Labour Productivity in Kenyan Manufacturing and Service Industries

Chapter

Abstract

Labour productivity reflects a firm’s ability to generate higher production or value-added. This paper analyses labour productivity and its determinants in the manufacturing and service sectors in Kenya. As the largest economy in East Africa, it is crucial for Kenya to have high labour productivity as it has strong implications for economic growth and welfare. The paper also provides practitioners with a better understanding of the state of labour productivity in the country. Using the World Bank’s Enterprise Survey’s database for 2013, we find that capital intensity and wage significantly and positively affected labour productivity. A higher female share in the labour force reduced labour productivity. We also found that training and education were associated with higher labour productivity. Reliance on technologies such as emails and websites for communication had a positive but insignificant impact on firms’ labour productivity. On the basis of these observations we make a number of recommendations to promote higher productivity of labour.

Keywords

Labour market Labour productivity Manufacturing Services Firms Kenya 

JEL Classification Codes

J01 J16 J24 L60 O14 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.Department of EconomicsSogang UniversitySeoulKorea
  2. 2.Jönköping International Business SchoolJönköping UniversityJönköpingSweden
  3. 3.Department of Agricultural EconomicsUniversity of TabrizTabrizIran

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