TY  - JOUR
AU  - Kalemli-Ozcan, Sebnem
AU  - Sorensen, Bent E
TI  - Misallocation, Property Rights, and Access to Finance: Evidence from Within and Across Africa
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18030
PY  - 2012
Y2  - May 2012
DO  - 10.3386/w18030
UR  - http://www.nber.org/papers/w18030
L1  - http://www.nber.org/papers/w18030.pdf
N1  - Author contact info:
Ṣebnem Kalemli-Özcan
Department of Economics
University of Maryland
Tydings Hall 4118D
College Park, MD 20742-7211
Tel: 301/405-3266
E-Mail: kalemli@econ.umd.edu

Bent Sorensen
Department of Economics
University of Houston
3623 Cullen Blvd
Houston, TX 77204-5019
Tel: 713-743-3841
Fax: 713-743-3798
E-Mail: besorensen@uh.edu
M1  - published as Sebnem Kalemli-Ozcan, Bent E. Sørensen. "Misallocation, Property Rights, and Access to Finance: Evidence from within and across Africa," in Sebastian Edwards, Simon Johnson, and David N. Weil, editors, "African Successes, Volume III: Modernization and Development" University of Chicago Press (2016)

M3  - presented at "African Development Successes", August 3-5, 2011
AB  - We study capital misallocation within and across 10 African countries using the World Bank Enterprise Surveys. First, we compare the extent of misallocation among firms within countries. We document high variation in firms' marginal product of capital (MPK), implying that countries could produce significantly more with the same aggregate capital stock if capital were allocated optimally. Such variation differs from country to country with some African countries (success stories) closer to developed country benchmarks. Small firms and non-exporters have less access to finance and have higher returns to capital in general. Self reported measures of obstacles to firms' operations suggest access to finance is the most important obstacle: A firm with the worst access to finance has MPK 45 percent higher than a firm with the worst access to finance as a result of low capital per worker. We compare average levels of the MPK across countries, finding evidence that the strength of property rights and the quality of the legal system help explain country-level differences in capital misallocation.
ER  -