Does the Presence of Foreign Firms Reduce Domestic Firms’ Financial Constraints in Sub-Saharan Africa?†

2019 ◽  
Vol 28 (4) ◽  
pp. 343-370
Author(s):  
Habtamu Tesfaye Edjigu ◽  
Nicholas Sim
Keyword(s):  
Financial Constraints ◽  
Foreign Firm ◽  
Bank Loans ◽  
Sub Saharan Africa ◽  
Foreign Firms ◽  
African Countries ◽  
Firm Level ◽  
Domestic Firms ◽  
Level Data ◽  
Sub Saharan

Abstract Firms in the SSAs (sub-Saharan African countries for short) face severe financial constraints. Because financial markets in the SSAs are underdeveloped, policymakers have sought after the establishment of foreign-owned firms in their countries to help, among others, alleviate the financial constraints faced by domestic firms. However, there is no empirical evidence that speaks to the association between foreign firm presence and domestic firms’ financial constraint. Using firm-level data spanning across 36 SSAs from the World Bank Enterprise Survey, we show that the increase in foreign firm presence can ease the financial constraints of domestic firms in the SSAs. One reason is that foreign-owned firms are not only less financially constrained, they are also less likely to apply for bank loans. Therefore, an increase in foreign firm presence may reduce the competition for loans and ease the financial constraints of domestic firms by improving their borrowing success.

scholarly journals Competition, Competitiveness and Growth in Sub-Saharan Africa

2020 ◽  
Vol 20 (30) ◽  
Author(s):  
Reda Cherif ◽  
Sandesh Dhungana ◽  
Xiangming Fang ◽  
Jesus Gonzalez-Garcia ◽  
Yuanchen Yang ◽  
...  
Keyword(s):  
Manufacturing Sector ◽  
Emerging Market ◽  
Market Competition ◽  
Sub Saharan Africa ◽  
Foreign Firms ◽  
African Countries ◽  
Firm Level ◽  
Real Gdp Per Capita ◽  
Sub Saharan ◽  
Labor's Share

Does greater product market competition improve external competitiveness and growth? This paper examines this question by using country-and firm-level data for a sample of 39 sub-Saharan African countries over 2000–17, as well as other emerging market economies and developing countries, and finds that an improvement in domestic competition is associated with a signficant increase in real GDP per capita growth rate, achieved mainly through an improvement in export competitiveness and productivity growth. Price levels, including of essential items, are also generally lowered with an increase in competition. Moreover, at the firm-level, evidence shows that greater competition—proxied through a decline in corporate market power—is associated with an increase in firm’s investment and the labor’s share in output. These effects are more pronounced in the manufacturing sector and among domestic firms compared to foreign firms.

scholarly journals Job Quality, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data

2019 ◽  
Vol 31 (5) ◽  
pp. 1287-1317 ◽  
Author(s):  
Sotiris Blanas ◽  
Adnan Seric ◽  
Christian Viegelahn
Keyword(s):  
Job Quality ◽  
Sub Saharan Africa ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Sub Saharan

scholarly journals Does Financial Liberalisation Improve Access to Investment Finance in Developing Countries?

2014 ◽  
Vol 5 (1) ◽  
Author(s):  
Conor M. O’Toole
Keyword(s):  
Sub Saharan Africa ◽  
Securities Market ◽  
State Control ◽  
Firm Level ◽  
Financial Flows ◽  
Reserve Requirements ◽  
Level Data ◽  
Financial Liberalisation ◽  
Sub Saharan ◽  
Market Liberalisation

AbstractThis paper considers the effect of financial liberalisation on access to investment finance using firm level data covering 48 developing and transition countries. An index is presented which measures financial market liberalisation along the following policy dimensions: directed lending, credit controls and reserve requirements, state control of banking, openness of international financial flows, banking market entry, prudential regulation and supervision and securities market development. Categorising firms as financially constrained across four measures, the results indicate that financial liberalisation is robustly associated with a reduction in the probability of being credit constrained, with the effect strongest for young, domestic private small and medium sized enterprises. For Sub-Saharan Africa, the results indicate that financial liberalisation actually increases financing constraints for firms. This may help explain the stylised fact that despite a commitment to financial reform, the predicted growth benefits have not been realised in this region.

scholarly journals Problems and prospects of financing innovative development in sub-Saharan African countries

2019 ◽  
Vol 2019 (4) ◽  
pp. 59-67
Author(s):  
Tijani Alhassan
Keyword(s):  
Financial Services ◽  
Financial Integration ◽  
Financial System ◽  
Bank Loans ◽  
Sub Saharan Africa ◽  
Financial Resources ◽  
Innovative Development ◽  
African Countries ◽  
Sub Saharan

The article discusses the place and role of the financial system in the development of national economic systems in developing countries. There have been identified the main func-tions of the financial system: mobilizing financial resources, creating a database of investment projects and investors, monitoring and corporate deposit management, forming a block of information on diversification, transformation and risk management, facilitating the sale of goods through a payment system. The existing approaches to determining the concept of accessibility of financial resources are considered. The role of the financial sector in advancing technological innovations and industrialization in sub-Saharan African countries has been identified. The analysis of reasons for low financial integration, low access to financial services in the shadow economy has been carried out. The main reasons for the lack of access to banking services include the language barrier, lack of simple identification documents or data due to a poorly organized local infrastructure. It is noted that about 52% of the population of sub-Saharan Africa have access to formal financial services; 65% of small, medium and micro-enterprises (90% of the economic sector in Africa) do not have access to bank loans. Research and development expenditures in the economic regions have been systematized. The conclusions have been made about the underdevelopment and lag of infrastructure in sub-Saharan African countries, low availability of financial resources retarding the economic growth and innovative development of small and medium-sized businesses. Possibilities for improving the systems of financial innovative development in the investigated countries have been given.

scholarly journals FDI, Global Value Chains, and Local Sourcing in Developing Countries

2017 ◽  
Vol 17 (284) ◽  
Author(s):  
Vito Amendolagine ◽  
Andrea Presbitero ◽  
Roberta Rabellotti ◽  
Marco Sanfilippo ◽  
Adnan Seric
Keyword(s):  
Global Value Chains ◽  
Value Chains ◽  
Data Sets ◽  
Host Countries ◽  
African Countries ◽  
Firm Level ◽  
Foreign Investors ◽  
Level Data ◽  
Sub Saharan ◽  
Local Sourcing

The local sourcing of intermediate products is one the main channels for foreign direct investment (FDI) spillovers. This paper investigates whether and how participation and positioning in the global value chains (GVCs) of host countries is associated to local sourcing by foreign investors. Matching two firm-level data sets of 19 Sub-Saharan African countries and Vietnam to country-sector level measures of GVC involvement, we find that more intense GVC participation and upstream specialization are associated to a higher share of inputs sourced locally by foreign investors. These effects are larger in countries with stronger rule of law and better education.

Household services, social norms and bribe involvements? Evidence from Sub-Saharan Africa

2020 ◽  
Vol 19 (2) ◽  
pp. 229-253
Author(s):  
Edward Asiedu
Keyword(s):  
Gender Differences ◽  
Social Norms ◽  
Public Utility ◽  
Sub Saharan Africa ◽  
Cultural Norms ◽  
Government Officials ◽  
African Countries ◽  
Content Type ◽  
Level Data ◽  
Sub Saharan

Purpose Understanding the drivers of corruption involvement is critical for the design of interventions aimed at reducing the incidence of corruption and easing the process of obtaining services. In many developing countries particularly in sub-Saharan Africa, traditional cultures dictate that women are responsible for performing physically demanding household chores such as fetching water, collecting and carrying firewood over long distances. This paper aims to examine the implications of these social norms on bribe involvements in sub-Saharan Africa. Design/methodology/approach This study uses micro-level data on bribe involvement across 20 sub-Saharan African countries. It also applies multiple estimation approaches to correct for differences in exposure to government officials, which then allows for estimating the gender differences in bribe involvement. Probit, Heckman selectivity and Lee bound estimation approaches are adopted for the purpose. Findings The author find that social norms impact bribe involvement of men and women in sub-Saharan Africa. Specifically, the author find lower involvement of men in bribery in sub-Saharan when household services, are at stake compared to other services. In effect the gender differences in bribe involvement, even though robust for other services that are not household related, disappears when household services are at stake. The author shed light on how social and cultural norms could impact bribery outcomes. Originality/value Findings from this study shows that inefficiencies in public utility delivery in sub-Sahran Africa can create antisocial behavior and that interventions geared toward improvement access to utility can reduced inequality in access to services.

scholarly journals Stalls in Africa’s fertility decline partly result from disruptions in female education

2019 ◽  
Vol 116 (8) ◽  
pp. 2891-2896 ◽  
Author(s):  
Endale Kebede ◽  
Anne Goujon ◽  
Wolfgang Lutz
Keyword(s):  
Educational Attainment ◽  
Sub Saharan Africa ◽  
Population Projections ◽  
Demographic And Health Surveys ◽  
Childbearing Age ◽  
African Countries ◽  
Individual Level ◽  
Period Effects ◽  
Level Data ◽  
Sub Saharan

Population projections for sub-Saharan Africa have, over the past decade, been corrected upwards because in a number of countries, the earlier declining trends in fertility stalled around 2000. While most studies so far have focused on economic, political, or other factors around 2000, here we suggest that in addition to those period effects, the phenomenon also matched up with disruptions in the cohort trends of educational attainment of women after the postindependence economic and political turmoil. Disruptions likely resulted in a higher proportion of poorly educated women of childbearing age in the late 1990s and early 2000s than there would have been otherwise. In addition to the direct effects of education on lowering fertility, these less-educated female cohorts were also more vulnerable to adverse period effects around 2000. To explore this hypothesis, we combine individual-level data from Demographic and Health Surveys for 18 African countries with and without fertility stalls, thus creating a pooled dataset of more than two million births to some 670,000 women born from 1950 to 1995 by level of education. Statistical analyses indicate clear discontinuities in the improvement of educational attainment of subsequent cohorts of women and stronger sensitivity of less-educated women to period effects. We assess the magnitude of the effect of educational discontinuity through a comparison of the actual trends with counterfactual trends based on the assumption of no education stalls, resulting in up to half a child per woman less in 2010 and 13 million fewer live births over the 1995–2010 period.

Crowdsourcing Covid-19 signals in sub-Saharan Africa: Leveraging digital contributor networks for participatory surveillance of Covid-19 symptoms and deaths (Preprint)

2020 ◽  
Author(s):  
Ngozi A Erondu ◽  
Sagal A Ali ◽  
Mohamed Ali ◽  
Schadrac C Agbla
Keyword(s):  
Public Health ◽  
Sub Saharan Africa ◽  
Specific Information ◽  
Surveillance Systems ◽  
Health Seeking ◽  
African Countries ◽  
Cross Sectional Survey ◽  
Local Networks ◽  
The World ◽  
Sub Saharan

BACKGROUND In sub-Saharan Africa, underreporting of cases and deaths has been attributed to various factors including, weak disease surveillance, low health-seeking behaviour of flu like symptoms, and stigma of Covid-19. There is evidence that SARS-CoV-2 spread mimics transmission patterns of other countries across the world. Since the Covid-19 pandemic has changed the way research can be conducted and in light of restrictions on travel and risks to in-person data collection, innovative approaches to collecting data must be considered. Nearly 50% of Africa’s population is a unique mobile subscriber and it is one of the fastest growing smart-phone marketplaces in the world; hence, mobile phone platforms should be considered to monitor Covid-19 trends in the community. OBJECTIVE We demonstrate the use of digital contributor platforms to survey individuals about cases of flu-like symptoms and instances of unexplained deaths in Ethiopia, Kenya, Nigeria, Somalia, and Zimbabwe. METHODS Rapid cross-sectional survey of individuals with severe flu and pneumonia symptoms and unexplained deaths in Ethiopia, Kenya, Nigeria, Somalia and Zimbabwe RESULTS Using a non-health specific information platform, we found COVID-19 signals in five African countries, specifically: •Across countries, nearly half of the respondents (n=739) knew someone who had severe flu or pneumonia symptoms in recent months. •One in three respondents from Somalia and one in five from Zimbabwe respondents said they knew more than five people recently displaying flu and/or pneumonia symptoms. •In Somalia there were signals that a large number of people might be dying outside of health facilities, specifically in their homes or in IDP or refugee camps. CONCLUSIONS Existing digital contributor platforms with local networks are a non-traditional data source that can provide information from the community to supplement traditional government surveillance systems and academic surveys. We demonstrate that using these distributor networks to for community surveys can provide periodic information on rumours but could also be used to capture local sentiment to inform public health decision-making; for example, these insights could be useful to inform strategies to increase confidence in Covid19 vaccine. As Covid-19 continues to spread somewhat silently across sub-Saharan Africa, regional and national public health entities should consider expanding event-based surveillance sources to include these systems.

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