Publication

This paper examines whether African firms are creating fewer jobs than those located elsewhere and, if so, why. Using data from 41,000 firms across 119 countries the authors find that African firms tend to be 20–24 percent smaller than firms in other regions of the world. They argue that there are a number of reasons why this is so. These include the poor business environment, limited access to financing, and poor access to electricity, land, and unskilled labor. They also find that foreign ownership, the export status of firms, and the size of the market are significant determinants of firm size.