Social capability deficits and productivity behaviour of African manufacturing firms: Evidence from Lesotho garment producers

Abstract

Despite attempts to induce strong competitiveness in African manufacturing firms, poor productivity performances continue to hinder their ability to operate successfully in international markets. This paper argues that, while many plausible explanations can be put forward for this failing, analysis of the firms' social and institutional contexts can provide useful insights into why they have continued to perform badly. Adopting the technological catch-up framework proposed by Abramovitz (1986), the paper uses the case of Lesotho garment producers to illustrate how an environment characterised by significant social capability deficits has a negative impact on local firms' competitiveness. Strategic interventions to improve the quality of infrastructural services deliveries are suggested as urgently needed remedial measures.

Keywords:

• social capability
• technology catch-up
• stochastic frontier
• garment export

Notes

¹While we are mindful of the fact that other factors may have played a role in the drop in these countries' export performances, evidence that the ATC quota removal played a key role can be found in some reports (see for instance Kaplinsky & Morris, 2006).