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Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data

Author

Listed:
  • Dethier, Jean-Jacques

    () (The World Bank)

  • Hirn, Maximilian

    () (The World Bank)

  • Straub, Stephane

    () (Arqade, Toulouse School of Economics)

Abstract

This paper surveys the recent literature which examines the impact of business climate variables on productivity and growth in developing countries using enterprise surveys. Comparable enterprise surveys today cover some 70,000 firms in over 100 countries around the world. The literature that has analyzed this data provides evidence that a good business climate drives growth by encouraging investment and higher productivity. Various infrastructure, finance, security, competition and regulation variables have been shown to significantly impact firm performance. Section 1 of this paper outlines the theoretical framework that underpins the investment climate literature. Section 2 describes the available datasets and surveys the key findings of the empirical literature, first macroeconomic and then microeconomic studies. Particular attention is paid to the robustness of the reported results. Section 3 highlights important econometric issues common to this literature and suggests a research agenda and possible improvements in survey design.

Suggested Citation

  • 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.
  • Handle: RePEc:wbk:wbrwps:4792
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    References listed on IDEAS

    as
    1. Carmen Pagés-Serra & Reyes Aterido & Mary Hallward-Driemeier, 2007. "Investment Climate and Employment Growth: The Impact of Access to Finance, Corruption and Regulations Across Firms," Research Department Publications 4559, Inter-American Development Bank, Research Department.
    2. Pierre, Gaelle & Scarpetta, Stefano, 2004. "Employment regulations through the eyes of employers - do they matter and how do firms respond to them?," Policy Research Working Paper Series 3463, The World Bank.
    3. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
    4. David Kaplan & Eduardo Piedra & Enrique Seira, 2006. "Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico," Discussion Papers 06-013, Stanford Institute for Economic Policy Research.
    5. Nicholas Stern & Jean-Jacques Dethier & F. Halsey Rogers, 2006. "Growth and Empowerment: Making Development Happen," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693461, March.
    6. Kaplan, David S. & Piedra, Eduardo & Seira, Enrique, 2011. "Entry regulation and business start-ups: Evidence from Mexico," Journal of Public Economics, Elsevier, vol. 95(11), pages 1501-1515.
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    More about this item

    Keywords

    Investment Climate; Growth and Productivity; Economic Development;

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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