Determinants of Labor Productivity Among Smes and Large‐sized Private Service Firms in Kenya
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Date
2020Author
Amutabi, Cyprian
Wambugu, Anthony
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Using the 2018 World Bank enterprise data, this study sought to establish
whether the determinants of labor productivity in the Kenyan private service
sector varied with the size of the firm. Unlike previous studies that just focus
on the determinants of labor productivity among manufacturing firms; this
study employed the two‐stage switching regressions model to correct for the
firm‐size effect. The findings revealed that capital intensity, employee wage,
high school education, and managers' experience impacted positively and
significantly on labor productivity while tax burden and power outages significantly
decreased labor productivity across all firms. The differences in the
determinants of labor productivity across both firms were, however, found to
be negligible and insignificant. With the political uncertainty and tax burden
constraints perennially defining the Kenyan economy, the study recommended
the provision of a favorable business environment and investment in human
capital as key channels of optimizing service sector productivity. The
selectivity variable was also significant across both firms, hence supporting
the role of self‐selection in labor productivity studies. Correcting for the firmsize
effect was very crucial; something that has been largely ignored in
previous studies on labor productivity.
URI
https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8268.12463http://erepository.uonbi.ac.ke/handle/11295/161297
Citation
Amutabi, Cyprian, and Anthony Wambugu. "Determinants of labor productivity among SMEs and large‐sized private service firms in Kenya." African Development Review 32.4 (2020): 591-604.Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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