Misallocation or mismeasurement? Collecting new panel data to improve production function estimation

SMEs tend to show substantial differences in productivity even within narrow industries and geographical regions. In order to design effective industrial policies, it is important to quantify such differences in the productivity of SMEs, identify what constraints drive these differences, and to understand what are the benefits of reducing them through external policy intervention.

To answer these questions, this project will collect new rounds of survey data on SMEs in Uganda. Specifically, data will be collected on a sample of roughly 1,000 SMEs in carpentry and welding, two very common SME sectors. Through this, the researchers will estimate an accurate measure of productivity at the firm level. This will allow for identification of more productive firms and potential constraints to their growth, and quantification of the potential benefits of different government interventions aimed at alleviating these constraints.

Outputs

  • Research in progress.

    Project last updated on: 6 May 2022.