Labour Contracts and Performance of Cameroonian Firms

The aim of this study is to evaluate employees’ productivity in relation to their contract status.This study uses (a) survey data collected among manufacturing sector firms, having morethan 15 employees, in Cameroon between April and May 2006 and (b) information issued bythe National Institute of Statistics. Information collected concerned 45 firms spanning theperiod 2003 to 2005. This study uses the stochastic production frontier, distinguishingemployees holding fixed-term contract (FTC) from employees that do not have fixed-termcontracts (indefinite-term contract (ITC)). Results are estimated in 2 stages. First, weevaluate the determinants of the utilisation of FTC workers and second, we estimate the levelof efficiency and productivity of two types of workers. Empirical results indicate thatemployees holding FTC are twice more productive than those holding ITC. Likewise,parameters indicating returns to scale are 1.3. This parameter, though not significant, isgreater than one indicating constant returns to scale in the firm production function....