Template-type: ReDIF-Paper 1.0
Author-Name: Goedhuys, Micheline
Author-Email: goedhuys@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Janz, Norbert
Author-Email: janz@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Mohnen, Pierre
Author-Email: mohnen@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: What drives productivity in Tanzanian manufacturing firms: technology or 
	 institutions? 
Abstract: Using the rich micro data set of the World Bank Investment Climate 
	 Survey, this paper examines the determinants of productivity among 
	 manufacturing firms in the context of a least developed country, 
	 Tanzania. In particular it seeks to evaluate the importance of 
	 technological variables - such as R&D, education and training, 
	 innovation, foreign ownership, licensing and ISO certification - and 
	 institutional variables – such as access to credit, health of the 
	 workforce, regulation and business support services. Among the 
	 technological variables, R&D, and innovations in the form of new 
	 products or processes fail to produce any significant impact, and only 
	 foreign ownership, ISO certification and high education of the 
	 management appear to affect productivity. Some of the institutional 
	 variables on the contrary are highly significant and robust to different 
	 specifications of the model. As such, formal credit constraints, 
	 administrative burdens related to regulations and a lack of business 
	 support services seem to depress productivity, while membership of a 
	 business association produces the opposite effect. The results of a 
	 quantile regression further indicate that the educational level of the 
	 managers and access to formal credit are significant for the less 
	 productive firms only, whereas for the more productive firms it is 
	 having an ISO certification or being a member of a business association 
	 that are the significant determinants. 
Classification-JEL: O12, D24, C21
Keywords: Development, Productivity, Innovation, Institutions
Series: UNU-MERIT Working Papers
Creation-Date: 2006
Number: 037
File-URL: http://www.merit.unu.edu/publications/wppdf/2006/wp2006-037.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2006037