Firm Inventory Behavior in East Africa

Firms normally keep certain inventories, including raw materials, work-in-progress, and finished goods, to operate seamlessly and not to miss possible business opportunities. But inventory is costly, and the optimal firm inventory differs depending on various economic conditions, including trade and transport costs. The paper examines firm inventory behavior in East Africa, in which transport connectivity, especially to the ports, is considered as one of the major business constraints. Using firm-level data from Burundi, Kenya, Rwanda, Tanzania, and Uganda, it is shown that transport connectivity significantly affects firm inventory behavior. In particular, road density and transport costs to the port are important to determine the optimal inventory level. With more roads in a city and/or cheaper access to the port, firms would hold smaller inventories.

Bibliographic Details

Main Authors:	Humphrey, Richard Martin, Iimi, Atsushi, Melibaeva, Sevara
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-06
Subjects:	TOTAL REVENUE, VEHICLE OPERATING COSTS, TRAFFIC CONGESTION, EQUIPMENT, NETWORK DATA, BUSINESS OPPORTUNITIES, GLOBAL MARKETS, MATERIALS, TRANSPORT INFRASTRUCTURE, TRANSPORTATION COSTS, RAIL LINES, INFORMATION, QUALITY OF TRANSPORT, ELASTICITY, TRAFFIC, HIGHWAY SYSTEM, PEAK DEMAND, ROAD INFRASTRUCTURE, INPUTS, TRANSPORT SERVICES, TRANSPORTATION INFRASTRUCTURE, TRANSPORT ACCESS, CUSTOMS CLEARANCE, DRIVERS, OPEN ACCESS, LOCAL TRANSPORTATION, TRANSPORT MODES, ECONOMIC ACTIVITY, DEVELOPMENT, INSTITUTIONS, VEHICLE, DATA, TRADE SYSTEM, ROAD, COSTS, TRANSPORT OPERATORS, ROAD NETWORK, ROAD SECTOR, TRANSPORT, IMPACT OF TRANSPORT, INVENTORY LEVEL, INTERSTATE HIGHWAY SYSTEM, DOMAIN, RAILWAY NETWORK, CUSTOMS, RAIL LINE, PRODUCTIVITY, AVERAGE TRANSIT TIME, CONNECTIVITY, TRUE, WEB, MATERIAL, RAIL STATIONS, INVENTORIES, RURAL ROADS, ROUTE, INVENTORY, PHYSICAL DISTANCE, FREIGHT COSTS, INFRASTRUCTURE, LAND USE, TRANSACTIONS, INFRASTRUCTURE INVESTMENT, MANUFACTURING, TECHNOLOGY, TRANSACTION, SYSTEM DEVELOPMENT, CONGESTION, RELIABILITY, OPPORTUNITY COST, TRANSPORTATION, INVENTORY LEVELS, TRANSIT, INTERNATIONAL TRADE, SUPPLY NETWORK, INFRASTRUCTURE COSTS, RESULTS, VALUE, COMPETITIVENESS, FOREIGN DIRECT INVESTMENT, ACCESSIBILITY, DEMAND, NETWORKS, MOTORWAYS, INFRASTRUCTURE DEVELOPMENTS, DAYS OF INVENTORY, PASSENGER TRAFFIC, OPPORTUNITY COSTS, ECONOMIC ORDER, LEVELS OF INVENTORY, RAILWAY, HIGHWAYS, ECONOMIC THEORY, SUPPLY CHAIN, MINISTRY OF TRANSPORT, HIGHWAY INFRASTRUCTURE, ROAD USER, ROADS, LOCAL ROADS, RESULT, HIGHWAY, TRADE, ICT, INTERSTATE HIGHWAYS, RAILWAYS, GOODS, THEORY, BUSINESSES, BUSINESS, NETWORK, COMPARATIVE ADVANTAGE, AGGLOMERATION ECONOMIES, RAILROADS, PERFORMANCE, BUSINESS ENVIRONMENT, RAIL, MARKET DEMAND, ECONOMIC ACTIVITIES, INVESTMENTS, COMMUNICATION, SUPPLY CHAIN MANAGEMENT, ROAD CONDITIONS, URBAN ROADS, TRANSPORT COSTS, COMMUNICATION TECHNOLOGY, ROAD TRANSPORT, VEHICLE OPERATING, URBAN TRAFFIC CONGESTION, URBAN TRAFFIC, HIGHWAY CAPITAL, FREIGHT, USES, USER, BOTTLENECKS, HISTORIC CITIES, DEVELOPMENT POLICY,
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24570546/firm-inventory-behavior-east-africa https://hdl.handle.net/10986/22151
Tags:	Add Tag No Tags, Be the first to tag this record!