Technology gap,imported capital goods and productivity of manufacturing plants in Sub-Saharan Africa |
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| Authors: | Eugene Bempong Nyantakyi |
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| Institution: | 1. The African Development Bank Group, Development Research Department, Abidjan, C?te d'Ivoire;2. Salisbury University, Salisbury, United States. The findings, interpretations and conclusions expressed herein are those of the authors and do not necessarily reflect the view of the African Development Bank Group, its Board of Directors or the governments they represent. |
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| Abstract: | This paper uses firm-level data from Ghana, Tanzania and Kenya to examine the effect of capital goods imports on domestic firms' productivity, and the role firms' technology gap plays in aiding the transmission of knowledge embodied in capital goods to domestic firms. The results show that increasing imports of capital goods and closing technology gaps have positive effects on productivity. Furthermore, domestic firms with technology standards farther from international best practices benefit more from capital goods imports. The results also imply that trade liberalization policy aimed at eliminating tariffs on capital goods will significantly improve the performance of technically incompetent firms in the African manufacturing sector. |
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| Keywords: | Capital goods technology gap productivity Sub-Saharan Africa |
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