Technical efficiency, technological progress and productivity growth of large and medium manufacturing industries in Ethiopia: A data envelopment analysis

Erena, Obsa Teferi; Kalko, Mesfin Mala; Debele, Sara Adugna

doi:10.1080/23322039.2021.1997160

Cited by 13 publications

(14 citation statements)

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“…This finding is also in agreement with a study done in Ethiopia which suggests that shortage of raw materials was the main cause of the relative technical inefficiency of the sector (Erena, Kalko, & Debele, 2021;Hailu & Tanaka, 2015). Another study in Nigeria by Ekwochi, Ejim, and Agbaji (2021) found that working capital management has an impact on the productivity of manufacturing.…”

Section: Discussionsupporting

confidence: 90%

Binary logistic regression analysis on determinants of capacity utilization in medium and large manufacturing industries in Ethiopia

Yohannes¹,

Matebu²,

Asrat³

2023

5008

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Most manufacturing industries in Ethiopia are not operating at full capacity. The manufacturing industry is one of the main determinants of the economic growth of a country; therefore, the reasons why they are not operating at full capacity have to be assessed. The aim of this study is to assess determinant factors associated with Ethiopia’s large and medium manufacturing industries (henceforth referred to as LMMIs in this study) not working at full capacity based on 2020 LMMI survey data. In this study, 3,067 large and medium manufacturing industries were examined. Among these industries, 78.71% were not working at their full capacity, while the remaining 21.29% were. Binary logistic methods were used to analyze the data. Study results found that the region, the number of months the establishment operated during the study period, the workplace of the manufacturing company, the effect of Covid-19, and the current most serious problem facing the establishment were statistically significant predictors for working at full capacity. LMMI intervention programs, including regional work, increasing the number of working months in the year, workplace, the effect of unexpected external influences (e.g., COVID-19) and major problems among LMMIs, should be put in place to increase the production to full capacity.

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Section: Discussionsupporting

confidence: 90%

Binary logistic regression analysis on determinants of capacity utilization in medium and large manufacturing industries in Ethiopia

Yohannes¹,

Matebu²,

Asrat³

2023

5008

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“…shortages of foreign currency, high rates of employee turnover and poor infrastructures such as electricity, roads, water and telecommunication. These issues are common problems for all sectors of the economy, particularly in developing countries (Erena et al, 2021). The policy has ignored the powerful internal antecedents of innovation like organizational factors (such as leadership, management support, culture and structure).…”

Section: Introductionmentioning

confidence: 99%

“…Similarly, a five-year (2019)(2020)(2021)(2022)(2023)(2024) innovation policy of the African Union has emphasized external factors in promoting innovation to sustain industrial growth and considers it a crucial device for building up market share and wealth creation, which may assist companies to survive (Freeman, 1995;Furman et al, 2002). On the other hand, empirical evidence shows that the Ethiopian manufacturing sector has been characterized by low technological knowhow, shortage of skilled manpower, less knowledge about the industry, lower rates of technological products and innovation, weak inter-and intra-sectorial linkages and weak linkages with universities and research institutions (Wakeford et al, 2017;Oqubay, 2018;UNDP, 2018;Erena et al, 2021). UNCTAD (2015) evident that local firms' capacity to take advantage of opportunities both inside Ethiopia and in other emerging markets is hampered by a lack of access to and sharing of research and development (R&D) facilities.…”

Section: Introductionmentioning

confidence: 99%

Organizational factors, knowledge management and innovation: empirical evidence from medium- and large-scale manufacturing firms in Ethiopia

Erena

Kalko

Debele

2022

JKM

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Purpose The purpose of this study is to empirically investigate the mediating role of knowledge management (KM) in the linkage between organizational factors, namely, organizational culture (OGCUL) and leadership and management support (LMS) and innovation in medium- and large-scale manufacturing firms in Ethiopia. Design/methodology/approach A sample of 200 firms has been used to gather data using simple random sampling and to test the proposed hypotheses. Structural equation modeling and cross-sectional design were used to analyze the data using LISREL 8.80 SIMPLIS program software tool. Findings Organizational factors (i.e. OGCUL and LMS) are positively associated with KM and innovation. KM constructs, namely, knowledge sharing, knowledge conversion and knowledge storage, have a significant positive influence on innovation. Knowledge sharing mediates the relationship between organizational factors and innovation. Research limitations/implications This study has three potential limitations: first, this study is based on a cross-sectional research design. Future research should include longitudinal design to get in-depth insights into the causal inferences. Second, only a few Ethiopian medium- and large-scale manufacturing firms were included in the sample. As a suggestion for future research, other researchers can include small-scale enterprises using large sample sizes and should examine the effects of organizational factors, KM and innovation across different industries. Finally, this study has only focused on investigating the mediating role of knowledge sharing between organizational factors and innovation. Future research should test the mediating role of the KM process and its constituents (knowledge acquisition, knowledge conversion, knowledge sharing and knowledge storage) between organizational factors and specific aspects of innovation to gain a full understanding of the critical role of KM in organizational innovation. Practical implications The findings of this study would serve as a guide for policy-makers and managers of manufacturing firms in developing countries in the formulation of policies and long-term strategies. It may also provide a better understanding of the causal relationship between organizational factors, KM and innovation, which in turn has value to directors and managers in manufacturing firms in developing countries as a reference for building a good OGCUL, serving as practical guidance for effective leadership and providing organizational or management support. Specifically, the findings would have the following practical implications: first, firms need to have a combination of KM processes (such as acquisition, storage, sharing and conversion). In practice, developing countries such as Ethiopia have based their innovation strategy on knowledge and technology acquisition through encouraging foreign direct investment. It is not in doubt that Ethiopia has been benefiting from the strategy as a lot of foreign companies have opened their subsidiaries in the country. However, in the authors’ view, more emphasis on knowledge acquisition strategy would not take a firm a long time to sustain its innovative activity because it is likely available to firms operating in the same industry, as well as it may hurt a firm’s competitive advantage. In addition, by its nature, knowledge may not be retained for future use; it may expire soon. Second, the current highly impulsive and rapid change in the business environment changes the way firms have to operate and deliver products or services. Knowledge (both tacit and explicit) is a resource that can provide a competitive advantage if used well for the intended purpose. In real practice, firms often face challenges in determining where to get knowledge from and how to value or manage it. Besides, knowledge can be obtained from three sources: knowledge can exist in individuals’ minds (skills, experience, ideas and insight); knowledge can dwell in a group, which we can call collective knowledge (a team of scientists or researchers); and knowledge can be embodied in an organization's systems, tools, procedures, policies, etc. Knowledge cannot be a valuable resource unless it is obtained and used in designing or producing a product or service. To integrate knowledge with business strategies, there should be a platform or framework that helps to manage it properly. Firm managers, policy-makers and other concerned bodies would consider the three sources of knowledge to foster innovative activities and obtain a competitive advantage. In addition, the authors recommend more emphasis be placed on firm-specific factors (such as OGCUL, leadership, management support and KM) to enhance the innovative capacity of a firm. Finally, the most critical issue to be raised while designing an innovation strategy would be employees’ willingness and passion to collaborate with others to develop new ideas, share ideas or implement policies. As knowledge resides in individuals’ minds, the knowledge holder should have a passion to share it with those working with him or her. In practice, knowledge sharing depends extremely on the passion and voluntariness of the two parts: knowledge provider and receiver. Therefore, firm managers would design a platform on how to motivate individuals to share their skills, experience and ideas with others through providing incentive packages, punishment and commitment. In this regard, the authors believe that the results would help individuals who are in the position to manage or regulate the manufacturing sector in designing innovation policies, KM policies or technology management policies and business strategies. Originality/value This study provides new empirical insight into the relationships between organizational factors (such as OGCUL and LMS), KM and innovation in a large sample of firms. To date, the empirical research on these relationships has been mainly limited to descriptive case studies (Chen and Huang, 2009; Zack et al., 2009; Donate and Guadaumillas, 2011), and there is thus a lack of empirical evidence with large samples of firms. Furthermore, there is a scarcity of studies investigating the relationship between organizational factors, KM and innovation in developing countries, especially in Ethiopia. This paper intends to fill this gap and nurture future research studies in the area.

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“…The GML index can be decomposed into technical efficiency ( EC ) and technical progress ( TC ) [ 24 ], where x , y , b , and t denote the input, desired output, undesired output, and time, respectively.

and

denote the efficiency values of the decision unit in period t and period t + 1, respectively.…”

Section: Indicator Construction Data Description and Measurement Mode...mentioning

confidence: 99%

Does the National Credit Demonstration Policy Affect Urban Green Economy Efficiency? Evidence from the Yangtze River Delta Region of China

Chen

Ni²,

Zhu

et al. 2022

IJERPH

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A more scientific green economy efficiency indicator is constructed based on OH (2010), and a multiperiod spatial DID model is used to examine the impact of national credit demonstration policies on urban green economy efficiency in a sample of cities above the prefecture level in the Yangtze River Delta. The study confirms the following: (1) The national credit demonstration policy makes a significant contribution to the green economic efficiency of cities, and it is conducive to strengthening awareness of the rule of law in the market to regulate market order. (2) The demand for credit regulation in coastal areas has increased under the new development pattern, and the national credit demonstration policy has effectively enhanced green economy efficiency through institutional supply. (3) Under the national credit demonstration policy, the subprovincial level and above can mobilise more resources for policy refinement and support, reducing transaction costs and improving the efficiency of the green economy. (4) The impact of the national credit demonstration policy on the efficiency of Zhejiang’s green economy is more obvious; but, under the overall framework of the Yangtze River Delta, the policy has a more prominent role in promoting green economy efficiency in other provinces. Policy insights are as follows: (1) Different cities have different degrees of impact on the efficiency of the green economy from the national credit demonstration policy, and they should implement differentiated measures based on regional heterogeneity; (2) regulating the use of administrative resources and avoiding undue administrative intervention are important prerequisites for promoting regional integration to enhance the efficiency of the green economy; and (3) strengthening interprovincial credit policy synergies can help to alleviate administrative distortions of policy implementation and enhance the efficiency of the regional green economy.

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Technical efficiency, technological progress and productivity growth of large and medium manufacturing industries in Ethiopia: A data envelopment analysis

Cited by 13 publications

References 63 publications

Binary logistic regression analysis on determinants of capacity utilization in medium and large manufacturing industries in Ethiopia

Binary logistic regression analysis on determinants of capacity utilization in medium and large manufacturing industries in Ethiopia

Organizational factors, knowledge management and innovation: empirical evidence from medium- and large-scale manufacturing firms in Ethiopia

Does the National Credit Demonstration Policy Affect Urban Green Economy Efficiency? Evidence from the Yangtze River Delta Region of China

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