Investment climate and firm’s economic performance: econometric methodology and application to Turkey's investment climate survey
AbstractGovernment policies and behavior exert a strong influence on the investment climate through their impact on costs, risks and barriers to competition. Key factors affecting the investment climate through their impact on costs are: corruption, taxes, the regulatory burden and extent of red tape in general, factor markets (labor, intermediate materials and capital), the quality of infrastructure, technological and innovation support, and the availability and cost of finance. While the investment climate surveys are quite useful in identifying major issues and bottlenecks as perceived by firms, the data collected is also meant to provide the basic information for an econometric assessment of the impact or contribution of the investment climate (IC) variables on productivity. We believe that improving the investment climate (IC) is a key policy instrument to promote economic growth and to mitigate the institutional, legal, economic and social factors that are constraining the convergence of per capita income and labor productivity of Turkey relative to more developed countries. For that, we need to identify the main investment climate variables that affect economic performance measures like total factor productivity, employment, wages, exports and foreign direct investment and this is the main goal of this paper. In turn, that quantified impact is used in the advocacy for, and design of, investment-climate reforms.
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we082113.
Date of creation: Jun 2008
Date of revision:
Investment climate; firm level determinants of TFP; Employment; Wages; Exports and FDI; Mean contributions of investment climate;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- F18 - International Economics - - Trade - - - Trade and Environment
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-CWA-2008-11-11 (Central & Western Asia)
- NEP-EFF-2008-11-11 (Efficiency & Productivity)
- NEP-ENV-2008-11-11 (Environmental Economics)
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