METHODOLOGY ECONOMETRIC RESULTS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS ELASTICITIES ELASTICITY ELECTRICITY ELECTRICITY GENERATORS ELECTRICITY SUPPLY EMPLOYMENT EQUIPMENT EXPECTED RETURNS EXPORT PERFORMANCE EXPORTS FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS FUEL FUNCTIONAL FORMS GDP GDP PER CAPITA GEOGRAPHICAL AREA GEOGRAPHICAL AREAS GLOBAL ECONOMY GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES HUMAN CAPITAL ICT IMPACT OF TELECOMMUNICATIONS IMPERFECT INFORMATION INCOME LEVELS INEFFICIENCY INFORMATION TECHNOLOGY INFRASTRUCTURE COST INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROVISION INFRASTRUCTURE SECTOR INFRASTRUCTURE SERVICES INFRASTRUCTURE SPENDING INNOVATION INTERNATIONAL COMPARISONS INTERNATIONAL MARKETS INTERNATIONAL STANDARD INVENTORY INVESTMENT CLIMATE LABOR COSTS LABOR FORCE LABOR FORCE PARTICIPATION LABOR PRODUCTIVITY LABOR RELATIONS LICENSE LICENSES MANUFACTURING MANUFACTURING INDUSTRY MARGINAL PRODUCTIVITY MARKET CONDITIONS MARKET SHARE MARKET SHARES MARKETING MISSING VALUES MONOPOLIES PER CAPITA INCOME PERFORMANCE MEASURES PERFORMANCE OF GOVERNMENT PERFORMANCES PHONE CONNECTION PHYSICAL INFRASTRUCTURE PORT INFRASTRUCTURE POWER PRIVATE CAPITAL PRIVATE INVESTMENTS PRIVATE SECTOR PRIVATE SECTOR PARTICIPATION PRODUCTION FUNCTION PRODUCTIVITY PUBLIC INVESTMENT PUBLIC PRIVATE INFRASTRUCTURE QUALITY OF TRANSPORTATION R&D RAILROAD RAILWAYS REAL WAGES REGRESSION ANALYSES REGRESSION ANALYSIS RESULT RESULTS ROADS SANITATION SENSITIVITY ANALYSIS SUPPLIERS TAX TAX INCENTIVES TELECOM TELECOMMUNICATIONS TELECOMMUNICATIONS INFRASTRUCTURE TELEPHONE TELEPHONE LINES TOTAL FACTOR PRODUCTIVITY TRADE SERVICES TRANSACTION TRANSACTION COSTS TRANSIT TRANSPORT TRANSPORT COSTS TRANSPORT INFRASTRUCTURE TRANSPORT SERVICES TRANSPORTATION TRANSPORTATION SERVICES TRUE USES WAGES WATER INFRASTRUCTURE
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World Bank, Washington, DC
Africa
2014-09-02T14:24:50Z | 2014-09-02T14:24:50Z | 2010-01

This paper provides a systematic, empirical assessment of the impact of infrastructure quality on the total factor productivity (TFP) of African manufacturing firms. This measure is understood to include quality in the provision of customs clearance, energy, water, sanitation, transportation, telecommunications, and information and communications technology (ICT). Microeconometric techniques to investment climate surveys (ICSs) of 26 African countries are carried out in different years during the period 2002 6, making country-specific evaluations of the impact of investment climate (IC) quality on aggregate TFP, average TFP, and allocative efficiency. For each country the impact is evaluated based on 10 different productivity measures. Results are robust once controlled for observable fixed effects (red tape, corruption and crime, finance, innovation and labor skills, etc.) obtained from the ICSs. African countries are ranked according to several indices: per capita income, ease of doing business, firm perceptions of growth bottlenecks, and the concept of demeaned productivity (Olley and Pakes 1996). The countries are divided into two blocks: high-income-growth and low-income-growth. Infrastructure quality has a low impact on TFP in countries of the first block and a high (negative) impact in countries of the second. There is significant heterogeneity in the individual infrastructure elements affecting countries from both blocks. Poor-quality electricity provision affects mainly poor countries, whereas problems dealing with customs while importing or exporting affects mainly faster-growing countries. Losses from transport interruptions affect mainly slower-growing countries. Water outages affect mainly slower-growing countries. There is also some heterogeneity among countries in the infrastructure determinants of the allocative efficiency of African firms.

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