Structural Reforms and Firms' Productivity : Evidence from Developing Countries
This paper assesses the effects of selected structural reforms on labor productivity growth for 37 developing countries over 2006-14. It combines newly constructed reform indexes using the International Monetary Fund's Monitoring of Fund Arran...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/586181516299611059/Structural-reforms-and-firms-productivity-evidence-from-developing-countries http://hdl.handle.net/10986/29218 |
| Summary: | This paper assesses the effects of
selected structural reforms on labor productivity growth for
37 developing countries over 2006-14. It combines newly
constructed reform indexes using the International Monetary
Fund's Monitoring of Fund Arrangements data set and
firm-level productivity from the World Bank Enterprise
Surveys. The paper highlights the following results.
Structural reforms under consideration in this study --
financial, fiscal, real sector, and trade reforms --
significantly improve productivity at the firm level.
Interestingly, real sector reforms have the most sizable
effects on firms' productivity. The relationship
between reforms and productivity is nonlinear and shaped by
certain characteristics of firms, including financial
access, a distortionary environment, and firms' size.
The pace of reforms matters, since being a “strong reformer”
is associated with a clear productivity dividend for firms.
Finally, except for financial and trade reforms, all the
macroeconomic reforms considered are bilaterally
complementary in improving firms' productivity. These
findings are robust to several sensitivity checks, including
alternative methodologies and measures of productivity, and
a counterfactual experiment based on unsuccessful reforms. |
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