This paper uses firm level panel data from Ethiopian manufacturing to investigate the investment behavior of firms under uncertainty. The paper focuses on the heterogeneity of firm level investment responses to both demand and supply side sources of uncertainty. Accordingly, the...

This paper analyzes firm level adjustment of the product mix and its implications for aggregate output growth. Using firm level panel data from Ethiopian manufacturing during the period 1996-2007, it shows that about 30% of firms adjust their "extensive margin" annually by adding and/or dropping...