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Cross-country and within-country differences in the business climate

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  • Bartelsman, Eric
  • Haltiwanger, John
  • Scarpetta, Stefano

Abstract

In this note we document how constraints in the business environment, as perceived by individual firms, differ both across countries and within each country, across firms. This finding is of key importance given recent theoretical models that suggest idiosyncratic distortions can have large aggregate effects. Not only do such distortions affect the behaviour of incumbent firms, but they also impinge on the selection of firms that enter the market or leave it. Empirical research should attempt to link idiosyncratic components of the business climate to firm selection and to distortions in the allocation of factors inputs across firms and, through these channels, to aggregate economic performance.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 28 (2010)
Issue (Month): 4 (July)
Pages: 368-371

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Handle: RePEc:eee:indorg:v:28:y:2010:i:4:p:368-371

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Web page: http://www.elsevier.com/locate/inca/505551

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Keywords: Firm dynamics Economic institutions Comparative economic systems Firm-level heterogeneity;

References

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  1. Banerjee, Abhijit V. & Duflo, Esther, 2005. "Growth Theory through the Lens of Development Economics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473-552 Elsevier.
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  8. Philippe Aghion & Thibault Fally & Stefano Scarpetta, 2007. "Credit constraints as a barrier to the entry and post-entry growth of firms," Economic Policy, CEPR & CES & MSH, vol. 22, pages 731-779, October.
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Cited by:
  1. Norman Gemmel & Richard Kneller & Danny McGowan & Ismael Sanz, 2013. "Corporate Taxation and Productivity Catch-Up: Evidence from European Firms," Working Papers 13001, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).

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