Competitive analysis of EAC manufacturing firms: technical efficiency and labour productivity

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University of Dar es salaam
The study uses firm level cross sectional data with recall questions to investigate three issues in East African manufacturing firms-the role of human capital in explaining labor productivity; presence of learning by-exporting and self-selection effects; and association between firm size and technical efficiency. The study uses random effects to estimate the productivity, technical efficiency, and export participation models. This study provides new empirical evidence on the sources of technical efficiency and labour productivity on Uganda and Tanzania that have not been part of intense research on these issues in a number of other African countries, including Kenya, covered by earlier World Bank data collection effort. Results show that proportion of skilled workers, average age of workers and average education in Uganda, proportion of skilled workers in Tanzania and average education, proportion of skilled workers and training in Kenya are positively associated with labour productivity. Contrary to our expectation, the results show a negative association between firm size and technical efficiency in Ugandan manufacturing firms. On the causal relationship between exporting activity and technical efficiency, the results show no evidence for self-selection and learning by exporting hypothesis in all the East African manufacturing firms except in Uganda where there was evidence in support for learning by exporting hypothesis. These results have important policy implications for targeting policy prescriptions to increase manufacturing competitiveness.
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Manufacturing industry, Manufacturers, East African Community, Labor productivity
Niringiye, A (2012),Competitive analysis of EAC manufacturing firms: technical efficiency and labour productivity , master dissertation, University of Dar es Salaam (available at