Journal Article

Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data

Jean-Jacques Dethier, Maximilian Hirn and Stéphane Straub

in The World Bank Research Observer

Published on behalf of World Bank

Volume 26, issue 2, pages 258-309
Published in print August 2011 | ISSN: 0257-3032
Published online September 2010 | e-ISSN: 1564-6971 | DOI: http://dx.doi.org/10.1093/wbro/lkq007
Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data

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  • Regulation and Industrial Policy
  • Economic Growth and Aggregate Productivity
  • Economic Development

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The authors survey the recent literature which examines the impact of the business climate on productivity and growth in developing countries using enterprise surveys. Comparable enterprise surveys today cover more than 100,000 firms in 123 countries. The literature that has analyzed this data provides evidence that a good business climate favors growth by encouraging investment and higher productivity. Various infrastructure, finance, security, competition, and regulation variables have been shown to have a significant impact on enterprise performance. The authors state their motivation for their review by explaining why a disaggregated, firm-level analysis of the relationship between enterprise performance and business climate—as opposed to a more macroaggregate analysis—is important to gaining insights into these issues. They review the main findings of the empirical microliterature based on enterprise surveys and consider the robustness of the results. To conclude they put forward some ideas to advance research on business climate and growth, and they suggest possible improvements in survey design.

Keywords: L51; O47; O12

Journal Article.  16533 words.  Illustrated.

Subjects: Regulation and Industrial Policy ; Economic Growth and Aggregate Productivity ; Economic Development

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