Slide 1

Report
Brief description of own African
related research activities
Mulu Gebreeyesus
UNU-MERIT
Presentation on
Africa Research in UNU-MERIT Workshop
October 21, 2011,
Maastricht
1. Agglomeration/trade opening and firm productivity in
Ethiopian manufacturing
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This is a collaborative project with Gothenburg University, Sweden
It is based on a decade long firm level census data in Ethiopian manufacturing and constitutes
three separate topics
1.1. Firm productivity and Exports (with Arne Bigsten - JDS, 2009)
• This paper examines the causal relationship between exporting and productivity.
• We find strong evidence of not only self-selection but also learning-by-exporting.
1.2. The response of firm performance to gradual trade liberalization (with Arne Bigsten and
Mans Soderbom - working paper, CSAE Oxford)
• It examines the effect of trade liberalization on firm performance during 1997-2005
• We find relatively large effects of tariff reductions on total factor productivity.
1.3. Agglomeration effects in Ethiopian manufacturing (with Arne Bigsten, Mans Soderbom, and
Eyerusalem Siba)
• It analyses the effect of agglomeration on two key determinants of firm performance;
productivity and output prices.
• We find statistically significant effect of agglomeration of firms on prices, suggesting that new
entry leads to higher competitive pressure in the local economy.
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We also find a positive and statistically significant effect of agglomeration on productivity
which is consistent with the notion of positive externalities.
2. The impact of export promotion on selected sectors
in Ethiopia
2.1. Financing Constraints and Industry Promotion: the case of the Garment
Industry in Ethiopia (with Tetsushi Sonobe, and Keijiro Otsuka, GRIPS,
Japan)
– Preferential financing simply leads to a large debt unaccompanied by a sufficiently
large amount of working capital.
– The shortage of working capital results in a limited opportunity for learning by
doing because the operation size is small.
2.2. Discovery of Flower Industry in Ethiopia: Experimentation and
Coordination (with Michiko, UNU-MERIT) – /forthcoming JGD/
– This paper examines the discovery process of a recent and extremely successful
non-traditional export activity in Africa – the Ethiopian flower industry
– It highlights the importance of a shared vision and good relations between the
government and private sector for development of this new industry.
2.3. Governance of global value chain and market formation in Ethiopian
floriculture (with Tetsushi Sonobe GRIPS, Japan) /forthcoming JDS/
– This paper analyze the impact of increasing standards and delivery requirements in EU
floriculture market on capability of African suppliers based on case study of Ethiopian
flower industry
3. Innovation in the informal sector
3.1. The relation between micro-enterprises growth and innovative
and entrepreneurial attributes /book chapter/
– This paper addresses two prominent issues on the development of
small enterprises in Africa. What factors inhibit or foster innovation
activities in small enterprises? Do innovators create more jobs?
– It relies on a large set of micro-enterprises survey data from Ethiopia
that comprise 1000 observations with 10 and fewer workers.
3.2. Innovation performance and embeddedness in networks: evidence from
the Ethiopian footwear cluster (with Pierre) – working paper UNU-MERIT
– This study provides empirical evidence on the impact of firm
heterogeneity in embeddedness in networks and absorptive capacity on
innovation performance of firms.
– It revealed that despite homogeneity in social background the firms in the
cluster behave and perform differently.
– We documented a positive and strong effect of local network position and
absorptive capacity of the firm on innovation performance.
The impact of the T&C quota removal on global
export flow (ongoing work)
• It has been five years since the removal of the long awaited quota
on Textile and Clothing in 2005.
• This project examines the impact of quota removal on global
apparel export flow and the relative performance of quota
constrained and preferentially treated countries in the post-quota
period.
– The performance of SSA countries that have preferential treatment
under AGOA in the US market and under EBA in the EU market is also
analyzed
• A separate analysis in both the US and EU apparel imports show
that the previously quota constrained countries increased their
export substantially in the post-quota period. In contrast, the
preferred and FTA countries show poor performance the largest
losers being AGOA and EBA countries.
Learning to Compete (L2C): Accelerating Industrial
Development in Africa
• It is a collaborative undertaking of UNU-WIDER, Brookings
Institution, and African Development Bank (AfDB) – (2011-2013)
– It is a project of comparative study of 10 African countries plus 2 other
South Asian countries.
– I am principal investigator for the Ethiopian country team
• One dimension of the research is thematic, resting on a common
quantitative and qualitative approach to addressing such issues as:
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What is the role of exports in industrialization?
Will lack of skills constrain Africa’s ability to compete?
Can industrial clusters boost competitiveness?
Can foreign direct investment build Africa’s industrial capability?
• The second dimension is a detailed country study on
industrialization process and the evolution of public policies to
influence industrial development.

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