Market frictions, allocative efficiency and aggregate productivity in the manufacturing sector: evidence from Zimbabwe

Type Thesis or Dissertation - Phd Thesis
Title Market frictions, allocative efficiency and aggregate productivity in the manufacturing sector: evidence from Zimbabwe
Author(s)
Publication (Day/Month/Year) 2020
URL https://open.uct.ac.za/bitstream/handle/11427/33825/thesis_com_2021_kamutando godfrey​paradzai.pdf?sequence=1&isAllowed=y
Abstract
Underdevelopment arises not only from the lack of production resources such as capital and labour but also as a consequence of the inefficient allocation of available resources. Reducing the misallocation of resources is, therefore, seen as one of the channels through which substantial increases in aggregate productivity and incomes of emerging economies can be achieved. This thesis analyses how market distortions contribute to the misallocation of resources within and between the formal and informal manufacturing sectors in Zimbabwe. The thesis is structured around three main research objectives. Firstly, it quantifies the extent of allocative inefficiency within and between the formal and informal manufacturing firms in Zimbabwe. Secondly, it investigates the extent to which financial access constraints contribute to misallocation and hinder firm performance. Finally, it tests for labour market segmentation within and between formal and informal manufacturing sectors as a source of labour
misallocation. To conduct the analysis, the thesis draws on the recently available Matched Employer-Employee manufacturing firm-level survey dataset for formal and informal sector firms and workers that was conducted between 2015 and 2018 as part of this thesis. These surveys
provide unique data on firm production activities and on worker wages and characteristics that allow for the analysis of resource misallocation and its sources in Zimbabwe.

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