Publication:
Allocative Efficiency between and within the Formal and Informal Manufacturing Sectors in Zimbabwe

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creativeworkseries.issn1564-698X
dc.contributor.authorKamutando, Godfrey
dc.contributor.authorEdwards, Lawrence
dc.date.accessioned2024-05-03T15:21:42Z
dc.date.available2024-05-03T15:21:42Z
dc.date.issued2023-11-10
dc.description.abstractResource misallocation has the potential to reduce aggregate total factor productivity and undermine industrial development. Aggregate productivity losses are found to be particularly pronounced in emerging economies where large market frictions impede efficient resource allocation. Available estimates, however, almost entirely exclude firms in the informal sector that in some countries, such as Zimbabwe, make up a high share of overall production and employment. The exclusion of informal firms can result in either an over- or under-estimate of the aggregate productivity losses from misallocation. This paper, therefore, uses firm-level survey data to analyze how market distortions contribute to the misallocation of resources within and between the formal and informal manufacturing sectors in Zimbabwe. Applying the approach developed by Hsieh and Klenow (2009) to firm-level microdata, the results reveal extensive resource misallocation in both the formal and informal manufacturing sector. Market shares of informal firms are found to be low relative to their productivity, an outcome associated with relatively large capital market distortions. Misallocation is also more pronounced among relatively productive firms, thus exacerbating aggregate losses in total factor productivity (TFP). Estimates indicate that aggregated gains in TFP of 151.4 percent can be realized through efficient resource allocation.en
dc.identifierhttp://documents.worldbank.org/curated/en/099701005032422927/IDU1e410ea9114a2714e581a87717ea7ce6bcdf4
dc.identifier.citationThe World Bank Economic Review
dc.identifier.doi10.1596/41490
dc.identifier.issn0258-6770 (print)
dc.identifier.issn1564-698X (online)
dc.identifier.urihttps://hdl.handle.net/10986/41490
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesWorld Bank Economic Review
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subjectMISALLOCATION
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectFORMAL AND INFORMAL SECTOR
dc.subjectMANUFACTURING
dc.subjectZIMBABWE
dc.subjectINDUSTRY, INNOVATION AND INFRASTRUCTURE
dc.subjectSDG 9
dc.titleAllocative Efficiency between and within the Formal and Informal Manufacturing Sectors in Zimbabween
dc.typeJournal Article
dspace.entity.typePublication
okr.associatedcontenthttps://academic.oup.com/wber/article/38/2/251/7405388 Journal website (version of record)
okr.crossref.titleAllocative Efficiency between and within the Formal and Informal Manufacturing Sectors in Zimbabwe
okr.date.disclosure2024-05-03
okr.date.lastmodified2024-05-03T00:00:00Zen
okr.doctypeJournal Article
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099701005032422927/IDU1e410ea9114a2714e581a87717ea7ce6bcdf4
okr.guid099701005032422927
okr.identifier.docmidIDU-e410ea91-4a27-4e58-a877-7ea7ce6bcdf4
okr.identifier.doi10.1093/wber/lhad034
okr.identifier.doihttps://doi.org/10.1596/41490
okr.identifier.externaldocumentum34312685
okr.identifier.internaldocumentum34312685
okr.identifier.report189829
okr.import.id4052
okr.importedtrueen
okr.language.supporteden
okr.pagenumber251-273
okr.pdfurlhttp://documents.worldbank.org/curated/en/099701005032422927/pdf/IDU1e410ea9114a2714e581a87717ea7ce6bcdf4.pdfen
okr.peerreviewAcademic Peer Review
okr.region.administrativeAfrica Eastern and Southern (AFE)
okr.region.countryZimbabwe
okr.topicIndustry::General Manufacturing
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.topicFinance and Financial Sector Development::Financial Regulation & Supervision
okr.unitEnterprise Analysis-WB (DECEA)
okr.volume38 (2)
relation.isJournalIssueOfPublication9346519d-8e5d-4804-921c-b1a3a6de2217
relation.isJournalIssueOfPublication.latestForDiscovery9346519d-8e5d-4804-921c-b1a3a6de2217
relation.isJournalOfPublicationc41eae2f-cf94-449d-86b7-f062aebe893f
relation.isJournalVolumeOfPublicatione61ff3e4-3429-4e9a-9ad1-6f7798ddae5b
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