Technological Competence And Firm Economic Performance In Zimbabwe's Manufacturing Industry

Abstract

Using data obtained from firm interviews, the paper attempts to relate, statistically, economic performance with technology. The firms interviewed belong to four industries: food and beverages (ISIC 31), textiles and clothing (ISIC 32), wood and furniture (ISIC 33), and metalworking (ISIC 34). An aggregate, synthetic, technology variable was built using data on three components: transfer of technology channels, manpower technical skills, and technological efforts. The transfer channels component comprised three sub-components: number of licensing contracts, number of technical assistance agreements, and number of expatriate technical personnel. The skills component also included three sub-components: number of engineers, number of scientists, and number of middle level technical personnel employed. The technical efforts component was formed by the addition of two normalized sub-components: R&D expenditures and number of uses made of technical support services. All these variables were measured at the individual firm level. The paper explores first the relationship between technology (as defined above) and two potential explanatory variables: size of firm and foreign ownership. In a second statistical exercise, the technology variable is incorporated, with traditional factors of production, in a production function. In the last statistical exercise, firm performance indicators were related to technology. Based on the availability of reliable data, the two performance indicators selected were: output per worker and whether the firm exported part of its output or not. The possible incidence of sectoral (industry) effects was also taken into account. It could be concluded that the sample data used shows a statistically significant, though not very strong, effect of the technology variable on both, output and output per worker, and a somewhat stronger association with whether Zimbabwe's manufacturing firms export or not.