6533b821fe1ef96bd127b470

RESEARCH PRODUCT

The effect of firm´s growth dynamism on the income of their employees : a case study of medium and large-scale manufacturing enterprises in Tigray, Ethiopia

subject

description

Masteroppgave development management- Universitetet i Agder 2010 The paper investigates firms’ growth status, firms’ growth factors, employees’ salary levels, and employees’ salary growth factors in medium and large manufacturing firms in Tigray, Ethiopia. The results indicate that medium and large manufacturing firms in Tigray are growing but at a decreasing rate. There are however differences in growth rates among the various sub-sectors. Moreover, factors like a firm’s age, firm size, level of education and the experience of firm leaders, and forms of enterprises also influence the growth of firms. The relationship between the age of a firm and its growth is found to be U-shaped. Moreover, the growth rate of large firms’ is higher than of medium firms. The experience of the leaders of a firm is positively and significantly correlated with firm growth. Firm and salary growth rates run in parallel, although the growth rate of an employees’ salary is often higher than that of the firm’s growth rate. The findings indicate that the annual salary of male employees’ is higher than of females’; moreover, while the males’ salary increases at an increasing rate, the salary of females increases at a decreasing rate. This shows there is gender-wage gap between males and females. Finally, the results indicate that medium firms pay a higher salary than that of large firms; but the employees’ salary growth rate of large firms’ is higher than that of medium firms. A number of factors are identified that can be used to improve the firm and salary growth rates of firms although more should be done to reduce the gender-income gap. Indeed, more research should also be done investigating the reasons behind gender-income gaps in the medium and large manufacturing firms in Tigray. Key Words: medium and large manufacturing firms, firms’ growth dynamism, employees’ salary, panel data, Tigray, Ethiopia