Measuring the impact of the investment climate on total factor productivity : the cases of China and Brazil
AbstractThis study measures the impact of investment climate factors on total factor productivity (TFP) of firms in Brazil and China. The analysis is conducted in two steps: first an econometric production function is estimated to produce a measure of TFP at the firm level. In the second step, variation in TFP across firms is statistically related to a indicators of the investment climate as well as firm characteristics. The results yield a number of insights about the factors underlying productivity. In both countries, and in a variety of industry groups, indicators of poor investment climate, especially delays in customs clearance and interruptions in utility services, have significant negative effects on TFP. Reducing customs clearance time by one day in China could increase TFP by 2-6 percent. Indicators such as email usage have positive effects on TFP. In the case of China, state-owned firms and firms located in the interior are shown to be much less productive than privately owned firms and firms located in the east. In Brazil, the results present an interesting contrast between the apparel industry and the electronics industry. In the apparel industry, older firms in competitive markets are more productive, while in the case of electronics, newer firms with higher market shares are more productive.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3792.
Date of creation: 01 Dec 2005
Date of revision:
Economic Theory&Research; Technology Industry; Water and Industry; ICT Policy and Strategies; Economic Growth;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-CNA-2006-01-01 (China)
- NEP-EFF-2006-01-01 (Efficiency & Productivity)
- NEP-SEA-2006-01-01 (South East Asia)
- NEP-TRA-2006-01-01 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shirley, Chad & Winston, Clifford, 2004. "Firm inventory behavior and the returns from highway infrastructure investments," Journal of Urban Economics, Elsevier, vol. 55(2), pages 398-415, March.
- Escribano, Alvaro & Guasch, J. Luis, 2005. "Assessing the impact of the investment climate on productivity using firm-level data : methodology and the cases of Guatemala, Honduras, and Nicaragua," Policy Research Working Paper Series 3621, The World Bank.
- Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004.
"The Institutional Determinants of Bilateral Trade Patterns,"
Wiley Blackwell, vol. 57(1), pages 103-123, 02.
- Henri L.F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," Tinbergen Institute Discussion Papers 03-044/3, Tinbergen Institute, revised 30 Oct 2003.
- Henri L.F. De Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," ERSA conference papers ersa03p421, European Regional Science Association.
- Deininger, Klaus & Jin, Songqing & Sur, Mona, 2007.
"Sri Lanka's Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth,"
Elsevier, vol. 35(12), pages 2056-2078, December.
- Jin, Songqing & Deininger, Klaus W. & Sur, Mona, 2005. "Sri Lanka's Rural Non-farm Economy: Removing Constraints to Pro-poor Growth," 2005 Annual meeting, July 24-27, Providence, RI 19280, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Ayadi, Rym & De Groen, Willem Pieter, 2014. "Micro-, Small- and Medium-Sized Enterprises with High-Growth Potential in the Southern Mediterranean: Identifying Obstacles and Policy Responses," CEPS Papers 8796, Centre for European Policy Studies.
- Hausman, Warren H. & Lee, Hau L. & Subramanian, Uma, 2005. "Global logistics indicators, supply chain metrics, and bilateral trade patterns," Policy Research Working Paper Series 3773, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.