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

Author

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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.

Suggested Citation

  • Bartelsman, Eric & Haltiwanger, John & Scarpetta, Stefano, 2010. "Cross-country and within-country differences in the business climate," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 368-371, July.
    • Handle: RePEc:eee:indorg:v:28:y:2010:i:4:p:368-371
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    References listed on IDEAS

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    1. Haltiwanger, John C. & Scarpetta, Stefano & Schweiger, Helena, 2006. "Assessing Job Flows across Countries: The Role of Industry, Firm Size and Regulations," IZA Discussion Papers 2450, Institute of Labor Economics (IZA).
    2. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
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    5. Aterido, Reyes & Hallward-Driemeier, Mary & Pagés, Carmen, 2007. "Investment Climate and Employment Growth: The Impact of Access to Finance, Corruption and Regulations Across Firms," IZA Discussion Papers 3138, Institute of Labor Economics (IZA).
    6. Micco, Alejandro & Pagés, Carmen, 2006. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," IZA Discussion Papers 2433, Institute of Labor Economics (IZA).
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    8. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
    9. Danielle Venn, 2009. "Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators," OECD Social, Employment and Migration Working Papers 89, OECD Publishing.
    10. 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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    Citations

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    Cited by:

    1. Mendez-Guerra, Carlos & Gonzales-Rocha, Erick, 2018. "A Comparison of TFP Estimates via Distribution Dynamics: Evidence from Light Manufacturing Firms in Brazil," MPRA Paper 87723, University Library of Munich, Germany.
    2. Norman Gemmell & Richard Kneller & Danny McGowan & Ismael Sanz & José F. Sanz‐Sanz, 2018. "Corporate Taxation and Productivity Catch‐Up: Evidence from European Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(2), pages 372-399, April.
    3. Gonzales-Rocha, Erick & Mendez-Guerra, Carlos, 2018. "Increasing productivity dispersion: Evidence from light manufacturing in Brazil," MPRA Paper 88478, University Library of Munich, Germany.
    4. Andrey Yakovlev & Irina Levina & Anastasia Kazun, 2015. "What Firms Observed Improvement of the Business Climate in Russia in 2012-2014?," Public administration issues, Higher School of Economics, issue 3, pages 35-60.
    5. Lim, Jamus Jerome, 2014. "Institutional and structural determinants of investment worldwide," Journal of Macroeconomics, Elsevier, vol. 41(C), pages 160-177.
    6. Mitsukuni Nishida & Amil Petrin & Sašo Polanec, 2014. "Exploring reallocation’s apparent weak contribution to growth," Journal of Productivity Analysis, Springer, vol. 42(2), pages 187-210, October.
    7. Andrei Yakovlev & Irina Levina & Anastasia Kazun, 2015. "Attitude to the National Leader Through the Lenses of Investment Climate Assessment: The Case of Russia," HSE Working papers WP BRP 98/EC/2015, National Research University Higher School of Economics.

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