In this article we review the status of African manufacturing firms in the global economy. We discuss how the policies relevant for manufacturing performance have developed over four decades starting in the 1960s, and take stock of the actual performance of the sector. We examine the prospects for improved performance, using a historical benchmark and a comparative advantage frame-work, and document empirical evidence on the relationship between openness and firm performance drawing on African firm-level data. Finally we discuss what economic policies are required to support industrial growth.
Acemoglu, D., S. Johnson and J. Robinson (2005), ‘Institutions as the Fundamental Cause of Long-Run Growth’, in P. Aghion and S. Durlauf (eds), Handbook of Economic Growth, Vol. 1. Amsterdam: North-Holland.
2.
Bernard, A.B. and J.B. Jensen (1999), ‘Exporting and Productivity’, Working Paper 7135, NBER, Cambridge, MA.
3.
Bigsten, A., P. Collier, S. Dercon, M. Fafchamps, B. Gauthier, J.W. Gunning, A. Oduro, R. Oostendorp, C. Pattillo, M. Söderbom, F. Teal and A. Zeufack (2004), ‘Do African Manufacturing Firm Learn from Exporting?’, Journal of Development Studies, 40(3): 115–41.
4.
Bigsten, A. and D. Durevall (2008), ‘Factor Proportions, Openness and Factor Prices in Kenya, 1965–2000’, Journal of Development Studies, 44(2): 289–310.
5.
Bigsten, A. and M. Gebreeyesus (2009), ‘Firm Productivity and Exports: Evidence from Ethiopian Manufacturing’, Journal of Development Studies, 45(10): 1–21.
6.
Bigsten, A. and M. Söderbom (2006), ‘What have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?’, World Bank Research Observer, 21(2): 241–65.
7.
Bigsten, A., M. Gebreeyesus and M. Söderbom (2009), ‘Gradual Trade Liberalization and Firm Productivity. Evidence from Ethiopian Manufacturing’, mimeo.
8.
Clerides, S., S. Lach and J. Tybout (1998), ‘Is Learning-by-Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco’, Quarterly Journal of Economics, 113(3): 903–47.
9.
Dornbush, R. (1992), ‘The Case for Trade Liberalization in Developing Countries’, Journal of Economic Perspectives, 6(1): 69–85.
10.
Grossman, G. and E. Helpman (1991), Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.
11.
Harrison, A. and A. Rodriguez-Clare (2009), ‘Trade, Foreign Investment, and Industrial Policy for Developing Countries’, in D. Rodrik and M.R. Rosenzweig (eds), Handbook of Development Economics, Vol. 5. Amsterdam: North-Holland.
12.
Holmes, T.J. and J.A. Schmitz (2001), ‘A Gain from Trade: From Unproductive to Productive Entrepreneurship’, Journal of Monetary Economics, 47(2): 417–46.
13.
Johnson, S., J.D. Ostry and A. Subramanian (2007), ‘The Prospects for Sustained Growth in Africa: Benchmarking the Constraints’, IMF Working Papers 07/52.
14.
Krugman, P. (1980), ‘Scale Economies, Product Differentiation, and the Pattern of Trade’, American Economic Review, 89(5): 950–59.
15.
Krugman, P. (1991), ‘Increasing Returns and Economic Geography’, Journal of Political Economy, 99(3): 483–99.
16.
Krugman, P. and M. Obstfeld (2009), International Economics. Theory and Policy, Boston: Pearson.
17.
Nishimizu, M. and S. Robinson (1984), ‘Trade Policies and Productivity Change in Semi-industrialized Countries’, Journal of Development Economics, 16(1&2): 177–206.
18.
Patillo, C., S. Gupta and K. Carey (2005), ‘Sustaining Growth Accelerations and Pro-Poor Growth in Africa’, IMF Working Paper no. 195, IMF. Washington DC.
19.
Porter, M.E. (1990), The Competitive Advantage of Nations. New York: Free Press, 1990.
20.
Roberts, M. and J.R. Tybout (1991), ‘Size Rationalization and Trade Exposure in Developing Countries’, in Baldwin (ed.), Empirical Studies of Commercial Policy. University of Chicago Press for NBER.
21.
Rodriguez, F. and D. Rodrik (2001), ‘Trade Policy and Economic Growth: A Sceptics Guide to the Cross-national Evidence’, NBER Macroeconomics annual 2000, 15: 261–325. Cambridge and London: MIT Press.
22.
Rodrik, D. (1992), ‘Closing the Productivity Gap: Does Trade Liberalization Really Help’, in G. Helleiner (ed.), Trade Policy, Industrialization and Development, pp. 155–75. Oxford: Clarendon Press.
23.
Rodrik, D. (2009), ‘Growth after the Crisis’, mimeo, Harvard Kennedy School. Cambridge, MA.
24.
Romer, P.M. (1994), ‘The Origins of Endogenous Growth’, Journal of Economic Perspectives, 8(1): 3–22.
25.
Söderbom, M. and F. Teal (2003), ‘Are Manufacturing Exports the Key to Economic Success in Africa?’, Journal of African Economies, 12(1): 1–29.
26.
Van Biesebroeck, J. (2005), ‘Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants’, Journal of International Economics, 67: 373–91.
27.
Wood, A. (1994), North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-driven World. Oxford: Clarendon Press.
28.
Young, A. (1991), ‘Learning by Doing and the Dynamic Effects of International Trade’, Quarterly Journal of Economics, 106(2): 369–405.
