Trade Liberalization, Infrastructure and Industrial Performance in Cameroon

Using pre-and post-reform industry-level panel and aggregate national infrastructure data, this paper examines the effects of infrastructure on industry productivity in Cameroon, controlling for trade variable and correcting for the likely endogeneity of infrastructure and other regressors. The empirical strategy involves, (i) estimation of production functions augmented by the infrastructure quantity and quality indicators and then derivation of industry-level productivity measures, (ii) accounting for output growth, and (iii) assessment of infrastructure impact on industry productivity growth. The results suggest that infrastructure stock index contributed to output growth and boosted productivity in both subperiods, but the post-reform effects were stronger. Infrastructure quality index significantly affected productivity growth only in the post-reform era. Interestingly, control trade variables appeared insignificant.