IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/5267.html
   My bibliography  Save this paper

Micro efficiency and macro growth

Author

Listed:
  • Nallari, Raj
  • Bayraktar, Nihal

Abstract

This paper is about micro foundations of productivity and growth. There are several studies on productivity for advanced economies but relatively few for developing countries. Using data from the investment climate surveys of the World Bank, estimation results from 45 developing countries, complemented by extended analysis at firm and industry levels for Brazil and India for the period 2002-05, indicate the following: (i) confirmation of the importance of total factor productivity at firm, industry and national levels, but total factor productivity progressively tapersoff at each level of aggregation implying that there is a less than one-to-one relationship between micro-efficiency, sector growth, and macro growth; (ii) capital accumulation is more important at the macro level than the micro level; (iii) productivity at the micro level is driven by research and development, the capacity utilization rate, and adoption of foreign technology (all of which involve management decisions), and is negatively related to corruption and instability, tax, and financial regulations; and (iii) confirmation of the lower contribution of total factor productivity to output growth in developing countries than in developed economies. Management decisions are involved in a lot of day-to-day operations at the firm level and therefore management is an unmeasured input. In developing countries, at the firm level, there is a need to understand the contribution of quality of inputs (management quality, education and labor quality, training, experience of workers, use of computers at work) and also the role of external agglomeration (for example, location in a booming city, competitive pressures from new firms, trade competition, and regulations).

Suggested Citation

  • Nallari, Raj & Bayraktar, Nihal, 2010. "Micro efficiency and macro growth," Policy Research Working Paper Series 5267, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5267
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/04/12/000158349_20100412113736/Rendered/PDF/WPS5267.pdf
    Download Restriction: no

    More about this item

    Keywords

    Economic Theory&Research; Economic Growth; Labor Policies; Achieving Shared Growth; E-Business;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5267. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.