Structural Reforms and Productivity Growth in Developing Countries : Intra- or Inter-Reallocation Channel?
This paper investigates the effects of financial sector, product market, and trade reforms on labor productivity growth and its two components—the intra-sectoral (within) and inter-sectoral (between) components—in a sample of developing countries o...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/636691626716744853/Structural-Reforms-and-Productivity-Growth-in-Developing-Countries-Intra-or-Inter-Reallocation-Channel http://hdl.handle.net/10986/36006 |
| Summary: | This paper investigates the effects of
financial sector, product market, and trade reforms on labor
productivity growth and its two components—the
intra-sectoral (within) and inter-sectoral (between)
components—in a sample of developing countries over
1975–2005. The paper finds that most of the past trade,
product, and financial sector reforms have increased the
growth rate of labor productivity. In particular, countries
that are further away from the technology leader tend to
benefit more from structural reforms than countries closer
to the technology frontier. Looking at the subcomponents of
labor productivity growth, the paper finds that structural
reforms work mostly through the intra-allocative efficiency
channel but not through the inter-allocative efficiency
channel. The intra-sectoral component is the main driver of
the impacts of reforms on labor productivity growth, with a
contribution between 76 and 96 percent. |
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