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Understanding the business environment in South Asia : evidence from firm-level surveys

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Author Info

  • Carlin, Wendy
  • Schaffer, Mark

Abstract

This paper examines the relationship between firm performance and growth and the business environment in the countries of the South Asia Region -- Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka -- using firm-level data from the World Bank's Enterprise Surveys. The analysis uses an approach in which the responses of firms to questions about the quality of the business environment can be interpreted as shadow prices: estimations by managers of the cost imposed on the firm by inadequacies of an aspect of the business environment -- public inputs such as regulation, physical infrastructure, availability of skilled labor, macroeconomic conditions, rule of law, etc. -- for the growth of their firm. The analysis finds, in line with this approach, that higher-productivity and better-performing firms in the region, and in particular firms that recently expanded their employment and created jobs, report significantly higher constraints in terms of the supply of public inputs. The authors discuss the differences across countries in the importance of various industries, how they relate to various firm characteristics, how informal and rural sector firms are constrained by public inputs, and how firms in the South Asia Region countries compare with firms in the rest of the world.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6160.

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Date of creation: 01 Aug 2012
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Handle: RePEc:wbk:wbrwps:6160

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Related research

Keywords: Environmental Economics&Policies; Microfinance; E-Business; Private Participation in Infrastructure; Small Scale Enterprise;

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References

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  1. Dethier, Jean-Jacques & Hirn, Maximilian & Straub, Stephane, 2008. "Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data," Policy Research Working Paper Series 4792, The World Bank.
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Cited by:
  1. Carlin, Wendy & Schaffer, Mark & Seabright, Paul, 2013. "Soviet power plus electrification: What is the long-run legacy of communism?," Explorations in Economic History, Elsevier, vol. 50(1), pages 116-147.

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