Industrialization on a Knife's Edge : Productivity, Labor Costs and the Rise of Manufacturing in Ethiopia
The latest push for industrialization in Ethiopia has attracted much academic and public interest. This paper assesses Ethiopia's competitiveness and attractiveness as an investment destination by comparing domestic productivity and input cost...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/178101565704130455/Industrialization-on-a-Knifes-Edge-Productivity-Labor-Costs-and-the-Rise-of-Manufacturing-in-Ethiopia http://hdl.handle.net/10986/32273 |
| Summary: | The latest push for industrialization in
Ethiopia has attracted much academic and public interest.
This paper assesses Ethiopia's competitiveness and
attractiveness as an investment destination by comparing
domestic productivity and input costs to a sample of
manufacturing exporting countries. The paper documents
that, in a comparison with Kenya, India or Vietnam, the
labor cost advantage of Ethiopian firms is more than offset
by low productivity. However, Ethiopia appears competitive
when compared to Bangladesh. Capital, firm size, or sectoral
composition do not explain the low productivity of the
Ethiopian manufacturing sector. Ethiopian firms, however,
have worse management, particularly in the area of labor
management. The paper concludes by discussing the potential
for labor interventions to increase productivity and create
the condition for further industrialization. |
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