TY - JOUR
T1 - A tale of industrial stagnation from Africa
AU - Dagdeviren, Hulya
AU - Mahran, H.A.
N1 - Original article can be found at: http://www.tandfonline.com/ Copyright Taylor & Francis
PY - 2010
Y1 - 2010
N2 - Many African economies have experienced rather dismal industrial development since the 1980s. The consensus is that African firms lack competitiveness in a world with increasing trade openness. What determines competitiveness? A well-known explanation is that resource endowments in Africa favour land not labour, which results in high wages, especially in comparison with 'labour abundant' Asian economies. This paper examines the validity of this view on the basis of the case of Sudan. We demonstrate that the lack of competitiveness of manufacturing industries is not caused by high wages. Assuming a direct relationship between labour productivity and international competitiveness, we argue that acute capacity underutilisation, caused by supply-side constraints, lowers manufacturing productivity, which in turn negatively influences competitiveness.
AB - Many African economies have experienced rather dismal industrial development since the 1980s. The consensus is that African firms lack competitiveness in a world with increasing trade openness. What determines competitiveness? A well-known explanation is that resource endowments in Africa favour land not labour, which results in high wages, especially in comparison with 'labour abundant' Asian economies. This paper examines the validity of this view on the basis of the case of Sudan. We demonstrate that the lack of competitiveness of manufacturing industries is not caused by high wages. Assuming a direct relationship between labour productivity and international competitiveness, we argue that acute capacity underutilisation, caused by supply-side constraints, lowers manufacturing productivity, which in turn negatively influences competitiveness.
U2 - 10.1080/02692171.2010.483792
DO - 10.1080/02692171.2010.483792
M3 - Article
SN - 1465-3486
VL - 24
SP - 495
EP - 510
JO - International Review of Applied Economics
JF - International Review of Applied Economics
IS - 4
ER -