Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in...
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okr-10986-360722021-08-07T05:10:29Z Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms towards low-productivity ones, although the magnitude differs across countries. Estimated aggregate productivity gains from the hypothetical equalization of marginal returns range from 30 percent in Côte d’Ivoire to 160 percent in Kenya. The magnitude of reallocation gains appears considerably lower when performing the same counterfactual exercise based on the World Bank Enterprise Surveys once the value-added shares of industries are adjusted using the census data. This suggests that linking firm-level survey data to aggregate outcomes requires census-type data or sampling methods that take the true structure of production into account. 2021-08-06T16:59:12Z 2021-08-06T16:59:12Z 2020-02 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/36072 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article Africa Sub-Saharan Africa |
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DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS |
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DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
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Africa Sub-Saharan Africa |
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This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms towards low-productivity ones, although the magnitude differs across countries. Estimated aggregate productivity gains from the hypothetical equalization of marginal returns range from 30 percent in Côte d’Ivoire to 160 percent in Kenya. The magnitude of reallocation gains appears considerably lower when performing the same counterfactual exercise based on the World Bank Enterprise Surveys once the value-added shares of industries are adjusted using the census data. This suggests that linking firm-level survey data to aggregate outcomes requires census-type data or sampling methods that take the true structure of production into account. |
format |
Journal Article |
author |
Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret |
author_facet |
Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret |
author_sort |
Cirera, Xavier |
title |
Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
title_short |
Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
title_full |
Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
title_fullStr |
Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
title_full_unstemmed |
Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa |
title_sort |
taxing the good? distortions, misallocation, and productivity in sub-saharan africa |
publisher |
Published by Oxford University Press on behalf of the World Bank |
publishDate |
2021 |
url |
http://hdl.handle.net/10986/36072 |
_version_ |
1764484369039228928 |