This paper is written for the Research Programme Consortium for Institutions and Pro-Poor Growth and funded by UK DFID. We are grateful to participants at the IPPG workshop in Manchester, May 2007; and the ABCDE, Slovenia, May 2007 for helpful comments and suggestions. The views expressed in this paper are of the authors, and do not necessarily represent those of the ODI. Any errors and opinions expressed are the sole responsibility of the authors.
STATE-BUSINESS RELATIONS, INVESTMENT CLIMATE REFORM AND FIRM PRODUCTIVITY IN SUB-SAHARAN AFRICA†
Article first published online: 2 MAR 2012
Copyright © 2012 John Wiley & Sons, Ltd.
Journal of International Development
Volume 25, Issue 7, pages 912–935, October 2013
How to Cite
Saeed Qureshi, M. and te Velde, D. W. (2013), STATE-BUSINESS RELATIONS, INVESTMENT CLIMATE REFORM AND FIRM PRODUCTIVITY IN SUB-SAHARAN AFRICA. J. Int. Dev., 25: 912–935. doi: 10.1002/jid.2823
- Issue published online: 12 SEP 2013
- Article first published online: 2 MAR 2012
- Manuscript Accepted: 8 FEB 2012
- Manuscript Revised: 4 JAN 2012
- Manuscript Received: 14 DEC 2008
- state-business relations;
- firm performance;
- sub-Saharan Africa
This paper examines whether an effective state-business relationship, facilitated by an organised private sector, improves firm performance in seven sub-Saharan African countries: Benin, Ethiopia, Madagascar, Malawi, Mauritius, South Africa and Zambia. The findings reveal that, on average, state-business relationships enhance firm productivity by about 25–35 per cent in sub-Saharan African firms. This effect appears to set in through an improved investment climate—including reduced corruption, better provision of public utilities and information technology development—and higher labour productivity. These gains are not confined to small and medium sized firms but have a similar positive impact on large firms. Further, both domestic and foreign-owned firms appear to benefit from joining business associations, although the impact is somewhat larger for the latter. Copyright © 2012 John Wiley & Sons, Ltd.