Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/142578 
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series No. 16/2010
Publisher: 
Economics and Econometrics Research Institute (EERI), Brussels
Abstract: 
Lifting the long run growth rate is, arguably, the pursuit of every economy. What should Kenya do to enhance its long run growth rate? This paper attempts to answer this question by examining the determinants of total factor productivity (TFP) in Kenya. We utilized the theoretical insights from the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and followed Senhadji’s (2000) growth accounting procedure. We find that growth in Kenya, until the 1990s was mainly due to factor accumulation. Since then, TFP has made a small contribution to growth. Our findings imply that while variables like overseas development aid, foreign direct investment and progress of financial sector improves TFP, trade openness is the key determinant. Consequently, policy makers should focus on policies that improve trade openness if long run growth rate is to be raised.
Subjects: 
Solow model
growth accounting
total factor productivity
JEL: 
O10
O15
Document Type: 
Working Paper

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