The System of Protection and Industrial Development in Zimbabwe by Lindani B. Ndlovu

Author:Lindani B. Ndlovu [Ndlovu, Lindani B.]
Language: eng
Format: epub
ISBN: 9780429773808
Goodreads: 43329145
Publisher: Routledge
Published: 2018-12-20T00:00:00+00:00

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Source: Survey data.

6.4 Sample characteristics

The main characteristics discussed here are age of enterprises, the levels of capacity use, the amount of direct foreign exchange costs incurred by each firm, the foreign exchange intensity of production, employment and factor intensity. These sample firm characteristics are shown in Table 6.3.

Table 6.3

Surveyed firms' characteristics

6.4.1 Age of enterprises

The age refers to the length of time that an enterprise has existed even under different names and owners. No sample firms were established after 1980, nine were established during UDI, eleven during the federation, while eight were already operational by 1953. The newest firm started operations in 1972. These are generally well-established firms with an average enterprise age of nearly 32 years. Some advantages and disadvantages can arise from this for the firms. The main disadvantage is that given the foreign exchange shortage that affected Zimbabwe since UDI, older firms were increasingly faced with outdated production equipment, frequent breakdowns of operations and a shortage of spares to service the equipment. The advantage may be that the more established these films are, the stronger is their position when negotiating with government for price rises and other special conditions that are likely to enhance their profitability. Also as manufacturers get more established, economic theory suggests that they gain from their experience and learn to reduce their production costs, improving efficiency and becoming more competitive. This expectation is the basis of the infant industries argument.

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