Browsing by Author "Alemayehu, Worku Gebeyehu"

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    Trade regime changes and manufacturing performance in Ethiopia
    (University of Dar es Salaam, 2015) Alemayehu, Worku Gebeyehu
    The main objective of the dissertation is to estimate firm level total factor productivity, firm mark-up, workers’ bargaining power parameter and variable input-based mark-ups and assess their magnitudes across different groups of firms and during and after trade reform periods. Based on unbalanced panel data of 8395 Ethiopian manufacturing firms engaging 10 or more persons between 1996 and 2007, total factor productivity is estimated using Olley and Pakes (1996) and Yasar, et al (2008) because of its advantage of addressing simultaneity and selection bias. Using unbalanced panel data of 1663 firms employing more than 100 permanent workers, mark-up, bargaining power parameter and also variable input-based mark-up models were estimated through Linear Dynamic Panel Data Method. Consistent with the expected hypothesis of heterogeneous performance, state-owned, import-intensive, exporting, incumbent and large-scale firms are found to be more productive than their counterparts during the entire period. Total factor productivity increased during the post-reform period at the sectoral level. On average, firms made positive mark-up and it rather increased after the reform as against the apriori expectations. Mark-up is higher in state-owned enterprises than private firms. Bargaining power of workers is negative, albeit improving during post reform, implying that workers get below their due reward. Thus, further trade reform may improve the performance of the sector provided that heterogeneous responses of firms are seriously taken into account and bottlenecks holding back the performance of domestic resource based industries, medium sized firms and privately owned establishments in particular are duly addressed. It is also imperative to further improve conditions to create additional job opportunities in the economy, strengthening trade unions and addressing capacity utilization of firms for workers to be optimally engaged and also get their reward.