03. Journals

2,963 items available

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http://hdl.handle.net/10986/2210

These are journal articles published in World Bank journals as well as externally by World Bank authors.

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Trade Liberalization and Investment : Firm-level Evidence from Mexico

(Oxford University Press on behalf of the World Bank, 2012-06-01) Kandilov, Ivan T. ; Leblebicioğlu, Aslı

Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods.
Does Fiscal Decentralization Result in a Better Business Climate?

(Taylor and Francis, 2012-04-30) Sobel, Russell S. ; Dutta, Nabamita ; Roy, Sanjukta

Previous literature generally finds that greater fiscal decentralization is associated with faster economic growth, improved government performance and stronger constraints on the Leviathan behaviour of governments. Because economic growth critically depends on the presence of good government policies and institutions, the likely but untested link between these strands of literature is that greater decentralization probably improves growth because it results in government policies more conducive to entrepreneurship and business success. We test (and confirm) this hypothesis using several business climate measures for the US states.
Is Economic Volatility Detrimental to Global Sustainability?

(Oxford University Press on behalf of the World Bank, 2012-01-18) Huang, Yongfu

In a dynamic panel data model allowing for error cross-section dependence, output volatility is found to impede sustainable development. Through a financial development channel (liquidity liability ratio), output volatility exerts a significant effect on depletion of natural resources, a key component of sustainability. Low-income countries, low energy-intensity countries, and low trade-share countries tend to be especially vulnerable to macroeconomic volatility and shocks. The findings highlight the interaction between global financial markets and the wider economy as a key factor influencing sustainable development, with important implications for macroeconomic and environmental policies in an integrated global green economy.
Resource Windfalls and Emerging Market Sovereign Bond Spreads : The Role of Political Institutions

(World Bank, 2012-01-18) Arezki, Rabah ; Brückner, Markus

We examine the effect that revenue windfalls from international commodity price booms have on sovereign bond spreads using panel data for 38 emerging market economies during the period 1997-2007. Our main finding is that commodity price booms lead to a significant reduction in the sovereign bond spread in democracies, but to a significant increase in the spread in autocracies. To explain our finding we show that, consistent with the political economy literature on the resource curse, revenue windfalls from international commodity price booms significantly increased real per capita GDP growth in democracies, while in autocracies GDP per capita growth decreased.
Empirical Evidence on Satisfaction with Privatization in Latin America

(World Bank, 2012-01-18) Bonnet, Céline ; Dubois, Pierre ; Martimort, David ; Straub, Stéphane

Since the 1980s, privatization of formerly state-owned firms has been extensively implemented by governments across Latin America. Despite the fact that most evaluations of the process fail to find significant adverse efficiency and welfare effects, there has been a strong surge in public discontent with such policy in the region. This paper performs a systematic empirical analysis of the determinants of such dissatisfaction, using survey data from Latinobarometro covering 17 countries over the period 1998-2008, complemented by country level data on macroeconomic, political, and institutional aspects as well as data on privatization. Dissatisfaction appears to respond to absolute and relative welfare effects, and we find a robust U-shaped effect in term of education and income levels, with individuals in the middle of such distributions being more critical with the outcome of privatizations.
What Constrains Africa’s Exports?

(World Bank, 2011-10-18) Freund, Caroline ; Rocha, Nadia

Africa's share of global exports has dropped by 50 percent over the last three decades. To stem this decline, aid for trade to the region has increased rapidly in recent years. Assistance can target improvements in three important components of trade facilitation: transit times, documentation, and ports and customs. Of these, transit delays have the most economically and statistically significant effect on exports. Specifically, a one day reduction in inland travel times leads to a 7 percent increase in exports, after controlling for the standard determinants of trade and potential endogeneity. Put another way, a one day reduction in inland travel times translates into a 2 percentage point decrease in all importing-country tariffs. By contrast, longer delays in the other areas have a far smaller impact on trade. Large transit delays are relatively more harmful because they are associated with high (within-country) variation, making delivery targets difficult to meet. Finally, the results imply that transit times are primarily about institutional features—such as border delays, road quality, fleet class and competition and security—and not geography.
Entrepreneurship and the Extensive Margin in Export Growth : A Microeconomic Accounting of Costa Rica’s Export Growth during 1997-2007

(World Bank, 2011-10-18) Lederman, Daniel ; Rodríguez-Clare, Andrés ; Yi Xu, Daniel

Successful exporting countries are often seen as successful economies. This paper studies the role of new exporting entrepreneurs – defined as firms that became exporters – in determining export growth in a fast growing and export oriented middle-income country i.e., Costa Rica during 1997-2007. It provides a detailed description of the contribution of export entrepreneurs in the short and long run, and comparing the observed patterns with an emerging literature on the role of the “extensive” margin in international trade. On a year-by-year basis, the rate of firm turnover into and out of exporting is high, but exit rates decline rapidly with age (i.e., the number of years the firm has been exporting). On average, about 30 percent of firms in each year tend to exit export activities, and a similar percentage of firms enter. The exiting and entering firms tend to be significantly smaller than incumbent firms in terms of export value (e.g., entrants export about 30 percent less on average than incumbent firms). These findings are consistent with existing evidence for other middle income Latin American countries. However, in the long run new product-firm combinations (i.e., product-firm combinations not present in 1997) account for almost 60 percent of the value of exports in 2007. Surviving new exporters actively adopted new products (for the firm, but not necessarily new for the country) and abandoned weaker existing products they start with, and their export growth rates were very high during a period (1999-2005) when those of incumbent exporting firms were actually negative.
The Impact of the Business Environment on Young Firm Financing

(World Bank, 2011-10-18) Chavis, Larry W. ; Klapper, Leora F. ; Love, Inessa

A unique dataset of over 70,000 firms, most of which are small, in over 100 countries, is utilized to systematically study the use of different financing sources for new and young firms. Consistent age-related patterns emerge. Across all countries younger firms rely less on bank financing and more on informal financing. There is a clear substitution effect: as firms mature, more firms switch out of informal finance toward bank finance, while the total proportion of firms using external finance remains relatively unchanged. Importantly, these relationships hold for firms of different sizes, firms in different sectors, and firms located in countries with different income levels and on different continents. Thus, these patterns of young firm financing show clear universal tendencies. Given that even small firms increasingly use formal bank financing over time, these results suggest that information asymmetry plays an important role in decreasing a young firm's ability to obtain bank finance.
Does a Picture Paint a Thousand Words? Evidence from a Microcredit Marketing Experiment

(World Bank, 2011-10-18) Giné, Xavier ; Mansuri, Ghazala ; Picón, Mario

Female entrepreneurship is low in many developing economies partly due to constraints on women's time and mobility, often reinforced by social norms. We analyze a marketing experiment designed to encourage female uptake of a new microcredit product. A brochure with two different covers was randomly distributed among male and female borrowing groups. One cover featured 5 businesses run by men while the other had identical businesses run by women. We find that both men and women respond to psychological cues. Men who are not themselves business owners, have lower measured ability and whose wives are less educated respond more negatively to the female brochure, as do women business owners with low autonomy within the household. Women with relatively high levels of autonomy shown the male brochure have a similar negative response, while there is no effect on female business owners with autonomy shown the female brochure. Overall, these results suggest that women's response to psychological cues, such as positive role models, may be mediated by their autonomy and that more disadvantaged women may require more intensive interventions.
Entrepreneurship and Development : The Role of Information Asymmetries

(World Bank, 2011-10-18) Klapper, Leora F. ; Love, Inessa

This article reviews the literature on the relationship between entrepreneurship and economic development and introduces four symposium articles. A common thread is that information asymmetries are important determinants of access to finance in young entrepreneurial firms. Policy recommendations are proposed that would increase the positive role of entrepreneurship in economic development.