Product: Research Papers
Author(s): Xavier Cirera , Marcio Jose Vargas Da Cruz , Antonio Soares Martins Neto , Kyungmin Lee , Caroline Gomes Nogueira
Year: 2024
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This paper explores new firm-level data to examine the gender gap in technology adoption and the associated effect on firm performance. The data show a small difference in technology sophistication between firms managed by women and those managed by men, but there are larger differences in terms of labor productivity. Firms with female top managers are just as likely to adopt the most sophisticated technologies for general business functions that are common across all firms except for enterprise resource planning. However, firms managed by women adopt advanced technologies less frequently for sector-specific business functions. The study also finds that firms with higher technology sophistication tend to have higher productivity and the returns to the use of more sophisticated technologies are larger in businesses managed by women, which helps to narrow the productivity gap between firms managed by women and those managed by men.
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Product: Research Papers
Author(s): Mohammad Amin , Filip Jolevski , Asif M. Islam
Year: 2023
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This study analyzes the difference in the decline in sales between small and medium-size enterprises and large firms (the “gap”) following the outbreak of COVID-19 in 19 developing countries. The decline in sales as a percentage of the pre-pandemic level was bigger for small and medium-size enterprises by 12.2 percentage points. The paper uses the Kitagawa-Oaxaca-Blinder and quantile decomposition methods to estimate individual factors’ contributions to the gap at the mean and across the sales decline distribution. Several important results emerge. First, relative to large firms, small and medium-size enterprises faced greater incidence of input supply disruptions during the pandemic, had lower initial labor productivity levels, and were concentrated in country-industry cells with a bigger sales declines. These differences in the level of factors widened the gap. Small and medium-size enterprises also suffered more than large firms from a given level of financial constraints, input supply disruptions, and country-industry-specific factors, and benefitted less from a given level of initial labor productivity. These differences in the returns to factors also widened the gap. Second, the gap was much larger at the relatively high quantiles of sales decline distribution, indicating that relative to large firms, small and medium-size enterprises were much less resilient to large shocks than small shocks. Third, individual factors’ contribution to the gap varied across the sales decline distribution. Thus, the optimal policy mix depends on the size of the shock. Fourth, there were some important differences between geographical regions in what drove the gap. Thus, an eclectic policy approach is needed
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Product: Research Papers
Author(s): Ana Paula Cusolito , Roberto N. Fattal Jaef , Davide Salvatore Mare , Akshat Vikram Singh
Year: 2024
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This paper leverages the novel methodology by Whited and Zhao (2021) to identify financial distortions and applies it to a sample of 24 European countries. The analyses reveal that less developed economies face more severe financial misallocation. Distortions in the allocation of financial resources raise the relative cost of finance for younger, smaller, and more productive firms. Counterfactual analysis indicates that alleviating financial distortions could boost aggregate productivity by approximately 30-70 percent. On average, 75 percent of these gains across countries result from better access to finance, with the remainder from optimizing the debt-to-equity ratio. The paper also quantifies the link between financial misallocation and real-input allocative inefficiency, showing that reducing financial misallocation from the median to the 25th percentile of the cross-industry distribution can increase aggregate productivity by an average of 5.2 percent. The effect is larger, at 6.4 percent, for industries heavily reliant on external finance.
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Product: Research Papers
Author(s): Esteban Ferro , Davide Salvatore Mare , Faruk Miguel Liriano , Fausto Andres Patino Pena , Maria Gabriela Rodriguez Quezada , Federica Zeni
Year: 2024
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This paper examines the impact of implementing a carbon tax on aggregate total factor productivity in the Dominican Republic through the resource allocation channel. It incorporates energy inputs—electricity and fuel—into firms’ production functions, allowing predictions of potential changes in resource allocation due to the carbon tax. The theoretical implications of the model indicate that the carbon tax has a heterogeneous effect on firms’ input choices, contingent on the level of firms’ existing input market distortions. Moreover, the model suggests that in economies in which more productive firms are less distorted, the carbon tax can decrease aggregate total factor productivity. In contrast, when more productive firms are more distorted, the carbon tax can increase or decrease aggregate total factor productivity. Utilizing detailed firm-level data from 2009 to 2018, covering up to 118,000 firms, this paper finds that a carbon tax is more effective when levied on fuels rather than electricity. For the majority of sectors in the sample, the paper finds that existing distortions in energy consumption are positively correlated with firm-level productivity. Moreover, the quantitative results show that the introduction of the carbon tax shifts the burden of market distortions from high productivity firms to low productivity ones, generating aggregate total factor productivity gains for most sectors in the Dominican Republic. Overall, this study underscores the importance of considering existing input market distortions when analyzing the impact of environmental taxes.
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Product: Research Papers
Author(s): Filip Jolevski , Gaurav Nayyar , Regina Pleninger , Yu Shu
Year: 2024
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This paper examines spillovers in the use of digital technologies from formal to informal businesses by exploring differences in geographic proximity. Using a unique set of geocoded data from the 2019 World Bank Enterprise Surveys in Zambia, the findings indicate that closer geographic proximity to formal firms is associated with a significantly higher likelihood of digital adoption by informal businesses. The finding holds for various types of digital technologies, ranging from computers, tablets, and cell phones to mobile money transactions, and is robust to various measures of geographic proximity and model modifications. The results vary by the owner’s level of education and business age. The results also suggest that the spillovers in information and communications technology use can be explained by competition in the local market and learning through enhanced interactions.
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Product: Research Papers
Author(s): Furkan Sarıkaya , Mehmet Nazim Tamkoc , Jesica Torres Coronado
Year: 2025
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This paper documents the life cycle of formal and informal plants using five waves of the Mexican establishment census. Formal plants begin operations with three times more workers than informal plants and exhibit faster growth rates. Throughout their life cycle, formal establishments more than double their size, while informal plants increase their size by only 77%. A general equilibrium model is developed to quantify the aggregate economic losses stemming from these growth rate disparities. In the model, plants grow through productivity investments, and informality emerges from incomplete enforcement. In equilibrium, informal plants exhibit flatter life cycle profiles to avoid detection and taxation. Model parameters are calibrated to match key properties of plant size distribution and the life cycle of plants in Mexico. Quantitative results indicate that a revenue-neutral full enforcement increases aggregate output and the overall growth rate by sixteen and twenty-five percent relative to the benchmark, respectively.
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Product: Research Papers
Author(s): M. Nazim Tamkoc , Gustavo Ventura
Year: 2024
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This paper documents that senior plant managers in less-developed countries spend more time dealing with government rules and regulations than their counterparts in richer countries. These facts are interpreted through the lens of a span-of-control growth model, in which top managers run heterogeneous production plants, employing middle managers as well as production workers. The model implies that increasing the time burden on top management leads to equilibrium changes in wages, occupational sorting, the size distribution of production plants and ultimately, to a reduction in aggregate output. These consequences hold even when the time burden is symmetric across all plants. Quantitative results show that increasing the burden on managers’ time from the levels observed in Denmark to the higher levels observed in poorer countries have substantial consequences. Imposing the average time spent on regulations in Argentina reduces aggregate output by about 1/3 and mean plant size by more than 5 employees. Results contribute to rationalizing differences in plant size and output across countries via a channel hitherto unexplored in the literature.
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Product: Research Papers
Author(s): Nona Karalashvili , M. Nazım Tamkoç
Year: 2022
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This paper estimates the effectiveness of government support to the private sector during the COVID-19 pandemic in El Salvador and Georgia using firm-level data collected before and during the pandemic. The two countries are selected because eligibility criteria for support involved pre-pandemic features of firms, as opposed to more prevalent criteria directly linked to firms’ experiences during the pandemic and that greatly exacerbate concerns about selection bias in estimation. Four outcome variables are studied relating to firms’ workforce, hours of operations, and expectations. Matching and panel estimation techniques are used on full and restricted samples, with the latter aimed at reducing selection bias. Government support appears to have helped firms avoid a reduction in operations in El Salvador, mainly through cash transfers, which also helped in terms of permanent workers, with the latter effect counteracted by wage subsidies. Smaller firms in Georgia appear to have benefited more from government support, mostly through fiscal relief, which was partially counteracted by wage subsidies that benefited larger firms more. The finding that smaller firms have benefited more helps raise confidence in the analysis as strong negative selection bias is expected in this context. Manufacturers of textiles and garments in El Salvador and hotels and restaurants in Georgia appear to have benefited from government support, but the patterns in other sectors are mixed and country-specific, highlighting potential complexities of attempting to target sectors.
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Product: Research Papers
Author(s): Adam Aberra , Gemechu Aga , Filip Jolevski , Nona Karalashvili
Year: 2022
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This paper introduces and provides a descriptive analysis of data from more than 15,000 detailed interviews of representative samples of informal businesses operating in 24 cities across seven countries, namely, India, Iraq, the Lao People’s Democratic Republic, Mozambique, Somalia, Zambia, and Zimbabwe. The paper is a companion paper to a study that presents the methodological underpinnings of the informal business data collection. It is an innovative application of area-based adaptive cluster sampling, rendering a representative sample of these businesses. The paper presents salient descriptive results of the data to motivate further research. The World Bank’s Enterprise Analysis unit started collecting data from the informal sector using the adaptive cluster sampling method in 2017. The combined and standardized data show that informal businesses are small, young, mostly started out of necessity rather than as an opportunity for growth, largely detached from the rest of the economy, and with meager earnings. Few of the informal businesses have ever considered registering formally, with the majority perceiving no benefits from doing so.
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Product: Research Papers
Author(s): Asif M. Islam , Jorge Rodriguez Meza
Year: 2021
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Several studies in the literature have adopted attitude or perception-based survey questions to evaluate the business environment and its effect on firms. The Enterprise Surveys of the World Bank are not an exception. In the case of the Enterprise Surveys, these questions involve rating an element of the business environment at the end of each section of the survey instrument. Such questions are often used but sometimes are inconsistent with responses elicited on the experience of the firm over a specific timeframe—experience-based questions. The literature is mixed as to whether perception-based questions are susceptible to anchoring or context effects. In this study, an experiment is set up to explore whether perceptions of the business environment are stable or vulnerable to the ordering of questions in the Enterprise Surveys questionnaire. The experiment entails randomizing the placement order of the perception-based questions at the end of a section or at the beginning of the survey. Significant question-order effects are uncovered only for perceptions of corruption and business licensing and permits but not the other elements, after accounting for a variety of factors. The study recommends that analysis in these two areas should go beyond perception-based questions and verify their findings with experience-based questions.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2009
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This note argues that consumer behavior may be as important as firm behavior for the level of competition in consumer industries such as retailing. Using data on 1,948 retail stores in India, the note highlights three important findings. First, the number of nonworkers in the household, a proxy for the time costs of shopping, has a large effect on competition. Moving from the city with the least to the most number of nonworkers increases competition by 84 percent of its average level. Second, competition is higher in cities with lower incomes. However, this income- competition relationship disappears once we account for differences in the number of nonworkers across cities. The result casts doubt on the explanation of the negative income- competition relationship reported in the existing literature. Third, some of the popular beliefs on competition in Indian retailing do not find support in the data.
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Product: Research Papers
Author(s): Boris Fišera , Roman Horváth , Martin Melecký
Year: 2019
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This paper examines the effect of Basel III implementation on the access to finance of small and medium-size enterprises in 32 emerging markets and developing economies. Analyzing rich, repeated cross-sectional data and a panel of matched firm-bank data in a difference-in-differences setting with sample selection adjustment, the authors find a short-term, moderately negative effect of Basel III on small and medium-size enterprises’ access to financing. The results suggest that firms with access to bank credit prior to Basel III implementation could have been affected less than firms that were initially on the fringes of financial inclusion—firms with only a bank account. The paper fails to find any additional heterogeneous effects across firm size or age, bank capitalization or liquidity, or across countries that transitioned to Basel III from Basel II versus Basel 2.5. Overall, the initial conditions of the banking system as well as of complementary business and financial regulation can co-determine the size of short-term costs from the newly implemented global financial regulation in emerging markets and developing economies.
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Product: Research Papers
Author(s): Mohammad Amin , Yew Chong Soh
Year: 2019
File Size:
What sorts of conditions make some countries more prone to corruption than the others? This is an important question for understanding how corruption arises and how to combat it. The present paper attempts to answer this question by exploring the link between the size of the country and corruption. Economic theory suggests advantages and disadvantages of being a large country. Fixed costs in monitoring and punishing corrupt politicians and bureaucrats implies lower corruption in larger countries. However, congestion or administrative costs may escalate with country size. Further, greater diversity in the larger countries implies that such countries may find it harder to reach a consensus on growth-enhancing anti-corruption reforms. Thus, the corruption and country size relationship is an empirical issue. Using firm-level survey data for 135 countries, this paper finds that the level corruption experienced by the firms is positively correlated with country size. This holds for a measure of overall corruption and petty corruption that arises in availing specific government services. According to a conservative estimate, moving from a country the size of Namibia (25th percentile level in size) to a country the size of Morocco (75th percentile level) is associated with an increase in the level of overall corruption by 0.28 percentage point or about 23 percent of its mean value. The results are robust to several controls, alternative corruption measures, sample alternations, and different country size measures.
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Product: Research Papers
Author(s): Jeffrey R. Bloem , Amy Damon , David C. Francis , Harrison Mitchell
Year: 2023
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Violent conflict between nomadic herders and settled— mostly agricultural—communities in Nigeria occurs as both groups clash over the use of land and resources, in part, due to a changing climate. This paper uses panel data from 2010 through 2019 to study the labor responses of individuals to exposure to herder-related violence during the post-planting and post-harvest seasons. Specifically, it considers a “shadow of violence” channel, where recent exposure to a violent event alters labor-related responses to a subsequent event. Results find that in the post-planting season, exposure to a herder-related violent event leads to an increase in informal work for both men and women, a decrease in agricultural work for men, and an increase in total hours worked for women among households that have previously been exposed to herder-related violence in the preceding six months. The paper also considers two other specific forms for a “shadow of violence” channel—namely, raised tensions over open-grazing bans enacted in 2016 and 2017 within three states and a drastic peak in violence in the first half of 2018—and find similar results. Lastly, findings show how household exposure to violence can have so-called knock-on effects. Households exposed to herder-related violence in the previous post-planting season shift consumption and crop selling patterns in the post-harvest season. These findings highlight the gender-specific labor response to violence and document the role of the informal sector as a partial safety
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Product: Research Papers
Author(s): Asif M. Islam , Jorge Rodriguez Meza
Year: 2023
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This study develops a measure of firm-level credit constraints by leveraging refinements in survey instruments for a widely used database. Using data on more than 65,000 firms across 109 economies, the study uncovers several insights. Around 30 percent of firms in the formal private sector are credit constrained. Firms that are credit- constrained tend to be smaller and negatively correlated with performance. The more developed the economy, the lower the share of credit-constrained firms. One striking finding is that 52 percent of firms do not apply for loans as they have sufficient credit. For some economies, this may be more indicative of poor opportunities for the expansion of firms and thus the lack of demand for credit. The findings suggest that for policies that improve access to credit to be effective, they should go hand in hand with interventions that provide opportunities for firms to expand.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam , Usman Khalid
Year: 2019
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Using firm-level survey data on registered private firms collected by the World Bank’s Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparable data are available. The results show that labor productivity in the upper-middle-income countries is about 57.5 percent lower than in the high-income countries. The productivity difference is robust and holds for firms of different sizes and industries. The analysis uses the Oaxaca-Blinder decomposition to identify the sources of the productivity gap. It finds that the endowment effect and the structural effect contribute roughly equally to the productivity gap. Several firm- and country-level variables determine the productivity gap. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management proxied by international quality certification. Factors that contribute most via the structural effect include market size, secondary education attainment, and law and order. Thus, the results underline the importance of human capital, institutions, and market size for closing the productivity gap between the upper-middle-income and high-income countries.
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Product: Research Papers
Author(s): Marie Hyland , David C. Francis , Jorge Rodriguez Meza
Year: 2019
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An expanding body of literature has shown that better management practices can offer significant boosts to firms’ productivity; this research illustrates that firms in South America are no exception. Using recent Enterprise Survey data from seven countries in South America (Argentina, Bolivia, Colombia, Ecuador, Paraguay, Peru, and Uruguay), the paper explores the various dimensions and drivers of management practices and analyzes how they are related to productivity. This is an important topic to investigate, given the lagging levels of productivity growth in the region. If management practices can boost firms’ productivity, this may be a cost-effective way to accelerate economic growth. The results show that improved management practices are associated with higher levels of productivity in all countries, and it is the impact of improved management specifically in larger firms that is driving the overall results. Indeed, in some countries, specifically Argentina, Paraguay, and Peru, it is only among larger firms that there is a positive link between management practices and productivity.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2025
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This Brief examines issues related to women’s participation as workers, top managers, and owners of private firms in 27 European Union countries (EU-27), using the rich database of the World Bank Enterprise Surveys. The analysis focuses on EU regions varying between about 800,000 and 3 million inhabitants (NUTS2-level groupings). Overall, women’s participation as workers, top managers, and firm owners is statistically significantly less than that of men. Surprisingly, richer NUTS2 regions experience a larger gender gap favoring men in employment, top manager positions, and firm ownership. Another worrying feature is that relative to men, women workers tend to be concentrated in firms that are less productive and pay low wages. Thus, closing gender gaps in income requires not just more jobs but also better quality of jobs for women. Having a woman as the top manager of the firm is associated with a higher share of women workers in the firm, but this effect is much stronger when the firm initially has a relatively high share of women workers. A gender gap also exists in labor productivity, which is lower for women-run firms than men-run firms, and for firms with higher women’s ownership. These gaps in labor productivity are much larger at lower quantiles of labor productivity, implying the presence of sticky floors but not necessarily glass ceilings in the EU-27 countries. The Brief identifies some of the factors that are correlated with the average gender labor productivity gap and estimates their contribution to the gap. There is no systematic difference in the level of constraints, including access to finance, faced by men-run versus women-run firms and/or by firms at different levels of women’s ownership.
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Product: Research Papers
Author(s): Asif M. Islam , Mohammad Amin
Year: 2022
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This study uncovers a gender labor productivity gap among informal firms in 14 developing economies. The results show that labor productivity is approximately 15.2 percent (or 0.165 log point) lower among women-owned than menowned informal firms. Decomposition techniques reveal several factors that contribute to lower labor productivity of women-owned informal firms relative to men-owned informal firms. These include lower education, lower experience, lower capitalization, and less protection from crime among women owners than men owners of informal firms. However, the smaller size of the women-owned firms and their greater return from producing or selling under contract and from security payments narrows the productivity gap. The results provide several specific and general policy recommendations for improving the labor productivity of women-owned informal firms and closing the gap with male-owned informal firms. For one, a substantial amount of the productivity gap can be closed by providing more resources to women such as education, managerial experience, and physical capital. The study also provides some preliminary results on another important policy objective —the costs and benefits of formalization as perceived by women-owned versus men-owned informal firms.
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Product: Enterprise Notes
Author(s): Nona Karalashvili , Domenico Viganola
Year: 2021
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This brief provides a descriptive analysis of the evolving effect of the COVID-19 pandemic on the private sector of 40 countries. It focuses on the essential aspects of business operations: namely, firms’ survival, production of goods and services, and jobs. Firms have suffered massive demand and supply shocks, affecting nearly all sectors. These shocks and the consequent drop in revenues have dried up firms’ cash flows, depleting their working capital and putting the private sector under considerable financial distress. This brief also examines the effect of the pandemic on firms’ liquidity, providing general assessments of the variation of these effects by country income level and firm characteristics. Firms in lower-income countries seem to have been hit harder across several measures, such as declines in sales and the incidence of overdue financial obligations. Within countries, small and medium-sized enterprises (SMEs) with 5 to 99 employees seem to have fared more poorly than large firms. While some signs of a recovery in terms of sales and capacity utilization are emerging, the recovery is fragile, as it bypasses important aspects such as liquidity and job creation. For a full post-pandemic recovery, it is important that sound businesses that are facing a temporary liquidity problem survive, and the workforce rebounds.
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Product: Research Papers
Author(s): Mohammad Amin , Hulya Ulku
Year: 2019
File Size:
Using firm-level data from more than 39,000 firms in 111 economies, this paper tests the hypothesis that corruption impedes productivity more at higher levels of regulation. The analysis finds that there is a significant negative relationship between corruption and firm productivity when regulation is high and an insignificant relationship when it is low. These findings are robust to different controls and specifications.
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Product: Enterprise Notes
Author(s): Marie Hyland , Nona Karalashvili , Silvia Muzi , Domenico Viganola
Year: 2021
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This brief uses firm-level data, collected between May 2020 and May 2021 in 41 countries, to provide descriptive evidence on the differential effect of the COVID-19 crisis on female- and male-owned firms. Data suggest that while female-owned and male-owned businesses closed permanently at the same rates, female-owned firms were more likely to have temporarily closed during the crisis and to have closed for a longer duration. When able to stay in business, female-owned firms were more likely to experience a decrease in demand for their products or services and supply of intermediate inputs than male-owned firms. They also reduced the size of their workforce more than their male counterparts and were more likely to reduce hours worked. Finally, female-owned firms suffered deeper financial distress than male-owned firms. Nevertheless, female and male-owned firms show similar optimism of returning to normal levels of sales or workforce in the near future.
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Product: Research Papers
Author(s): Christopher Hoy , Filip Jolevski , Anthony Obeyesekere
Year: 2024
File Size:
This paper examines the pervasiveness of tax evasion among firms in Indonesia and the characteristics associated with higher levels of noncompliance. Tax evasion is estimated through a randomized, double-list experiment embedded in a nationally representative survey of 2,955 registered firms. This revealed whether firms pay all the taxes they owe without them having to disclose this directly. Across both list experiments, around a quarter of the firms indirectly reveal that they have evaded taxes. Firms that do not export, face intense competition from informal firms, and believe tax administration is a major obstacle to their business are the most likely to evade taxes. These findings help to inform the enforcement activities of tax authorities in middle-income countries, which face substantial challenges in estimating levels of tax evasion and identifying noncompliant taxpayers.
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Product: Research Papers
Author(s): Mohammad Amin , Yew Chong Soh
Year: 2020
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Regulation often creates opportunities for public officials to extract bribes. If this is true, deregulation offers a simple way to combat corruption. However, empirical evidence on the corruption and regulation nexus is limited. Further, the corruption indices used are based on experts’ opinions, which may suffer from perception bias. The present paper attempts to address these shortcomings using firm-level survey data for 131 mostly developing countries on the experiences of the firms with bribery and regulatory burden. Exploiting within-country and industry-level variation in regulatory burden, the analysis finds a large, positive effect of regulatory burden on corruption. For the baseline results, the bribery rate is higher by about 0.03 percentage point for each percentage point increase in the regulatory burden. The finding is robust to several endogeneity checks.
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Product: Research Papers
Author(s): Mohammad Amin , Franziska L. Ohnsorge , Cedric Okou
Year: 2019
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Using firm-level survey data for a large cross section of countries, the paper assesses the gap in labor productivity between formal and informal firms in developing countries for which comparable data are available. It also investigates the impact of competition from informal firms on the labor productivity of formal firms. The results show that on average, the labor productivity of informal firms is about one-fourth that of formal firms. Moreover, the labor productivity of formal firms that face competition from informal firms is about 75 percent of the average labor productivity of formal firms that do not experience informal competition. This suggests that competition from the informal sector can erode formal firms’ market share and the resources available to boost productivity where formal firms shoulder the additional cost of regulatory compliance. These findings are robust to a range of firm and country characteristics as well as checks for endogeneity concerns.
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Product:
Author(s): M. Nazım Tamkoç
Year: 2023
File Size:
This paper studies the relationship between distortions, plant size, and bribery possibilities. In a distorted economy, bribery is a transfer from a private party to government officials to ‘get things done’. Enterprise Surveys data shows that small plants spend a higher fraction of their output on bribery than big plants. In this paper, a one-sector growth model is developed in which size-dependent distortions, bribery opportunities, and different plant sizes coexist. In the model, bribery is endogenous in the sense that managers decide to use it as a way to deal with distortions. Two sets of exercises are conducted to quantify the interplay of size-dependent distortions and bribery. First, the model parameters are calibrated to generate the plant size distribution of the U.S., by assuming the U.S. is free of distortions. Then, size-dependent distortions are introduced to the undistorted economy, and their effects with and without bribery opportunities are compared. Counterfactual exercises show that size-dependent distortions become less distortionary in the presence of bribery opportunities since plants are able to avoid distortions by paying larger bribes. Second, the model is calibrated with distortions and bribery opportunities using Turkish data. The choice of this country for analysis does not imply that bribery or size-dependent distortions are particularly large in Türkiye relative to countries of comparable development. The choice is driven by the availability of data on both the plant size distribution and spending on bribery in the country. The results indicate that the inferred level of distortions is sizable for all plants. The removal of distortions, which would eliminate the incentive for paying bribes, can have a substantial effect on both the output and the mean plant size which could increase by 63.6 and 82.5 percent, respectively.
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Product: Research Papers
Author(s): Markus Goldstein , Paula Gonzalez , Sreelakshmi Papineni , Joshua Wimpey
Year: 2022
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This paper estimates the impact of a large negative childcare shock on gender gaps in entrepreneurship using the shock created by national COVID-19 school closure policies. The paper leverages a unique data set of monthly enterprise data collected from a repeated cross-section of business owners across 50 countries via Facebook throughout 2020 and in 2021. The paper shows that, globally, female-led firms were, on average, 4 percentage points more likely to close their business and experienced larger revenue declines than male-led firms during the COVID-19 pandemic in 2020 (male firms closed at a rate of 17 percent in 2020, and 12 percent in 2021). The gender gap in firm closures persisted into 2021. The closing of schools, a key part of the care infrastructure, led to higher business closures, and women with children were more likely to close their business in response to a school closure policy than men with children. Female entrepreneurs were found to take on a greater share of the increase in the domestic and care work burden than male entrepreneurs. Finally, the paper finds that women entrepreneurs in societies with more conservative norms with respect to gender equality were significantly more likely to close their business and increase the time spent on domestic and care responsibilities in response to a school closure policy, relative to women in more liberal societies. The paper provides global evidence of a motherhood penalty and childcare constraint to help explain gender inequalities in an entrepreneurship context.
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Product: Research Papers
Author(s): Mohammad Amin , Usman Khalid
Year: 2023
File Size:
Ethnic fractionalization has both positive and negative consequences. It is contended that the positive effects due to skill complementarity in the production process apply to large firms that have more complex and diversified pro¬duction structures. Because small businesses rely more on public goods and have less access to institutions, the negative effects of lower quality public goods and higher transaction costs have a greater impact on them. Consistent with this viewpoint, it is found that a larger firm size significantly mitigates the negative impact of higher ethnic fractional¬ization on the level and growth rate of labor productivity in manufacturing firms across 84 developing countries. There is no robust and significant impact of ethnic fractionaliza¬tion on large firms for the main and most of the other firm size categorizations considered. The results are confirmed by the instrumental variables estimation method, which uses the duration of early human settlement in each country to instrument ethnic fractionalization. Evidence is provided on the potential mechanisms by which ethnic fractional¬ization affects small versus large firms. The findings have significant policy implications, which are discussed in detail.
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Product: Enterprise Notes
Author(s): Tanima Ahmed , Silvia Muzi , Kohei Ueda
Year: 2020
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While efforts are currently in place to collect data on the economic consequences of the COVID-19 pandemic, this note looks at the experience of the 2008 financial crisis to gain insights on possible differential effects of crises on female and male entrepreneurs. Specially, the note uses firm-level data collected immediately after the 2008 financial crisis in six countries in Eastern Europe and Central Asia (Bulgaria, Hungary, Latvia, Lithuania, Romania, and Turkey) to look at two aspects of the differential effect of the crisis. First, whether there is a difference in the exit rate for firms with male vs. female top managers; and second, whether, among firms that stayed in business, female-managed firms are affected disproportionally. Results show that firms run by female top managers are more likely to exit the market. Secondly, when able to stay in business, male and female-managed firms suffered a similar impact in the short term; however, female-managed firms suffered more than male-managed firms in the longer term.
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Product: Enterprise Notes
Author(s): Filip Jolevski , Sanja Madzarevic-Sujster
Year: 2022
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As the COVID-19 pandemic has continued to take its toll on human life, businesses in North Macedonia have continued to struggle despite a return to some normalcy. ¬This note examines the state of the private sector in North Macedonia by comparing the performance of businesses during the period of adjustment to the pandemic in April 2021 with the initial impact in September 2020 and the baseline before the crisis, drawing on a standard round of the Enterprise Survey in 2019 and two follow-up surveys in 2020 and 2021. While the second round of the follow-up survey revealed signs of some early-stage recovery, on average firm sales were still worse off than at the outbreak of the pandemic. Small and medium enterprises (SMEs) have been facing difficulties obtaining financing and were more likely to be overdue on their financial obligations than in fall 2020. A quicker and stronger recovery could be promoted through sound policies that aim at increasing access to financing, enhancing digitalization, and improving firm management and human capital, as well as the effective implementation of insolvency procedures.
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Product: Enterprise Notes
Author(s): David C. Francis
Year: 2019
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This note summarizes findings from a new paper, which lays out a methodology to determine the types of mechanisms—be they the legal system, civil organizations, or shared business interest—that firms use when entering into agreements with their suppliers and customers. Specifically, the note summarizes the data exploration technique (known as Latent Class Analysis) used in the paper and shows some basic results in terms of the attributes of each class. Four basic classes are used for dealing with suppliers (pure bilateralism, bilateralism with private support, bilateralism with legal support, and strong comprehensive) and with customers (pure bilateralism, bilateralism with private support, bilateralism with weak support, and weak comprehensive). Lastly, some basic correlations between the likelihood of class membership and firm-level characteristics are shown.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Yew Chong Soh
Year: 2019
File Size:
Firm-level survey data on registered private firms reveal that firms in Malaysia have much lower labor productivity than their counterparts in 43 upper-middle-income and 14 high-income countries. It will be difficult for Malaysia to achieve the high-income status without a significant improvement in labor productivity of the private sector firms. The lower productivity of Malaysian firms is pervasive and holds across sectors and firm-sizes. Drivers of productivity such as outward orientation of the firms, innovation, training of workers and top manager’s experience are all lagging in Malaysia compared to the high-income and upper-middle-income groups. Malaysia does outperform in terms of low regulatory burden on the firms and better quality of power supply. However, corruption and crime are worse in Malaysia than in the high-income and even upper-middle-income countries.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Amanda Zarka
Year: 2018
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Recent firm-level survey data collected by the World Bank’s Enterprise Surveys (ES) shows that about a quarter of all Malaysian firms have a female top manager. Female top managers are more likely to be found in large firms than in small firms, in the retail sector vs. the rest of the economy, and in exporting than in non-exporting firms. In contrast to what the literature might suggest, in Malaysia, firms with a female top manager have higher labor productivity on average than firms with a male top manager. However, the business environment, along several important dimensions such as the regulatory burden, corruption, and the crime and security environment, is more difficult for firms with female top managers.
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Product: Research Papers
Author(s): Asif Islam , Amparo Palacios-Lopez , Gaddis Isis , Mohammad Amin
Year: 2018
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This study analyzes gender differences in labor productivity in the formal private sector, using data from 128 mostly developing economies. The results reveal a sizable unconditional gap, with labor productivity being approximately 11 percent lower among female- than male-managed firms. The analyses are based on female management, which is more strongly associated with labor productivity than female participation in ownership, which has been the focus of most previous studies. Decomposition techniques reveal several factors that contribute to lower labor productivity of female-managed firms relative to male-managed firms: fewer female- than male-managed firms protect themselves from crime and power outages, have their own websites, and are (co-) owned by foreigners. In addition, in the manufacturing sector, female-managed firms are less capitalized and have lower labor cost than male-managed firms.
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Product: Research Papers
Author(s): Asif Islam , Silvia Muzi , Mohammad Amin
Year: 2018
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Institutions are defined as the set of rules that govern human interactions. When these rules are discriminatory, they may disempower segments of a population in the economic spheres of activity. This study explores whether laws that discriminate against women influence their engagement in the economy. The study adopts a holistic approach, exploring an overall measure of unequal laws also known as legal gender disparities, and relates it to several labor market outcomes for women. Using data for more than 60,000 firms across 104 economies, the study finds that unequal laws not only discourage women's participation in the private sector workforce, but also their likelihood to become top managers and owners of firms. Suggestive evidence indicates that access to finance and corruption are pathways by which legal gender disparities disempower women in the labor market.
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Product: Research Papers
Author(s): Kinley Salmon , Nabila Assaf , David C. Francis
Year: 2018
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This paper details the results from the first comprehensive survey of private firms across major urban areas in the Syrian Arab Republic – including Aleppo, Homs, Hama, Latakia, and Damascus – since the conflict began in 2011. This builds on the World Bank's Enterprise Survey from 2009 and attempts to survey each of the 508 firms from 2009 again. The survey highlights the major challenges facing firms in Syria today, such as access to electricity, fuel, and water. Yet, loss of workers, managers, and supply chain relationships are also notably severe. Rebuilding the social and human capital of Syria may be even more difficult than the bricks and mortar. The paper also identifies the ways firms have been affected in their prices, sales, supply chains, taxation, and costs as well as how they have adapted in financing and employment. These constraints and impacts are also analyzed at the subnational level and across sectors. Firms in Aleppo stand out for their uniquely difficult challenges and responses that are sometimes at odds with the rest of the country. Finally, the paper analyzes firm exit from 2009 to 2017 and finds that higher productivity firms from 2009 were more likely to survive, except in Aleppo where the reverse holds. The paper hypothesizes that productive firms facing the particularly severe destruction in Aleppo may have made a different calculation compared with productive firms elsewhere: to use their capabilities to leave rather than to use their capabilities to weather the storm.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Amanda Zarka
Year: 2017
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This note analyzes various issues related to women workers in Malaysia’s formal private sector using the World Bank’s Enterprise Surveys (ES) data. The proportion of women among all workers in Malaysia is on par with other upper middle income group economies but less than the regional average. In Malaysia, the number of women among all workers varies with the firm’s size, sector, management characteristics and whether or not training is provided to workers by the firm. Firms in Malaysia seem to lag behind firms in other countries in terms of how friendly some of the labor laws are to women workers. Suitable reforms of these laws can potentially increase women’s employment in Malaysia’s formal private sector.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Jean Arlet , Hulya Ulku
Year: 2017
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How do Malaysia’s exporting firms perform in areas key to the long-term competitiveness of the country, such as productivity or innovation? What obstacles do they face? This note aims to provide insights into these questions using recent Enterprise Surveys data from the World Bank Group.
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Product: Research Papers
Author(s): Judy Yang
Year: 2016
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This paper examines the impact of the governance environment on SME performance, concentrating on differences between innovators and non-innovators. A poor environment is related to lower profits and sales for SME innovators than non-innovators. Using a complementary indicator, SME innovators tend to have higher sales and profits when courts are perceived to be strong.
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Product: Research Papers
Author(s): Asif Islam , Jorge Rodríguez-Meza , Silvia Muzi
Year: 2016
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Private investment can be an important engine of economic growth in East African countries, which, despite recent growth rates, are still plagued with adverse economic conditions. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges toward adoption by private firms. This study explores whether there is a relationship between firm adoption of mobile money and firm investment. Using firm-level data that are nationally representative of the private sector in three East African countries.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2016
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Using survey data on informal firms in Myanmar, a number of issues related to firm-size, productivity, business environment, gender disparity and registration costs and benefits are discussed.
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Product: Enterprise Notes
Author(s): Asif Islam , Mohammad Amin
Year: 2016
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This note explores the role of legal institutions in influencing women’s employment in private firms in developing countries.
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Product: Research Papers
Author(s): Arvid Malm , Johan Eklund , David C. Francis , Nan Jiang
Year: 2016
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Payroll taxes in Sweden were reduced substantially for people ages 26 years or younger on July 1, 2007. The objective of this tax cut was to lower youth unemployment. The question of how gains from payroll taxes are distributed between workers and owners of firms has been the focus of considerable theoretical and empirical attention. This paper examines the impact of the Swedish reform on firm profits using individual-level and firm-level microdata. Previous investigations into the effects of this particular reform have focused entirely on the effects on employment and wages, or have been limited to the retail sector. This paper finds that the reform was not associated with a general increase in firm profitability, but that there is some evidence of a positive effect on profits in the retail and wholesale sector.
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Product: Research Papers
Author(s): Xavier Cirera , Silvia Muzi
Year: 2016
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Little is known about innovation in developing countries, partly because of the lack of comparable and reliable data. Collecting data on firm-level innovation is challenging because of the subjective definition of what determines an innovation, a problem that is exacerbated in developing countries where innovation is likely to be more incremental and less radical. This paper contributes to the literature by presenting the results of an experiment aiming to identify the survey instrument that better captures firm-level innovation in developing countries.
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Product: Research Papers
Author(s): Mehnaz Safavian , Mohammad Amin , Joshua Wimpey
Year: 2016
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The informal sector across Africa is ubiquitous, with a significant number of people engaged in small and household enterprises outside formal wage employment. Kenya’s informal sector is large and dynamic - 95 percent of the country’s businesses and entrepreneurs are in informal sector.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam , Augusto Lopez-Claros
Year: 2016
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This study contributes to the literature on legal institutions and determinants of adult mortality. The paper explores the relationship between the presence of domestic violence legislation and women-to-men adult mortality rates. Using panel data for about 95 economies between 1990 and 2012, the analysis finds that having domestic violence legislation leads to lower women-to-men adult mortality rates.
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Product: Research Papers
Author(s): Asif Islam
Year: 2016
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Economic theory predicts that a rise in police presence will reduce criminal activity. However several studies in the literature have found mixed results. This study adds to the literature by exploring the relationship between the size of the police force and crime experienced by firms. Using survey data for about 12,000 firms in a cross-section of 27 developing countries, the study finds that increasing the size of the police force is negatively associated with crime experienced by firms.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam , Alena Sakhonchik
Year: 2016
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For a sample of 53 developing countries, the results show that women's employment among private firms is significantly higher in countries that mandate paternity leave versus those that do not. A conservative estimate suggests an increase of 6.8 percentage points in the proportion of women workers associated with the mandating of paternity leave.
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Product: Research Papers
Author(s): Jorge Rodríguez-Meza , David C. Francis
Year: 2015
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The results for 117 developing economies using the World Bank’s Enterprise Survey Data, show that (i) small and medium enterprises and older establishments are the dominant employers in the nonagricultural private sector labor force in developing economies, and (ii) net job creation is negatively correlated with establishment age and, although the effect of size is also negative, its significance is sensitive to the definition and methods used.
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Product: Research Papers
Author(s): Xavier Cirera
Year: 2015
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Kenya’s economy has undergone a significant process of structural transformation over the last decade. The analysis of this report shows some important stylized facts regarding firm level innovation in Kenya.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam
Year: 2015
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Several studies explore the differences in men’s and women’s labor market participation rates and wages. Some of these differences have been linked to gender disparities in education attainment and access. Using firm-level data for 73 developing countries, the analysis finds strong evidence that countries with a higher proportion of female top managers also have higher enrollment rates for women relative to men in primary, secondary, and tertiary education.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2015
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The World Bank’s Enterprise Surveys regularly collect data on private firms in the developing world. This note highlights the critical importance of such collection efforts for a better understanding of important development issues related to the private sector. Specifically, this note considers female participation in management, ownership and workforce and how such participation correlates with various firm characteristics.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Asif Islam , Po Yin Wong
Year: 2015
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This note highlights important findings on the use of imported intermediate inputs by private firms in developing countries. All the findings are based on firmlevel data collected by the World Bank’s Enterprise Surveys.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Asif Islam
Year: 2014
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This note looks at the proportion of female top managers in private firms in 86 developing countries and its relationship with factors including country income level, gender disparity in education, firm-size, etc. The average proportion of top female managers is quite low at about 19 percent. This appears to be driven in part by gender disparity in education level and the lack of female managers in relatively large firms.
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Product: Enterprise Notes
Author(s): David C. Francis , Silvia Muzi , Jorge Rodríguez-Meza
Year: 2014
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Creating productive jobs is one of the greatest challenges in any economy. The surveys look at which types of firms contribute the most to net job creation and at the relationship between job creation and productivity. The Enterprise Surveys identify the challenges facing firms when it comes to training and hiring, information that can be used to inform strategies to match worker skills with job openings.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam
Year: 2014
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This study explores the relationship between mandating a nondiscrimination clause in hiring practices along gender lines and the employment of women versus men in 58 developing countries. The study finds a strong positive relationship between a nondiscrimination in hiring clause and women’s relative to men’s employment.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Silvia Muzi
Year: 2014
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This topic note analyzes female participation in the private sector in Latin America and the Caribbean, comparing gender indicators across business sectors, sizes of economies, and between regions of the world. Differences between women-run and men-run firms are also explored in this note.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam
Year: 2014
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For a representative sample of manufacturing firms in 26 countries, this paper shows that changes in the cost of importing over time are significantly and negatively correlated with changes in the percentage of firms’ material inputs that are of foreign origin. Furthermore, the paper shows that there may be a nonlinear relationship between import costs and imports. These findings are important, as recent stud-ies point toward a significant positive effect of imported inputs on productivity and growth. It is hoped that the present paper inspires more work on the determinants of the use of imported inputs, especially in developing countries.
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Product: Research Papers
Author(s): Mohammad Amin , Asif Islam
Year: 2014
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The paper analyzes the relationship between country size and the use of imported intermediate inputs by firms in 76 developing countries. Recent evidence indicates that the use of imported inputs can have a large, positive effect on productivity and growth, thus motivating a better understanding of the determinants of foreign inputs.
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Product: Research Papers
Author(s): Asif Islam
Year: 2014
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This study explores the relationship between government private subsidies and entrepreneurship by combining macroeconomic government spending data with individual level entrepreneurship data. The paper finds a negative association between the share of private subsidies and entrepreneurship. However, findings are less straightforward when the analysis delves deeper into the components of private subsidies and their association with different types of entrepreneurship.
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Product: Research Papers
Author(s): Asif Islam , Mohammad Amin
Year: 2014
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This research paper uses firm-level data for 87 developing countries to analyze how the likelihood of a firm having female vs. male top manager varies across sectors. The service sector is often considered to be more favorable toward women compared with men vis-à-vis the manufacturing sector.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2014
File Size:
This topic note analyzes crime measures for the private sector in Latin America and the Caribbean, comparing crime indicators across firm characteristics, across countries, and between regions of the world. How crime-related losses and expenses have changed over time and how these costs compare to losses due to insufficient electricity are also explored in this note.
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Product: Enterprise Notes
Author(s): David C. Francis , Mohammad Amin , Jorge Rodríguez-Meza
Year: 2014
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This topic note analyzes regulatory burden measures for the private sector in Latin America and the Caribbean, comparing these indicators across countries within the region and across time. Related to regulatory burden, the incidence and depth of bribery are also explored. Corruption measures are benchmarked with other regions of the world which have comparable Enterprise Surveys data.
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Product: Research Papers
Author(s): Asif Islam
Year: 2014
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This study uses data for about 12,000 firms in 27 developing countries and finds that higher economic growth is associated with lower crime. This relationship is stronger for small and medium firms than large firms.
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Product: Research Papers
Author(s): Rita Ramalho , Jorge Rodríguez-Meza , Judy Yang , Veselin Kuntchev
Year: 2014
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This paper uses a new measure to explore the availability of credit to SMEs in the developing world. SMEs are found to be more credit constrained and more likely to finance their working capital and investments through trade credit and informal sources of finance. Besides size, other firm characteristics are examined.
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Product: Research Papers
Author(s): Khrystyna Kushnir , Mohammad Amin
Year: 2013
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The paper contributes to the literature on gender-based disparity in human capital by extending existing results on education attainment to the number of years of experience that female vs. male managers have among informal or unregistered firms. Using the case of Rwanda, results show that the number of years of experience for female managers is significantly lower, equating 80-88 percent that of male managers. We also find that this gender disparity is higher among the relatively older managers and among firms in the relatively less developed city of Butar compared with the more developed city of Kigali.
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Product: Research Papers
Author(s): Jamal Ibrahim Haidar , Mohammad Amin
Year: 2013
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It is argued that compared with large countries, small countries rely more on trade and therefore they are more likely to adopt liberal trading policies. The present paper extends this idea beyond the conventional trade openness measures by analyzing the relationship between country size and the number of documents required to export and import, a measure of trade facilitation.
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Product: Research Papers
Author(s): Thorsten Beck , Erik Feyen
Year: 2013
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Across the world, supply for financial services rarely matches the demand, given multiple market frictions. This paper discusses the concept of the financial possibilities frontier as a constrained optimum to categorize different problems of shallow financial markets or unsustainable expansion. The paper offers three examples of how to use different data sources to apply the frontier concept to assess the state of financial systems.
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Product: Enterprise Notes
Author(s): Jorge Rodríguez-Meza , Judy Yang
Year: 2013
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This topic note analyzes access to credit for the private sector in Latin America and the Caribbean, comparing access to credit indicators across several characteristics, sectors, and countries within the region. How businesses have performed over time is presented, providing a detailed indication of the direction of several aspects of the private sector.
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Product: Enterprise Notes
Author(s): David C. Francis , Murat Şeker , Federica Saliola
Year: 2013
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This topic note analyzes productivity and employment measures for the private sector in Latin America and the Caribbean, comparing these indicators across several characteristics, sectors, and countries within the region. How businesses have performed over time is presented in depth, over several dimensions, providing a detailed indication of the direction of several aspects of the private sector
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Product: Enterprise Notes
Author(s): Rita Ramalho , Jorge Rodríguez-Meza , Federica Saliola
Year: 2013
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This topic note presents the standardized methodology and details from the implementation of the Enterprise Surveys in 31 countries in Latin America and the Caribbean. The note details several aspects of the surveys as well as basic analytical concepts that are used throughout the topic note series.
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Product: Enterprise Notes
Author(s): Ezequiel Tacsir , Fernando Vargas , Elena Arias-Ortiz
Year: 2013
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This topic note analyzes innovation measures for the private sector in Latin America and the Caribbean, comparing innovation indicators across several characteristics, sectors, and countries within the region. The roles of firm size and exporting status as primary determinants of R&D spending are explored.
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Product: Enterprise Notes
Author(s): Jorge Rodríguez-Meza , Judy Yang , David C. Francis
Year: 2013
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This topic note presents several indicators of the characteristics of businesses in Latin America and the Caribbean’s private sector. The note explores how those characteristics differ within the region and how the landscape of the private sector of the region as a whole compares to other regions in the developing world.
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Product: Enterprise Notes
Author(s): Federica Saliola , Murat Şeker
Year: 2012
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Total factor productivity (TFP) is a crucial measure of efficiency and thus an important indicator for policymakers. Using micro level data from manufacturing industries in 80 developing countries, this note analyzes TFP performance at the firm-level. This note also estimates TFP values obtained at the industry level.
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Product: Enterprise Notes
Author(s): Judy Yang
Year: 2011
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This note compares business environment perceptions using a unique panel data set of Afghani and Pakistani firms interviewed between 2007 and 2010. Survey results show that firm perceptions of the severity and priority of certain business environment elements have changed over time.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2011
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This note highlights differences between informal businesses in two regions of Argentina—Buenos Aires and Chaco. Labor productivity is much higher in Buenos Aires than Chaco. This difference is partly due to higher sales and partly due to lower employment in firms in Buenos Aires. Relative to Buenos Aires, firms in the Chaco region are more likely to use machinery and vehicles in the production process and they also face larger seasonal fluctuations in sales.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2011
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Recently collected data on informal or unregistered firms in Argentina and Peru show significant differences between male- and female-owned firms.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2011
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A recent survey of unregistered or informal firms in Argentina and Peru shows that about 74 percent of the owners have a secondary or higher education. This note compares firms by the education level of the owners to assess how education affects the structure, conduct and performance of informal firms.
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Product: Research Papers
Author(s): Murat Şeker
Year: 2011
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Recent studies have shown that both importers and exporters perform better than firms that serve only domestic markets. Using a detailed plant level dataset from 40 developing countries, this paper shows that there are persistent differences in firm evolution when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only importers, only exporters, and non-traders.
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Product: Research Papers
Author(s): Murat Şeker
Year: 2011
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Trade liberalization policies undertaken between 1950 and 2006 led to an almost 30 fold growth in the volume of international trade. However this increase has not been homogeneous across countries.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2011
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A commonly held view is that female-owned businesses suffer from many disadvantages compared to male-owned businesses. These disadvantages lead, in turn, to relatively lower levels of efficiency and smaller firm-size among female-owned businesses—the female-owned firms under performance hypothesis.
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Product: Enterprise Notes
Author(s): Paulo Correa , Mariana Iootty
Year: 2011
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Recent empirical work finds that Research and Development (R&D) expenditures, particularly from the business sector, tend to move in parallel with gross domestic product (GDP).
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2011
File Size:
Increased documentation required for exports and imports increases the time it takes to clear customs. But this effect is much less for rich than for poor countries and for small vs. large countries.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2010
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From a sample of informal firms in Burkina Faso, Cameroon, Cape Verde, Côte d’Ivoire, Madagascar and Mauritius, this note compares male- and female-owned businesses. We test a number of hypotheses discussed in the literature and find the following results. First, the female-owned business under-performance hypothesis is confirmed, but only for firm-size.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2010
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About 20 percent of firms in the Eastern Europe and Central Asia region are victims of crime during a year. While losses to firms from crime incidents average 0.5 percent of a firm’s annual sales, expenses by firms for security average 1.4 percent of their annual sales. These two costs, equaling 1.9 percent of a firm’s annual sales, are about eight times what firms spend on research and development (R&D) and 1.8 times the reported amount paid in bribes.
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Product: Enterprise Notes
Author(s): Murat Şeker
Year: 2010
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Evidence from aggregate and micro-level data shows that globally engaged firms are better than firms serving only domestic markets in various performance measures. However, inefficiencies in the business environment can affect firms’ exposure to foreign markets. This note focuses on a particular aspect of business environment, namely, labor regulations, and analyzes their relationship with the decision to export.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2010
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A number of studies show that relative to male owned businesses, female owned businesses are smaller in size. However, these studies are restricted to the developed countries. We find similar results for firms in the unregistered sector of developing countries of Burkina Faso, Cameroon, Cape Verde, Ivory Coast, Madagascar and Mauritius.
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Product: Research Papers
Author(s): Caralee McLiesh , Andrei Shleifer , Tim Ganser , Simeon Djankov , Rita Ramalho
Year: 2010
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We present new data on effective corporate income tax rates in 85 countries in 2004 from a survey of all taxes imposed on “the same” standardized mid-size domestic firm. In this cross-section, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity.
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Product: Research Papers
Author(s): Murat Şeker
Year: 2010
File Size:
A large number of studies have shown that contribution of exporters to economic growth and development is much higher than non-exporting firms. This evidence has lead governments to improve their trade policies in order to increase foreign exposure of firms. However, improvements in trade policies can only be fully effective when they are complemented with other regulatory reforms that improve the investment climate for firms.
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Product: Research Papers
Author(s): Paulo Correa , Murat Şeker
Year: 2010
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Many studies have shown that firm growth decreases monotonically with size and age. In this study, the authors investigate employment growth of firms in Turkey with an emphasis on small and medium size enterprises. In Turkey, small and medium size enterprises account for almost 77 percent of employment and play a crucial role in the economy.
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Product: Enterprise Notes
Author(s): Rita Ramalho , Jorge Rodríguez-Meza , Mariana Iootty , Judy Yang , Paulo Correa
Year: 2010
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Some informal or unregistered businesses are established to take advantage of business opportunities (opportunity firms) while others are established because the owner cannot find a satisfactory job (necessity firms). Comparing opportunity vs. necessity informal firms in Africa, this note finds that opportunity firms are more efficient and larger.
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Product: Enterprise Notes
Author(s): Paulo Correa , Mariana Iootty
Year: 2010
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Data from the World Bank’s Financial Crisis Survey show that despite the magnitude of the credit crunch, the majority of firms considered the contraction in demand to be the most important effect of the crisis on their business. In June/July 2009, the corporate sector’s debt-to-sales ratio was moderate. The share of debt in foreign currency was about 26 percent on average, with almost one-fourth of firms reporting a foreign debt ratio higher than 60 percent.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2010
File Size:
Some informal or unregistered businesses are established to take advantage of business opportunities (opportunity firms) while others are established because the owner cannot find a satisfactory job (necessity firms). Comparing opportunity vs. necessity informal firms in Africa, this note finds that opportunity firms are more efficient and larger.
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Product: Enterprise Notes
Author(s): Leora Klapper , Douglas Randall
Year: 2010
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Trade credit is an important source of financing for firms in emerging markets. In this note, we identify the firm and market characteristics associated with the extension of supplier financing. We find that firms that operate in more competitive markets and that are less credit constrained are more likely to offer trade credit to their customers.
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Product: Enterprise Notes
Author(s): Inessa Love , Larry Chavis , Leora Klapper
Year: 2010
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This note uses the standardized Enterprise Survey datasets to systematically study the use of different financing sources for young firms. We find that in all countries, younger firms rely less on bank financing and more on informal financing.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2010
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A comparison of service and manufacturing firms in the informal or unregistered sector in Côte d’Ivoire, Madagascar and Mauritius shows that service firms are larger in terms of total sales and also generate more output per worker. They rely less on physical infrastructure and machines but more on human capital.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2010
File Size:
Using Enterprise Surveys data on 1,948 retail stores in India, this note highlights the key problems and challenges faced by retailers in 41 large cities of India. Inadequate power supply, access to finance, corruption, tax rates, and land-related problems are the most important obstacles to further growth.
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Product: Enterprise Notes
Author(s): Rita Ramalho , Jorge Rodríguez-Meza , Judy Yang , Mariana Iootty , Paulo Correa
Year: 2010
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The latest data of the Financial Crisis Survey show continued negative sales performance, on average, but the general rate of decline seems to have slowed. Permanent employment remained somewhat depressed, with no country having regained its pre-crisis employment level.
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Product: Enterprise Notes
Author(s): Mohammad Amin , Simeon Djankov
Year: 2009
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This note identifies the quality of democracy and the amount of natural resources as important determinants of Doing Business reforms. Reforms are more likely in countries with better democracy and less reliance on natural resources. Differences across countries in overall development as measured by income per capita; initial quality of business environment; and ethnic, linguistic, and religious fractionalization within a country have little to do with the proclivity to reform.
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Product: Enterprise Notes
Author(s): Jessica Leino
Year: 2009
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This note uses unique data from enterprise surveys in three African countries to examine the characteristics of informal and formal microenterprises. Entrepreneurs in the informal sector have different motivations for starting a business from their formal sector counterparts, with about twice as many informal entrepreneurs citing lack of alternative employment opportunities as their main motivation.
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Product: Enterprise Notes
Author(s): Murat Şeker
Year: 2009
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In our highly globalized world, it is crucial for governments to monitor the flow of goods and services across their borders and to attract foreign investment. To be able to implement the most efficient trade policies, policy makers must understand the evolution of firms with foreign exposure.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2009
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This note argues that consumer behavior may be as important as firm behavior for the level of competition in consumer industries such as retailing. Using data on 1,948 retail stores in India, the note highlights three important findings. First, the number of nonworkers in the household, a proxy for the time costs of shopping, has a large effect on competition.
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Product: Enterprise Notes
Author(s): Siddharth Sharma
Year: 2009
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Does the regulation of entry cause informality in the manufacturing sector of developing countries? This note presents evidence from India that suggests that a policy reform that lifted barriers to entry lessened informality. This reduction in informality was accompanied by gains in average labor productivity in the informal sector.
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Product: Research Papers
Author(s): Mohammad Amin , Simeon Djankov
Year: 2009
File Size:
The authors use a sample of 133 countries to investigate the link between the abundance of natural resources and micro-economic reforms. Previous studies suggest that natural resource abundance gives rise to governments that are less accountable to the public and states that are oligarchic, and that it leads to the erosion of social capital.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2009
File Size:
Using a new dataset on informal or unregistered firms in Ivory Coast, Madagascar and Mauritius, this paper identifies the type of firms or entrepreneurs that experience greater obstacles to registering. We find important differences between necessity and opportunity entrepreneurs.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2009
File Size:
Differences between opportunity and necessity firms within the informal sector have long been debated. This paper revisits this debate using a new dataset of informal firms in three African countries. Focusing on average productivity of labor, a measure of firm efficiency, we find that it is much higher for opportunity compared with necessity firms.
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Product: Enterprise Notes
Author(s): Rita Ramalho , Jorge Rodríguez-Meza , Judy Yang
Year: 2009
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Since late 2008, countries around the world have been affected by the global economic slowdown. The Financial Crisis Survey measures the effects of this crisis on 1,686 firms in six countries in Eastern Europe and Central Asia: Bulgaria, Hungary, Latvia, Lithuania, Romania, and Turkey. Survey data show that in these countries, the major effect of the crisis is a drop in demand. It is not a financial crisis - it is a demand crisis.
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Product: Research Papers
Author(s): Murat Şeker
Year: 2009
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Many recent models have been developed to fit basic facts on establishment and industry evolution. While these models yield a simple interpretation of the basic features of the data, they are too stylized to confront the micro-level data in a more formal quantitative analysis. In this paper, I develop a model in which establishments grow by innovating new products.
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Product: Research Papers
Author(s): Mohammad Amin , Simeon Djankov
Year: 2009
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We use a sample of 147 countries to investigate the link between democracy and reforms. Democracy may be conducive to reform, because politicians have the incentive to embrace growth-enhancing reforms to win elections. On the other hand, authoritarian regimes do not have to worry as much about public opinion and may undertake reforms that are painful in the short run but bring future prosperity.
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Product: Enterprise Notes
Author(s): David S. Kaplan
Year: 2009
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Rigid regulations may prevent labor markets from being efficient. We quantify, for 14 Latin American countries, the extent to which rigid labor regulations affect both the hiring and dismissal decisions of firms. Making regulations more flexible would lead to an average net increase of 2.1 percent of total employment.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2008
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The paper provides an alternative way of testing for the theory of legal origins, one based on firm’s perception of how helpful the government is for doing business. We argue that our approach based on firm perceptions offers a number of advantages over existing studies.
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Product: Research Papers
Author(s): Joyce Sadka , David S. Kaplan
Year: 2008
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The authors analyze lawsuits involving publicly-appointed lawyers in a labor court in Mexico to study how a rigid law is enforced. They show that, even after a judge has awarded something to a worker alleging unjust dismissal, the award goes uncollected 56 percent of the time.
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Product: Research Papers
Author(s): Antara Dutta , Siddharth Sharma
Year: 2008
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There have been large increases in R&D spending after patent law reforms in India, suggesting that intellectual property rights matter to innovation in developing countries. India, along with several other developing countries, signed the Trade Related Aspects of Intellectual Property (TRIPs) Agreement in 1994, and became obligated to amend its domestic intellectual property rights laws within ten years.
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Product: Research Papers
Author(s): Mohammad Amin , Priya Ranjan
Year: 2008
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This paper takes another look at the extent of business regulation in civil law versus common law countries. In contrast to existing studies that find a heavier role of government regulation in the civil law countries, we show that this holds only for a subset of civil and common law countries that have well developed political institutions but not otherwise.
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Product: Research Papers
Author(s): Saugato Datta
Year: 2008
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India's Golden Quadrilateral Program aimed at improving the quality and width of existing highways connecting the four largest cities in India. This affected the quality of highways available to firms in cities that lie along the routes of the four upgraded highways, while leaving the quality of highways available to firms in other cities unaffected.
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Product: Research Papers
Author(s): David S. Kaplan
Year: 2008
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This paper studies the effects of labor-regulation reform using data for 10,396 firms from 14 Latin American countries. Firms are asked both how many permanent workers they would have hired and how many they would have terminated if labor regulations were made more flexible. I find that making labor regulations more flexible would lead to an average net increase of 2.08 percent in total employment.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2008
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A large literature shows that the legal tradition of a country is highly correlated with various dimensions of institutional quality. Broadly, studies show that English common law countries perform better than the French civil law countries with respect to the regulatory burden on firms, efficiency of courts and contract enforcement, corruption, and overall governance.
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Product: Research Papers
Author(s): Mohammad Amin , Jamal Ibrahim Haidar
Year: 2008
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There is a large literature that finds that common law countries perform better than civil law countries in various aspects of the institutional environment.
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Product: Research Papers
Author(s): Eduardo Piedra , Pedro Miranda , Siddharth Sharma , Simeon Djankov
Year: 2008
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We use nationally representative survey data from Mexico to compare households with savings accounts in formal financial institutions to their neighbors who do not have such accounts. The survey was conducted in 2005 and contains information on nearly 5000 households.
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Product: Research Papers
Author(s): Rita Ramalho , Simeon Djankov
Year: 2008
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We survey the research on the effect of employment laws in developing countries, using papers published since 2004. The survey is further supported by cross-country correlation analyses. Both exercises show that developing countries with rigid employment laws tend to have larger informal sectors and higher unemployment, especially among young workers.
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Product: Research Papers
Author(s): Siddharth Sharma
Year: 2008
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It shows that there are large regional differences in returns to factory investment, implying poor spatial capital mobility within India, which calls for financial markets reform.
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Product: Research Papers
Author(s): Alvaro González , Elio E. Valladares , J Ernesto López-Córdova
Year: 2007
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The authors measure the extent to which firms in developing countries are the target of bribes. Using new firm-level survey data from 33 African and Latin American countries, the analysis shows that perceptions adjust slowly to firms’ experience with corrupt officials and hence are an imperfect proxy for the true incidence of graft.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2007
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A new dataset of 1,948 retail stores in India compiled by the World Bank's Enterprise Surveys shows that 27 percent of the stores report labor regulations as a problem for their business. Using these data we analyze the effect of labor regulation on employment at the store level.
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Product: Research Papers
Author(s): Enrique Seira , David S. Kaplan , Eduardo Piedra
Year: 2007
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The authors estimate the effect on business start-ups of a program that significantly speeds up firm registration procedures. The program was implemented in Mexico in different municipalities at different dates.
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Product: Research Papers
Author(s): Rita Ramalho
Year: 2007
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Corruption imposes substantial economic costs, yet there is little evidence on the success of anti-corruption campaigns. The author studied the 1992 impeachment of president Collor in Brazil to evaluate its impact on politically connected companies both in the short- and long-term. Using an event study methodology, the short-run effect is established: family-connected firms on average lose 2 to 9 percentage points of their value on dates when information damaging to the impeached president is released. However, this decline is reversed entirely within one year. The author concludes that the impeachment had limited success in reducing corruption in Brazil.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2007
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The paper analyzes the effect of product market competition on the average productivity of labor in India’s retail sector. The authors use a new dataset of 1,948 retail stores located in 41 cities of India compiled by the World Bank’s Enterprise surveys. According to the survey, 62% of the stores do not face any significant competition.
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Product: Research Papers
Author(s): Danielken Molina , J Ernesto López-Córdova
Year: 2007
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In this paper we estimate the elasticity of substitution of US imports using detailed trade data over the 1990-2003 period. We use a two-stage least squares framework in order to identify the elasticity parameter of interest. Our elasticity estimates for aggregate imports are in line with those of other recent studies.
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Product: Research Papers
Author(s): Asli Demirgüç-Kunt , Christopher Woodruff , J Ernesto López-Córdova , María Soledad Martinez Pería
Year: 2007
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Despite the rising volume of remittances flowing to developing countries, their impact on the development of banking services in recipient countries has been largely unexplored. We examine this topic using county-level data for Mexico on the fraction of households that receive remittances and measures of both banking breadth (e.g., branches or accounts per capita) and depth (e.g., deposits or credit to GDP).
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Product: Research Papers
Author(s): David S. Kaplan , Jorge Luis , Joyce Sadka , Silva-Mendez
Year: 2007
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Using a newly assembled data set on procedures filed in Mexican labor tribunals, the authors of this paper study the determinants of final awards to workers. On average, workers recover less than 30 percent of their claim. The strongest result is that workers receive higher percentages of their claims in settlements than in trial judgments.
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Product: Research Papers
Author(s): David S. Kaplan , Gabriel Martínez González , Raymond Robertson
Year: 2007
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Using a census of all workers in private establishments in the formal sector in Mexico to track workers and establishments over time, this paper presents the first Mexican worker and job flow statistics. The data allow for comparing these flows across time, space, and worker characteristics.
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Product: Research Papers
Author(s): Joshua Wimpey , Mehnaz Safavian
Year: 2007
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The authors tested the hypothesis that enterprises may forgo formal finance in lieu of informal credit by choice. They do so to avoid the additional regulatory scrutiny and harassment that engaging with the formal financial sector invites. The hypothesis is tested using enterprise level data on 3564 enterprises in 29 countries.
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Product: Research Papers
Author(s): Mehnaz Safavian , Siddharth Sharma
Year: 2007
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Creditor-friendly laws are generally associated with more credit to the private sector and deeper financial markets. But laws mean little if they are not upheld in the courts. The authors hypothesize that the effectiveness of creditor rights is strongly linked to the efficiency of contract enforcement. This hypothesis is tested using firm-level data on 27 European countries in 2002 and 2005.
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Product: Research Papers
Author(s): Alvaro González , Francesca Lamanna
Year: 2007
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This paper investigates who is most affected by informal competition and how regulation and enforcement affect the extent and nature of this competition. Using newly-collected enterprise data for 6,466 manufacturing formal firms across 14 countries in Latin America, the authors show that formal firms affected by head-to-head competition with informal firms largely resemble them.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2007
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A recent survey of 1,948 retail stores in India conducted by the World Bank’s Enterprise Surveys shows that 19 percent of the stores use computers for their business. In some states like Kerala, computer usage is as high as 40 percent. Using this data we find labor regulation as an important determinant of computer usage.
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2007
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Between 1991 and 2001, the number of adult non-workers per household showed a secular decline in most parts of India. The decline was as sharp as 18.6 percent in the state of Haryana, 12.7 percent in Kerala and 12.6 percent in Punjab. The paper estimates the likely effect of these changes on market competition using micro data on retail stores in India.
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Product: Research Papers
Author(s): Ekaterina Zhuravskaya , Gerard Roland , Simeon Djankov , Yingyi Qian
Year: 2006
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We compare results from a pilot study on entrepreneurship in China and Russia. Compared to non-entrepreneurs, Russian and Chinese entrepreneurs have more entrepreneurs in their family and among childhood friends, value work more relative to leisure and have higher wealth ambitions.
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Product: Research Papers
Author(s): Caralee McLiesh , Rita Ramalho , Simeon Djankov
Year: 2006
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Using objective measures of business regulations in 135 countries, we establish that countries with better regulations grow faster. Improving from the worst quartile of business regulations o the best implies a 2.3 percentage point increase in annual growth
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Product: Research Papers
Author(s): Ekaterina Zhuravskaya , Gerard Roland , Simeon Djankov , Yingyi Qian
Year: 2006
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This research finds that controlling for institutional environment entrepreneurs in China are much more likely to have family members who are entrepreneurs as well as childhood friends who became entrepreneurs, suggesting that social environment plays an important role in entrepreneurship. Entrepreneurs also differ strongly from non-entrepreneurs in their attitudes toward risks and their work-leisure preferences.
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Product: Research Papers
Author(s): David C. Francis , Robert Kubinec
Year: 2022
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This paper considers the political influence of private firms. While such influence is frequently discussed, there is limited analysis of how firms combine political interactions, and under what conditions, to gain influence. The exception is the large literature on firms with political connections, with findings generally showing large gains to firms with those direct relationships. This paper extends the discussion of influence beyond political connections alone and uses a rich firm-level data set from 41 economies, which includes information on several interactions with political actors. Using a Bayesian item response theory (IRT) measurement model, an index of Political Influence is estimated, with the prior assumption that political connections yield more influence. Membership in a business association is found to enhance influence, while such influence is offset by bribes, state ownership, firm size, and a reliance on collective lobbying. Political Influence is found to be broadly higher in economies with poorer governance but more dispersed in those with better governance. Within economies, higher influence is associated with a higher likelihood of reporting a small number of competitors, higher sales, and lower labor inputs relative to sales. These findings are robust across several models that incorporate high-dimensional fixed effects, incorporating measurement error in the index, and varying these relationships over several governance measures.
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Product: Research Papers
Author(s): Benjamin Steinberg Williams , Jesica Torres Coronado , David C. Francis
Year: 2025
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This paper estimates the monetary and full returns to micro-entrepreneurship using a cross-section of Mexican women leveraging self-reported reservation wages. A generalized Roy model of micro-entrepreneurship choice that accounts for selection bias and non-response in earnings is estimated. The analysis exploits variation in homicide rates as an exclusion restriction to identify the average treatment-on-the-treated. The average monetary return is 4.2 percent while the average full return is 68 percent, which points to substantial non-pecuniary benefits from entrepreneurship among women. The monetary return sharply increases with years of schooling. Full returns are less steep, suggesting that non-pecuniary benefits are more salient for less educated women.
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Product: Research Papers
Author(s): Robert Cull , Vivien Foster , Dean Jolliffe , Daniel Lederman , Davide Salvatore Mare , Malarvizhi Veerappan
Year: 2023
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Treating data collected pre- and post-COVID-19 as a quasi-experiment, this paper examines the importance of presumed enablers and safeguards in driving the observed expansion of digital payments and digital financial inclusion. The analysis interacts drivers of digital payment usage with a country-specific proxy of the severity of the COVID-19 shock, leveraging variation in both the drivers and the quasi-treatment (the COVID-19 shock) to identify the parameters. Although regulation of banks and digital economic activity were correlated with digital payments before and during the pandemic, the capabilities of users and connectivity (to electricity, the internet, and mobile telephony) were responsible for increased use of digital financial services in response to the shock. An interpretation is that governments and the private sector were able to overcome underdeveloped banking systems and weak regulation of the digital economy, but only where there was adequate digital infrastructure, connectivity, and a high share of the population that understood and could make use of digital payments.
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Product: Enterprise Notes
Author(s): David C. Francis , Filip Jolevski
Year: 2024
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This brief is the first in a series of several companion pieces that assess the state of the business environment in 27 European Union (EU27) countries. This series makes use of a fully comparable data source—the World Bank Enterprise Surveys—that measures firms’ experiences with and opinions on a variety of obstacles, constraints, enabling policies, and other aspects that comprise the business environment. This brief opens the series by presenting the data and topics that will be explored more in depth by subsequent Briefs. To guide this process, in particular, an assessment is given of firms’ expression of their top obstacles. Two such obstacles stand out, overwhelmingly. In 99 of 186 NUTS2-level groupings, an ‘inadequately educated workforce’ is cited most frequently as the top obstacle, while in 51 such regions ‘tax rates’ is the most often-cited top obstacle. As it turns out, the regions that cite these different obstacles more frequently vary in notable ways: those citing the workforce-related obstacle are much more likely to be higher-income and have more technologically advanced sectoral profiles. The regions citing tax rates as a top obstacle, by contrast, tend to be lower income and contain lower-technology sectors; they also tend to be located in the periphery of the EU27. Yet while these commonalities across sub-national regions are important, country-level aspects remain important: most regions are more similar to other regions in their country, as opposed to regions with similar characteristics but located elsewhere.
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Product: Research Papers
Author(s): Mohammad Amin , Asif M. Islam
Year: 2023
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The relationship between paid maternity leave and the share of female workers in registered private firms is analyzed using firm-level survey data for 111 developing and emerging countries. Theoretically, the relationship can be either positive or negative. Higher maternity leave raises the cost of female workers to the employer, discouraging female employment. However, higher maternity leave encourages more females to enter the labor market, implying greater female employment. The results show that the latter effect dominates. That is, a positive, large, and statistically significant relationship is found between maternity leave and female employment. A conservative baseline estimate is that the share of female workers in a firm increases by 2.08 percentage points for each log point increase in the number of days of paid maternity leave. Alternatively, an increase in the number of days of paid maternity leave from its smallest to highest value (0 to 410 days) increases the share of female workers by 12.5 percentage points. The positive relationship between female workers and maternity leave is much larger when maternity leave is fully funded by the government than when paid for by the employer, and in countries where there is a higher share of females in the childbearing age group of 20–29 years. These heterogeneities highlight channels that accentuate the relationship, thereby serving as checks against endogeneity concerns with the estimation. The distributional implications of paid maternity leave are also analyzed by estimating its impact on low-skilled versus high-skilled employment. Important policy implications of the findings are discussed.
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Product: Enterprise Notes
Author(s): Federica Saliola , Murat Seker
Year: 2011
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Total factor productivity (TFP) is a crucial measure of efficiency and thus an important indicator for policymakers. Using micro level data from manufacturing industries in 80 developing countries, this note analyzes TFP performance at the firm-level. Among the countries surveyed during the same period across multiple regions—Eastern Europe and Central Asia, Latin America, Africa, and Asia—Hungary, Peru, Ethiopia and Indonesia have the highest aggregate productivities. A comparison of average productivities in each region shows that Moldova, Nicaragua, Ethiopia and Indonesia have the highest values among the countries surveyed. This note also discusses separate estimates of TFP values obtained at the industry level. These industry-level estimates are the most useful for policymakers in that they reveal comparative advantages of specific industries within countries. In the garments and chemicals industries, Brazil has the highest average productivity among all the countries surveyed.
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Product: Research Papers
Author(s): Mohammad Amin , Yew Chong Soh
Year: 2020
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Payments of bribes and the expenses incurred on rent-seeking activities impose a significant financial burden on private firms, which is compounded when they do not have enough funds of their own or find it costly to borrow externally. This paper hypothesizes that financial constraints magnify the harmful effects of corruption. It applies this idea to the impact of corruption on employment growth among private firms. Using firm-level survey data for 109 countries, the analysis finds that corruption has a much larger negative impact on employment growth for firms that are financially constrained compared with firms that are not financially constrained. For the baseline specification, a one standard deviation increase in the bribery rate brings about a decline in the annual growth rate of employment of financially constrained firms that is 2.3 percent greater than that for firms that are not financially constrained. This is a large difference given that the mean employment growth is about 5.1 percent. The results show that corruption “sands the wheels” at high levels of financial constraint and “greases the wheels” of an otherwise slow bureaucracy at low levels of financial constraint.
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Product: Research Papers
Author(s): Erica Bosio , Simeon Djankov , Filip Jolevski , Rita Ramalho
Year: 2020
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This paper estimates the survival time of nearly 7,000 firms in a dozen high-income and middle-income countries in a scenario of extreme economic distress, using the World Bank’s Enterprises Surveys. Under the assumption that firms have no incoming revenues and cover only fixed costs, the median survival time across industries ranges within 8 to 19 weeks, while on average firms have liquidity to survive between 12 and 38 weeks. Schumpeter’s theory of creative destruction is not corroborated in the data, as potential exit is not predicated on the size of firms, their age, or their productivity
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Product: Research Papers
Author(s): Gemechu Aga , HIbret Maemir
Year: 2021
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Drawing on a representative survey of firms in 38 countries, eight of which are in Sub-Saharan Africa, this paper documents the impact of COVID-19 and firms’ coping strategies in Sub-Saharan Africa, benchmarking with other regions. The paper shows that the impact of the pandemic is more pronounced in Sub-Saharan Africa compared with other regions. This disproportionate impact is not explained by differences in sectoral composition and other firm characteristics, but likely by the level of development. This underscores the important economic and structural contexts that predate the pandemic in understanding the differential impact. Contrary to expectations, the findings show that businesses in Sub-Saharan Africa are more likely to adjust their operations or products and services to adapt to the shock than those in other regions. However, firms in the region lag in leveraging digital technologies, remote working, and e-commerce, compared with those in other regions
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Product: Research Papers
Author(s): David C. Francis , Nona Karalashvili , Hibret Maemir , Jorge Rodriguez Meza
Year: 2020
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Total factor productivity is a key element of economic growth and an important performance metric for policy makers. This note describes the methodology for measuring firm-level total factor productivity using the World Bank’s Enterprise Surveys cross-country data. It also presents some estimates recovered from the production function. Two versions of the production function are estimated: one Cobb-Douglas, the other a more flexible translog specification. Both estimations are at the two-digit industry level pooling all the Enterprise Surveys data across economies. Evidence is found against using a Cobb-Douglas specification, which is more parsimonious, and in favor of using the flexible translog specification. The resulting firm-level estimates are all published in the Enterprise Surveys database with a unique firm identifier to link to the rest of the Enterprise Surveys data; because the estimates are reliant on new data, they are updated periodically as new Enterprise Surveys data become available. The results show that: (i) median firms operate close to constant returns to scale; (ii) gross-output and value-added production functions provide similar ranking of sectors in terms of output elasticities, capital intensity, and returns to scale; (iii) there is large, firm-level heterogeneity in output elasticities; and (iv) gross-output-based total factor productivity measures are less dispersed than the value-added ones.
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Product: Research Papers
Author(s): Silvia Muzi , Filip Jolevski , Kohei Ueda , Domenico Viganola
Year: 2021
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This paper examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian “cleansing” of less productive firms. Using firm-level data for 31 economies, the study finds that less productive firms have a higher probability of permanently closing during the crisis, suggesting that the process of cleansing out unproductive arrangements may be at work. The paper also uncovers a strong and negative relationship between firm exit and innovation and digital presence, especially for small firms, confirming the relevance of the ability to adapt to market conditions as a determinant of firm survival. Finally, the study finds evidence of a negative relationship between firm exit and a burdensome business environment, as well as between firm exit and age.
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Product: Research Papers
Author(s): Mohammad Amin , Asif M. Islam
Year: 2021
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Theory suggests several ways in which exporting may benefit women’s employment. However, the empirical evidence is mixed and limited, especially for developing countries. This paper uses firm-level survey data for 91 developing countries to estimate the relationship between exporting and the share of women workers at the firm. The analysis pays close attention to endogeneity concerns. First, it proxies a given firms’ exports by the average exports of all other firms in the same country-year-industry cell. Second, it exploits the repeated cross-section nature of the data and analyzes how changes over time in exporting activity are associated with changes in the share of women workers. The strategy is more immune to endogeneity problems than pure cross-section regressions. Third, it tests several mechanism or mediating factors as predicted by the theory through which exporting impacts women’s employment prospects. The predictions are confirmed in the data, an unlikely scenario if exports were a mere proxy for other correlated drivers of women’s employment. The results show a large, positive impact of higher exports on the share of women workers. A conservative estimate is that for each percentage point increase in the ratio of exports to total sales, the share of women workers increases by 0.16 percentage point. Consistent with the theoretical predictions, this positive relationship is much larger (more positive) in industries that rely more on women workers, in country-industry pairs where competitive pressure is largely from international markets in comparison to less competitive domestic markets, when social attitudes and labor laws are more favorable toward women’s work, and when the law and order situation is more business friendly
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Product: Research Papers
Author(s): Mohammad Amin , Domenico Viganola
Year: 2021
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The advent of the novel coronavirus (COVID-19) pandemic has led to a severe liquidity crunch among private firms. Yet, formal analysis of the impact of a liquidity crunch or access to finance on the performance of firms during the pandemic is limited. The present paper estimates the impact of access to finance in the period before the pandemic on the likelihood of a decline in sales of the firm during the pandemic. The results show a strong connection between the two. That is, firms with better access to finance are significantly less likely to experience a decline in sales, and this relationship is highly heterogenous. First, better access to finance reduces the likelihood of a decline in sales much more for firms that have a stronger long-standing relationship with important stakeholders such as skilled workers and input suppliers. These are firms that use more skilled relative to unskilled workers, firms in industries with a more complex network of input suppliers, and firms in countries where the cost of enforcing contracts with new input suppliers is high. Second, the impact of access to finance is less among firms that use more women relative to men workers. This is especially so in countries or societies that accord a higher value to women’s caregiving role than to their work outside the home. The paper argues that both of these heterogeneities are along expected lines and derive from the specific ways in which access to finance benefits firms in fighting the pandemic. Thus, they help to raise confidence against endogeneity concerns about the main results.
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Product: Research Papers
Author(s): Mohammad Amin , Victor Motta
Year: 2021
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The present paper estimates the impact of bureaucratic corruption on access to finance of small and medium-size enterprises in 114 developing countries. Corruption can hurt small and medium-size enterprises’ access to finance by lowering profits, increasing credit demand, increasing bankruptcy chances, creating uncertainty about the firm’s future profit, and exacerbating the asymmetric information problem between borrowers and lenders. Consistent with this view, the findings show a large adverse effect of higher corruption on small and medium-size enterprises’ access to finance. An increase in corruption from its smallest to highest value increases the likelihood of small and medium-size enterprises being financially constrained from 6.9 to 10.9 percentage points. The analysis uncovers several heterogeneities in the corruption-finance relationship. For instance, the adverse effect of corruption on access to finance is much less in countries where financial institutions protect the rights of borrowers and lenders are stronger, laws provide for better credit information, and credit bureaus exist. The paper argues that these heterogeneities derive from the specific ways in which corruption impacts access to finance. Thus, they help to raise confidence against endogeneity concerns about the main results. Other heterogeneities uncovered suggest that corruption is more harmful to firms more that, absent corruption, are known to enjoy better access to finance, such as male versus female owned firms, relatively large firms, and better performing firms. The results have important policy implications for the growth of small and medium-size enterprises in the developing world
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Product: Research Papers
Author(s): Mohammad Amin
Year: 2021
File Size:
The informal sector is an important source of livelihoods and jobs for a vast majority of people in developing countries. However, there is concern that it may undermine growth and development of the formal sector. For instance, the growth literature indicates that research and development activity and innovation are a key driver of long-term growth. How does the competition that formal sector firms face from informal sector firms affect research and development activity by the formal firms? The present paper attempts to answer this question using firm-level survey data for small and medium-size enterprises in a large cross-section of mostly developing countries. The results show that higher informal competition leads to greater a likelihood of spending on research and development by formal firms. For the most conservative baseline specification, a one standard deviation increase in informal competition leads to an increase of 5.2 percentage points in the likelihood of spending on research and development by formal firms. This is a large increase given that less than 18 percent of the firms in the sample engage in research and development activity. Further, consistent with the “parasite” view of informality, the positive impact of informal competition on research and development activity is magnified when the business environment is less conducive to operating in the formal sector compared with informal sector due to factors such as higher corruption, weaker rule of law, more burdensome business regulations, and a higher tax rate on profits. As expected, there is no impact of informal competition on research and development activity among large firms. The main findings are robust to several controls, alternative specifications, and endogeneity checks.
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Product: Research Papers
Author(s): Gemechu Aga , David Francis , Filip Jolevski , Jorge Rodriguez Meza , Joshua Seth Wimpey
Year: 2022
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Informal business activity is ubiquitous around the world, but it is nearly always uncaptured by administrative data, registries, or commercial sources. For this reason, there are rarely adequate sampling frames available for survey implementers wishing to measure the activity and characteristics of the sector. This paper presents a methodology to generate a representative sample of informal businesses using an adaptive, geographically based method called Adaptive Cluster Sampling. Developed for populations that are clustered and/or rare, this method helps with efficiently sampling Primary Sampling Units—blocks—that are fully enumerated, and from which Secondary Sampling Units—businesses—can be randomly sampled to conduct interviews. The paper shows how this methodology can be applied to surveying informal businesses, often reducing both the average variance of population estimates and fieldwork effort. Practical considerations and guidance for implementation and analysis are also provided.
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Product: Research Papers
Author(s): Davide S. Mare , Martin Melecky , Hanna Murina
Year: 2023
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Implicit government guarantees to bail out troubled banks can produce a sizable fiscal contingent liability. Drawing on a rich history of various forms of staggered bailouts, this paper studies the link between bank bailouts and fiscal contingent liabilities using bank-level data for Kazakhstan—an upper-middle-income country in Central Asia. The paper first estimates the probability that a bank in distress is bailed out, conditioning on bank characteristics and financial soundness. Second, it estimates the magnitude of bailout costs depending on the size of banks, their ownership type, financial soundness, and the type of bailout instrument used by the government. The latter aims to contrast the fiscal contingent liabilities when the government uses bailout instruments without recourse on bank future profits—such as government purchases of bad loans at 100 percent nominal value—versus instruments that do not allow bank owners to socialize losses and privatize gains— such as properly governed and priced senior debt or equity injections. Third, the paper illustrates how the estimations could be used for projecting the expected contingent liabilities from bank bailouts.
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Product:
Author(s): Mohammad Amin
Year: 2021
File Size:
The informal sector is an important source of livelihoods and jobs for a vast majority of people in developing countries. However, there is concern that the informal sector may undermine job creation in the formal sector. According to the “parasite” view of informality, informal firms can compete against formal firms, and often “unfairly” so as they do not have to comply with costly regulations and pay taxes. This “unfair” advantage makes it difficult for formal firms to compete against informal firms, implying a significant loss of formal sector jobs. Using firm-level survey data for manufacturing small and medium-size enterprises in 109 mostly developing countries, this study estimates the impact of competition from informal firms on the growth rate of employment among formal sector small and medium-size enterprises. The results show that the growth rate of employment declines significantly as competition from informal firms rises. According to the baseline specification, for each one standard deviation increase in informal competition, the employment growth rate declines by 1 percentage point. Consistent with the parasite view of informality, the negative impact on job growth is much larger when the business environment is less conducive to operating formally versus informally due to factors such high corruption, weak rule of law, more burdensome regulations, and high profit tax rate. Several checks are provided against endogeneity concerns.
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Product: Research Papers
Author(s): Mohammad Amin , Norma Gomez
Year: 2024
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Women often face more hurdles than men in obtaining finance. This is especially so when credit supply is limited and financial markets are less developed. As a result, owners of firms may prefer men over women as top managers of their firms, widening the gender gap in top manager positions. This paper tests this idea using firm-level survey data for small and medium-size formal manufacturing enterprises in 47 developing countries. The results confirm a positive relationship between credit supply and the likelihood of having a woman versus a man as the top manager. This positive relationship is much stronger in industries that are more dependent on external sources of finance for technological reasons. It is also stronger in countries with poor coverage by credit bureaus and low competition between banks, which is consistent with statistical and taste-based discrimination against women borrowers. The main result is robust to several endogeneity checks, sample alterations, and alternative measures of credit supply and financial development.
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Product: Research Papers
Author(s): Amin Mohammad , Nesma Ali
Year: 2024
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It is often argued that small firms are more flexible than large firms. As a result, small firms perform better in volatile markets compared to large firms. The present paper explores this idea for a representative sample of private hotels in Malaysia. Specifically, the paper estimates the impact of volatility in occupancy rates on the pure technical efficiency of small versus large hotels. A slack-based non-radial efficiency measure obtained from the data envelopment analysis methodology is used. The empirical results confirm that smaller hotels are better at dealing with volatility than large hotels are. That is, there is a positive and significant impact of higher volatility on the efficiency of relatively small hotels, a negative and significant impact on the efficiency of larger hotels, and no significant impact on the efficiency of the average hotel. Higher women’s ownership also helps hotels to deal with volatility. The paper discusses the policy implications of the findings.
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Product: Research Papers
Author(s): Mohammad Amin , Caroline Gomes Nogueira
Year: 2025
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This study investigates the impact of competition from informal or unregistered firms on the likelihood of formal manufacturing small and medium-size enterprises obtaining internationally recognized quality certificates. The sample includes 16 countries in Latin America and the Caribbean, one of the regions with the highest levels of informality in the world. The study uncovers a positive impact, with a one standard deviation increase in informal competition leading to an increase in the probability of having a quality certificate by 2.9 to 3.6 percentage points across the different specifications. This effect is large, given that only 10.4 percent of small and medium-size enterprises have a quality certificate. These findings are consistent with the “legalist” model of informality, whereby the positive impact of informal competition on the likelihood of having a quality certificate is significantly larger in countries where the business environment is less favorable to operating in the formal versus informal sector due to factors such as the weaker rule of law and greater regulatory burden on formal firms. The paper provides several layers of checks against omitted variable bias, reverse causality, and measurement errors. The findings also show that, as expected, there is no statistically significant impact of informal competition on the likelihood of having a quality certificate among large manufacturing firms.
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Product: Enterprise Notes
Author(s): David C. Francis
Year: 2025
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This Brief studies patterns of political engagement among private firms in the European Union (EU). Using representative data, allowing for analysis at the level of NUTS2 regional groupings (EU regions varying from about 800,000 to 3 million inhabitants), various patterns of engagement emerge. In particular, business association membership is widespread, and its variation seems to be largely explained by cross-country patterns. Such differences may be due to differing legal regimes that do or do not mandate membership in business organizations; generally, firms tend to value the services provided by such organizations less when membership is mandatory. Firms may also turn to other forms of political engagement, such as the maintenance of political connections. Overall, patterns of political engagement seeking influence vary widely, including within countries, often along identifiable institutional lines. An estimated Political Influence score is used to measure this activity. Though this score varies, analysis suggests that firms with higher scores show higher measures of firm performance, especially relative to their peer/competitor firms. There is evidence of political competition, where higher influence begets similar activity among peer firms.
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Author(s): M. Nazim Tamkoc
Year: 2025
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This Brief studies the establishment size distribution in the European Union countries. A well-established literature has established that an abundance of small establishments among lower-income countries is evidence of the misallocation of inputs. To investigate this phenomenon, this Brief analyzes both the mean size (in terms of employment) and the employment share of the top 10 percent of establishments within an economy, across European Union countries and regions at the NUTS1 and NUT2 levels. Results show that higher-income countries have larger establishments on average and a higher concentration of employment in the top 10 percent of establishments than lower-income countries. These findings hold when looking at both the NUTS1 and NUTS2 regional levels. Moreover, establishment size increases with the age of the establishment and the level of foreign ownership and exports. Finally, a comparison of overall establishment size distribution reveals that lower-income countries have a higher prevalence of smaller establishments and fewer larger establishments than higher-income countries, which confirms the predictions of the misallocation literature.
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Product: Enterprise Notes
Author(s): Domenico Viganola , Mamadou Yaya Diallo
Year: 2025
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This Brief uses data from the World Bank Enterprise Surveys (WBES) in 27 European Union countries (the EU-27) to gain insights into the adoption of management practices in the region's private sector. A recent, abundant literature studies the connections between firm-level productivity and the strategies owners and managers implement to achieve their organizational and financial goals. These strategies can be summarized by a consolidated index comprising three main categories: monitoring, target setting, and creating incentives. This Brief first analyzes the distribution of the management practices index across EU countries, identifying substantial dispersion within and across countries. Then, the Brief investigates firm-level characteristics associated with the index. Larger firm size, top management external to the family owning the firm, and higher education of the top manager emerge as the most important factors. Finally, the Brief provides evidence of the positive and robust correlation between productivity and the management practices index.
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Product: Enterprise Notes
Author(s): Murat Seker
Year: 2010
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I n the Eastern Europe and Central Asia (ECA) region, countries show great variations in their levels of openness and how intensively they trade. There is a strong and positive correlation in export and import market participation rates and a similar relationship between how intensively firms trade in each market. Using a firm-level data set, this note shows that the difference in export intensity between large and small firms is almost 30 percentage points; however, this difference is not seen among all countries. A comparison of industries shows that the garment industry is the most export and import intensive industry in the region. The note then focuses on customs efficiencies and finds that countries with inefficient customs services export and import less intensively. Finally, this note analyzes how trade has evolved since 2005. The percentage of importers and import intensities have increased among the member countries in the European Union (EU); these statistics exclude the trade of EU countries with each other. In the region overall, import intensity has increased by 10 percentage points; on the other hand, there has not been a significant change in export intensity.
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Product: Research Papers
Author(s): David C. Francis , Nona Karalashvili , Peter Murrell
Year: 2022
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To what extent are personal trust, mutual interests, and third parties important in enforcing agreements to trade? How do firms combine these to form transactional governance structures? This paper answers these questions in a whole-economy, cross-country setting that considers a full spectrum of transactional-governance strategies. The data collection requires a new survey question answerable in any context. The question is applied in six South American countries using representative samples, with the resultant survey weights facilitating a whole-economy analysis. Without imposing an a priori model, latent class analysis estimates meaningful governance structures. Bilateralism is always used. Law is never used alone. Bilateralism and formal institutions are rarely substitutes. Within country, inter-regional variation in governance is greater than inter-country variation. The usefulness of the data is shown by testing one element of Williamson’s discriminating-alignment agenda: greater uncertainty in the transactional environment increases the involvement of third parties.
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Product: Enterprise Notes
Author(s): Mohammad Amin
Year: 2025
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This Brief highlights issues related to the education and skill level of workers and top managers in firms in 27 European Union countries (the EU-27), using the World Bank Enterprise Surveys (WBES). The exercise is an important step toward understanding the use of skilled and adequately educated workers and top managers by a firm and its likely effects. The Brief identifies several factors at the NUTS2 region level and firm level that are correlated with the difficulty firms face in obtaining adequately educated workers as well as the skill level and education level of the workers and top managers. Somewhat surprisingly, income per inhabitant in the NUTS2 regions is not a strong predictor of the use of skilled and educated workers and top managers or firms’ reported difficulty in finding adequately educated workers. Several firm performance measures, such as labor productivity, employment growth, exporting, research and development (R&D), and management quality, are found to be correlated with the use of skilled and educated workers and top managers. Some of these correlations differ sharply between low and high levels of the outcome variables. There is evidence that training provided to workers by the firms is associated with less dispersion of labor productivity between firms, and greater use of skilled workers is associated with less dispersion of wage rates across firms. Overall, the Brief finds that starting at low-income levels in EU regions, policy focus needs to shift more toward ensuring the availability of adequately educated workers than on reducing other obstacles as the economy develops. This shifting of policy focus can stabilize after the economy is sufficiently developed.
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Product: Research Papers
Author(s): Marika Carboni , Marta Degl’Innocenti , Franco Fiordelisi , Davide Salvatore Mare
Year: 2025
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Using data from the World Bank Enterprise Surveys from 2006 to 2023, this paper studies the corporate ethical standards of technological digital oriented firms. The findings indicate that technology and digitalization positively impact the adoption of environmental and social standards. However, digital oriented technological firms show lower governance standards. These results are influenced by country culture, the burden of business regulation, and the perception of the courts as an obstacle to business activity. This underscores the importance of the broader society and the quality of the business environment in shaping how digital oriented technological firms adopt ethical standards.
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