Adaptive efficiency under systemic shock: reassessing export-led growth, process innovation, and local sourcing in Ethiopian manufacturing industries during Covid-19
摘要
This study offers the first subsector‑level assessment of technical efficiency (TE) and its determinants in Ethiopia’s large and medium manufacturing industries, using a one‑step stochastic frontier model. Based on post‑COVID‑19 (2020) data from the Central Statistical Agency (CSA) covering six subsectors and 1,029 firms, the analysis investigates the links between efficiency and firm characteristics such as innovation, export orientation, and local sourcing. Results reveal considerable efficiency disparities across subsectors: Food Products (TE = 0.914) and Furniture (0.918) demonstrate higher efficiency scores, while Rubber and Plastics (0.350) and Non‑Metallic Mineral Products (0.072) are further from the frontier. During the pandemic, export orientation was statistically linked to lower efficiency, ranging from 0.885 units per unit increase in export share for Food Products to 60.33 units in Non‑Metallic Minerals (p < 0.05). Capital investment, seen as a proxy for process innovation, had a positive relationship with efficiency (0.125–0.141 units per million Birr invested, p < 0.05). Conversely, energy costs and tax burdens were negatively associated with efficiency, with the former reflecting systemic power unreliability and negative energy elasticities. Local input use was positively linked to efficiency in Food Products and Furniture, indicating context‑specific benefits from domestic sourcing. This study is novel in applying a one‑step SFA to Ethiopian manufacturing during a systemic shock, showing that the usual efficiency premium linked to frameworks such as learning‑by‑exporting and the Resource‑Based View (RBV) either disappeared or reversed under crisis conditions. These findings enhance understanding of efficiency in late‑industrialising economies. Policy implications focus on sector‑specific strategies to bolster innovation capacity, infrastructure reliability, and energy system resilience.