The Effect of State Capacity on the Comparative Employment Growth Rates of Government-Owned-Firms and Non-Government-Owned Firms: Evidence from sub-Saharan Africa

By examining the effect of macro-level political variables on firm-level economic variables, this paper attempts to more deeply understand micro-level political economy in a developing context. The results of this paper fill in the research gaps regarding the effects of state capitalism and political
institutions (i.e., state capacity) on firm-level employment growth by demonstrating that in
countries with high state capacity, government-owned firms have significantly lower employment growth rates than non-government-owned firms, whereas in countries with low state capacity, government-owned firms have significantly higher employment growth rates than non-government-owned firms.