C. Journal articles published externally
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These are journal articles by World Bank authors published externally.
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Publication
Empowering Cities: Good for Growth? Evidence from the People's Republic of China
(The MIT Press, 2018-03)This paper utilizes a countrywide process of county-to-city upgrading in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly promoted cities have an incentive to utilize their new administrative remit to maximize gross domestic product and employment, there should be improvements in economic outcomes. In fact, aggregate firm-level outcomes do not necessarily improve after county-to-city graduation. However, state-owned enterprises perform better after graduation, with increased access to credit through state-owned banks as a possible explanation. Importantly, newly promoted cities with high capacity generally produce better aggregate firm outcomes compared with newly promoted cities with low capacity. The conclusions are twofold. First, relaxing credit constraints for firms could lead to large increases in their operations and employment. Second, increasing local government's administrative remit is not enough to lead to better firm and economic outcomes; local capacity is of paramount importance. -
Publication
The Rise of the Middle Class and Economic Growth in ASEAN
(Elsevier, 2018-01-05)We present instrumental variables estimates of the relationship between the share of income accruing to the middle class and GDP per capita. The increase in GDP per capita that ASEAN economies experienced during 1970–2010 significantly contributed to a higher share of income accruing to the middle class in these countries. Econometric model estimates show that the impact of a rise of the middle class on economic growth depends on initial levels of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth for levels of ASEAN economies' GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to growth of GDP per capita in ASEAN. We show that investment is an important channel through which the income share of the middle class affects economic growth. -
Publication
Hayek, Local Information, and Commanding Heights: Decentralizing State-Owned Enterprises in China
(American Economic Association, 2017-08)Hayek (1945) argues that local information is key to understanding the efficiency of alternative economic systems and whether production should be centralized or decentralized. The Chinese experience of decentralizing SOEs confirms this insight: when the distance to the government is farther, the SOE is more likely to be decentralized, and this distance-decentralization link is more pronounced with higher communication costs and greater firm-performance heterogeneity. However, when the Chinese central government oversees SOEs in strategic industries, the distance-decentralization link is muted. We also consider alternative agency-cost-based explanations, and do not find much support. -
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Market Facilitation by Local Government and Firm Efficiency: Evidence from China
(Elsevier, 2017-02)We use data from a large survey of Chinese firms to investigate whether local government efforts to facilitate market development improve firm efficiency. Both government provision of information about products, markets, and innovation and government assistance in arranging loans are positively associated with firm efficiency, and those private firms with weak access to and knowledge of financial, input, and product markets benefit most from such assistance. These patterns are robust across multiple estimation approaches. Our examination of the determinants of local government facilitation also suggests that it gravitates toward promoting efficiency, though there are also indications that rent-seeking may play a role. Our evidence is consistent with the notion that government facilitation can help some firms overcome market failures in the early stages of a country's private sector development. Though causality is difficult to establish, we argue that changing fiscal dynamics that forced local governments to become increasingly self-reliant in generating revenue, and a government promotion system based on local economic performance, were key motivating factors for market facilitation by local government officials. -
Publication
Book Review of Managing Globalization in the Asian Century: Essays in Honour of Prema-Chandra Athukorala
(Taylor and Francis, 2017)Asia is a region of economic miracles, and this festschrift for the esteemed development economist Prema-Chandra Athukorala highlights a major driver of Asia’s success: globalization. Economic progress in Asia cannot be separated from globalization’s role in industrializing the region’s agrarian economies. Most countries in Asia have, to varying degrees, embraced globalization by opening up to foreign direct investment (to stimulate markets and to transfer know-how) and facilitating the growth of export-oriented industries. -
Publication
Understanding Health Workers' Job Preferences to Improve Rural Retention in Timor-Leste: Findings from a Discrete Choice Experiment
(PLoS, 2016-11-15)Timor-Leste built its health workforce up from extremely low levels after its war of independence, with the assistance of Cuban training, but faces challenges as the first cohorts of doctors will shortly be freed from their contracts with government. Retaining doctors, nurses and midwives in remote areas requires a good understanding of health worker preferences. The article reports on a discrete choice experiment (DCE) carried out amongst 441 health workers, including 173 doctors, 150 nurses and 118 midwives. Qualitative methods were conducted during the design phase. The attributes which emerged were wages, skills upgrading/specialisation, location, working conditions, transportation and housing. -
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The Role of Bank and Corporate Balance Sheets on Early Warning Systems of Currency Crises—An Empirical Study
(Taylor and Francis, 2016-06-30)This study analyzes the role of bank and corporate balance sheets on early warning systems (EWS) of currency crises. Using firm-level data on debt structure, leverage, liquidity, and profitability, this study presents estimations of EWS for a panel of emerging markets. Using calibration experiments, we assess the performance of alternative EWS specifications in a comprehensive range of crisis-probability cut-offs. These models supplement EWS based on traditional macroeconomic indicators, improving forecasting performance substantially. The results support the third-generation models of currency crises and can assist policymakers on the design of surveillance strategies tailored for heterogeneous levels of risk tolerance and country specificities. -
Publication
The Experience of Survival: Determinants of Export Survival in Lao PDR
(Elsevier, 2015-07-09)This paper explores monthly, firm-level customs records from Laos in the period 2005–10. We analyze the role of two important and related determinants of export survival, experience, and networks, which are particularly relevant for developing countries. We go beyond previous studies by disaggregating contract terminations to consider the possibility of upgrades to superior products. Having prior experience with the export product and destination and strong networks of similar firms has a strong positive impact on chances of simple export survival. The likelihood of upgrading is boosted by destination experience but lowered by familiarity with the product.