This paper, a synthesis of salient findings of the authors’ book entitled “Investment Climate Around the World: Voices of the Firms from the World Business Environment Survey”, and based on a chapter in “Pathways Out of Poverty: Private Firms and Economic Mobility in Developing Countries”, by G. Fields and G. Pfeffermann, summarizes the salient features of the World Business Environment Survey (WBES). It shows that important dimensions for the climate of business operation and investment can be measured, analyzed, and compared across countries, and that governance is key to the business environment and investment climate. The survey findings suggest that key policy, institutional and governance indicators affect the growth of a firm’s sale and investment and the extent to which firms operate in the unofficial economy. Further, the paper provides empirical support for some commonly held notions, while challenging others. It suggests a link between taxation, financing, and corruption on the one hand, and growth and investment on the other, and it highlights the costs to economies where the state is captured by a narrow set of private interests.
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Paper provided by EconWPA in its series Microeconomics with number
0405004.
Find related papers by JEL classification: K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General P10 - Economic Systems - - Capitalist Systems - - - General
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