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ACCOUNTING FOR PRODUCT STANDARDS IN PRODUCTIVITY MEASUREMENT A STUDY ON GHANAIAN APPAREL INDUSTRY

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Donatus Ayitey, Daniel Agbeko
» doi: 10.48047/ecb/2023.12.1.575

Abstract

This paper presents an assessment of Ghanaian apparel sub-sector particularly small and medium-sized businesses by gauging productivity growth (catching-up) along two lines. The first is on growth due to output quantity expansion and the second one is growth due to output standards improvement. This is because the answer to industrial competitiveness depends largely on meeting not only local but also international product standards. Competitiveness likewise depends not only on a firm’s success in obtaining an optimal output from a given set of inputs but also on its success in meeting the various local and international market standards required for the business to thrive. Timely enough, new technologies have provided some opportunity for industrial upgrading. Using a multi-stage data envelopment analysis (DEA) and an output-oriented mathematical linear programming technique, the paper computed standards-corrected and non-standards corrected total factor productivity growth coefficients. A key finding was that, growth was due to output quantity expansion and not output standards improvement as non-standards corrected growth coefficients indicate 13 per cent growth compared to standard corrected ones that indicate no change at 95% level of significance. The speed of operation and the quality of products have been among the core drivers of technological choice and adoption by producers in the apparel industry. This evidence corroborated and actually lent credence to the long standing notion that small businesses in the Ghanaian apparel sub-sector are losing competitiveness through slow product quantity expansion and low level of product standards

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