Title: Domestically sourced and imported raw material utilisation and labour productivity: evidence from small and medium-scale manufacturing firms of Ethiopia

Authors: Temesgen Woldamanuel Wajebo

Addresses: College of Business and Economics, Addis Ababa University, Addis Ababa, Ethiopia

Abstract: This study is aimed to investigate the effect of domestically sourced and imported raw material utilisation on labour productivity in small and medium-sized manufacturing firms in Ethiopia. A two-stage least squares (2SLS) regression model is employed using survey data collected by the Ethiopian Statistics Service from 1,351 selected firms in 2020. The results show that domestically sourced and imported raw material utilisation intensity per labour is an important determinant of labour productivity in small and medium manufacturing firms in Ethiopia. Providing incentives for the industry's demand-driven agricultural product producers is suggested to address the shortage of raw materials. Expansion of industrial parks and sheds also help to mitigate infrastructure provision problems and maximise agglomeration effects. Furthermore, intervening to improve workers' wages would improve labour productivity.

Keywords: domestic input; imported input; labour productivity; 2SLS method.

DOI: 10.1504/IJPQM.2025.148464

International Journal of Productivity and Quality Management, 2025 Vol.46 No.1, pp.23 - 40

Received: 07 Jul 2023
Accepted: 02 Aug 2023
Published online: 08 Sep 2025 *

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