Productivity in Small Business: An Analysis Using African Data

Abstract

Labor and floorspace cost functions are derived for small business trade. Relationships are proposed between average volume of labor or average floorspace per establishment on the one hand, and average size per establishment, average rental paid, percentage selling space, and indicators of business type and location on the other. Promising estimation results are reported using South African data of 1979/1980. The method however Is not restricted to the South African case. A productivity business support system can be developed providing productivity standards for any area in the small (service) business. An analysis similar to the one presented here, but relating to the area in question, should precede the development of such a system.