Abstract
Productivity is a major driver of sustainable economic growth, and it is essential in promoting national welfare. Countries follow different paths to enhance productivity growth. Developing countries continue to face major problems in achieving sustainable growth. The International Labour Organization (2005) highlighted that bridging the world productivity gap is crucial for poverty alleviation, boosting output growth, and creating decent jobs. Most people in Zimbabwe are employed in work that is not sufficiently productive to yield a decent income (International Labour Organization, 2016). This paper investigates the most important determinants of a firm’s productivity in Zimbabwe, using data from World Bank Enterprise Surveys. The research further explores determinants of productivity in small enterprises, since a large number of urban citizens rely on small and medium-sized enterprises for their livelihoods. For 2011 and 2016, the following factors emerged as important for productivity: International Organization for Standardization certification; purchase of equipment; finance; and female ownership. For the 2011 sample, tax administration, labour regulation obstacles, water, internet, research and development, foreign subsidiaries, and brain drain are important. Since the economic and political environment changes with time, in 2016, cheap imports, highly skilled production workers, electricity, research and development expenditure, and process innovations were very important productivity factors. These factors affect small and medium-sized enterprises and large firms differently. Cheap imports, the brain drain, and highly skilled workers tend to be more important in terms of large firms’ productivity levels. Small and medium-sized enterprises seem to be affected by factors such as water cuts, the purchase of assets, female ownership, tax administration, and foreign ownership.
M.Phil. (Industrial Policy)