Finance, Competitiveness and Innovation Global Practice
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Innovation and Entrepreneurship
Finance, Competitiveness and Innovation Global Practice
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Last updated August 7, 2023
Xavier Cirera is a senior economist in the Finance, Competitiveness, and Innovation (FCI) Global Practice of the World Bank. His work focuses on innovation and entrepreneurship. He has led the evaluation of innovation policies, including through the development of public expenditure reviews in science, technology, and innovation implemented in Brazil, Colombia, Chile, Ukraine, and Vietnam. He is the coauthor of The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up and A Practitioner’s Guide to Innovation Policy: Instruments to Build Firm Capabilities and Accelerate Technological Catch-Up in Developing Countries. His most recent work focuses on the measurement and impact of technology adoption and diffusion. Before joining the World Bank, he served as a research fellow at the Institute of Development Studies at the University of Sussex. He holds a doctorate in economics from the University of Sussex.
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Now showing 1 - 7 of 7
Catching Up to the Technological Frontier?: Understanding Firm-level Innovation and Productivity in Kenya(World Bank Group, Washington, DC, 2015-03-06) Cirera, XavierKenya s economy has undergone a significant process of structural transformation over the last decade. Since 2002, the economy has shown an accelerating trend with GDP growth increasing steadily from below 1 percent in 2002 to 7 percent in 2007. After a slowdown in GDP growth to 1.5 percent and 2.7 percent in 2008 and 2009 respectively, economic growth started to rebound in 2010. Amidst this positive growth context, in October 2013, the Kenyan Government launched the Second Medium-Term Plan (MTP-2) of the Vision 2030. The aim of Kenya s Vision 2030 is to create a globally competitive and prosperous country with a high quality of life by 2030 and to shift the country s status to upper-middle income level.
Publication(World Bank, Washington, DC, 2020-11) Cirera, Xavier ; Comin, Diego ; Cruz, Marcio ; Lee, Kyung MinThis study collects data on the sophistication of technologies used at the business function level for a representative sample of firms in Vietnam, Senegal, and the Brazilian state of Ceara. The analysis finds a large variance in technology sophistication across the business functions of a firm. The within-firm variance in technology sophistication is greater than the variance in sophistication across firms, which in turn is greater than the variance in sophistication across regions or countries. The paper documents a stable cross-firm relationship between technology at the business function and firm levels, which it calls the technology curve. Significant heterogeneity is uncovered in the slopes of the technology curves across business functions, a finding that is consistent with non-homotheticities in firm-level technology aggregators. Firm productivity is positively associated with the within-firm variance and the average level of technology sophistication. Development accounting exercises show that cross-firm variation in technology accounts for one-third of cross-firm differences in productivity and one-fifth of the agricultural versus non-agricultural gap in cross-country differences in firm productivity.
Publication(World Bank, Washington, DC, 2021-05) Cirera, Xavier ; Comin, Diego ; Cruz, Marcio ; Lee, Kyung MinTechnology is key to boost productivity and generate more and better quality jobs in Senegal. This paper uses a novel approach to measure technology adoption at the firm level and applies it to a representative sample of firms in Senegal. It provides new measures of technology adoption at the firm level, which identify the purposes for which technologies are used and analyzes some of the key barriers to improving technology adoption at the firm level in Senegal. First, the adoption of general-purpose information and communications technologies, such as computers, the internet, and cloud computing for business purpose, is low but very heterogeneous and positively associated with size and formal status. Second, most firms still rely on pre-digital technologies to perform general business functions, such as business administration, production planning, supply chain management, marketing, sales, and payment. Third, most firms, including large and formal firms, still rely on manual methods or manually operated machines to perform critical pro duction tasks that are sector specific, such as harvesting in agriculture or packaging in food processing. The paper presents evidence of three main challenges to improve technology adoption: access to finance, information, and knowledge (firm capabilities), and access to markets and competition.
Publication(World Bank, Washington, DC, 2016-01) Cusolito, Ana ; Cirera, XavierThis technical note implements a firm-level productivity diagnostic using the census of manufacturing firms and a large services survey in Kenya. By using a number of stylized productivity indicators, we aim to identify the ability of Kenyan firms to grow. The information presented in this diagnostic will help to conduct evidence-based policy-making. Specifically, implementing firm-level productivity diagnostics provide the necessary information for (i) improving the targeting of economic policies, (ii) enhancing their effectiveness, (iii) making more accurate predictions of the effects of industry shocks and policy reforms on the economy, and (iv) understanding the behavior of macroeconomic variables by tracking the evolution of variables at the firm-level. This note shows that there is a lot of heterogeneity in firms’ attributes and performance, and this can potentially be attributed to the presence of economic distortions that affect the efficient allocation of resources across firms, with the manufacturing sector showing a lackluster performance compared to the services sector. Overall, the findings highlight the importance of locating productivity at the center of the competitiveness agenda as a key instrument for employment creation and poverty reduction.
Publication(World Bank, Washington, DC, 2016-10) Cirera, Xavier ; Lage, Filipe ; Sabetti, LeonardThis paper examines empirically the links between adoption of information and communications technology (ICT), defined as usage by firms, innovation, and productivity using firm-level data for a sample of six Sub-Saharan African countries: the Democratic Republic of Congo (DRC), Ghana, Kenya, Tanzania, Uganda, and Zambia. Although adoption of information and communications technology in these countries is still lagging behind OECD countries, there is significant heterogeneity on adoption rates across the countries. Kenya has the largest adoption rate of computer, software, and Internet usage. The Democratic Republic of Congo and Tanzania experience lower adoption rates. The degree of internationalization of the firm, use of technology, and extent of competition are important factors explaining firm-level use of ICT. The results of the estimates suggest that ICT use is an important and robust enabler of product, process, and organization innovation across all six countries. However, the final impact on productivity depends on the degree of novelty of the innovation introduced by the firm.
Publication(World Bank, Washington, DC, 2017-01) Cirera, Xavier ; Fattal Jaef, Roberto N. ; Maemir, Hibret B.This paper uses comprehensive and comparable firm-level manufacturing census data from four Sub-Saharan African countries to examine the extent, costs, and nature of within-industry resource misallocation across heterogeneous firms. The paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms toward low-productivity ones in all four countries, although the magnitude differs across countries. The paper shows that a hypothetical reallocation of resources that equalizes marginal returns across firms would increase manufacturing productivity by 31.4 percent in Cote d'Ivoire and as much as 162.7 percent in Kenya. The paper emphasizes the importance of the quality of the underlying data, by comparing the results against those from the World Bank Enterprise Surveys. The comparison finds that the survey-based results underestimate the extent of misallocation vis-a-vis the census. Finally, the paper finds that the size of existing distortions is correlated with various measures of business environment, such as lack of access to finance, corruption, and regulations.
Publication(Published by Oxford University Press on behalf of the World Bank, 2020-02) Cirera, Xavier ; Fattal-Jaef, Roberto ; Maemir, HibretThis paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms towards low-productivity ones, although the magnitude differs across countries. Estimated aggregate productivity gains from the hypothetical equalization of marginal returns range from 30 percent in Côte d’Ivoire to 160 percent in Kenya. The magnitude of reallocation gains appears considerably lower when performing the same counterfactual exercise based on the World Bank Enterprise Surveys once the value-added shares of industries are adjusted using the census data. This suggests that linking firm-level survey data to aggregate outcomes requires census-type data or sampling methods that take the true structure of production into account.