Cusolito, Ana Paula

Person:
Cusolito, Ana Paula

Finance, Competitiveness, and Innovation Global Practice

Author Name Variants

Cusolito, Ana Paula, Cusolito, Ana P., Cusolito, Ana

Fields of Specialization

SME development, Productivity and growth, Firm innovation, Firm dynamics, Entrepreneurship, Innovation, Trade

Departments

Finance, Competitiveness, and Innovation Global Practice

Last updated:October 23, 2025

Biography

Ana Paula Cusolito is a Senior Economist currently working for the Finance, Competitiveness, and Innovation Global Practice. Her research interests and experience focus on firm-level productivity, innovation, entrepreneurship and trade. More recently, she has been involved in a number of experiments to evaluate programs aimed at promoting innovation and entrepreneurship. She has experience working mainly in the Europe & Central Asia and Latin America regions. Ana Paula’s work has been published at the Journal of Banking and Financial Economics, Journal of Development Economics, IZA Journal of Labor and Development, and Journal of Development Effectiveness. Before working at the World Bank, Ana Paula worked at the Inter-American Development Bank and Government of Argentina. Ana Paula has a Ph.D. in Economics from Universitat Pompeu Fabra.

URI

https://hdl.handle.net/10986/38937

Full item page

Publication Search Results

Now showing1 - 10 of 30

TIDES of Change: Igniting Productivity Growth in Europe and Central Asia
(Washington, DC: World Bank, 2025-10-25) Iacovone, Leonardo; Aviomoh, Henry; Belacin, Matias; Bossavie, Laurent; Cusolito, Ana Paula; de Hoyos, Rafael; Ottaviano, Gianmarco; Scheifele, Fabian; Torre, Iván; Yoshino, Yutaka
Europe and Central Asia (ECA) is at a turning point. After a period of convergence and reform-driven growth during the first decade of the 2000s, the region’s productivity engine has lost momentum. Total factor productivity growth has halved since the global financial crisis, and the gains from capital deepening and labor expansion are no longer sufficient to sustain economic growth. If pre- 2008 trends in productivity growth had continued, average incomes would be around 60 percent higher today. Instead, misallocated resources, incomplete integration into global markets, and weak firm capabilities during a period of stalled reforms have left the region below its potential. This report lays out a new agenda for boosting productivity. Drawing on unique firm-level data from across the region, it shows how deeper trade integration, smarter investment, and adoption of technology, coupled with improved firm capabilities and investments in workers’ skills, can unlock significant productivity gains. The report highlights the need to face the challenges of the unrealized potential of exports and foreign direct investment, insufficient level of digital technology adoption, and limited investment in skills training (offered by only one in five firms in ECA today), coupled with weak foundational skills. The evidence is clear: Addressing these challenges through targeted reforms in improving market functioning, technology adoption, export promotion, and skills development is crucial for unlocking the region’s productivity potential. The path forward is captured by the policy framework of trade, investment, digitalization, efficiency, and skills (TIDES)—the levers that can help boost the region’s productivity. This flagship report is not just a diagnosis of what went wrong; it is a call to action for what must come next. Focusing on TIDES, with the right policies and political will, ECA can reclaim its momentum and deliver a new era of shared prosperity.
Europe and Central Asia Economic Update, Fall 2025: Jobs and Prosperity
(Washington, DC: World Bank, 2025-10-07) Cusolito, Ana Paula; Izvorski, Ivailo; Kasyanenko, Sergiy; Lokshin, Michael M.; Torre, Iván
Economic growth in Europe and Central Asia eased to 2.4 percent in 2025, reflecting a sharp slowdown in the Russian Federation. Outside Russia, growth momentum remains broadly resilient, supported by private consumption, infrastructure spending, and a gradual recovery in trade. While a modest pickup is expected in 2026–27, growth is likely to remain well below the 2000–19 average. In this slow-growth environment, downside risks dominate, with the potential for setbacks in reforms posing a significant threat to investor confidence, private sector dynamism, and job creation. The region's labor market shows signs of resilience but faces deep-rooted structural challenges. Since the start of transition from planned to market in the early 1990s, employment has grown faster than the region's population, driven by rising labor force participation and a shift out of agriculture. Yet most new jobs are in low-productivity services, and productivity growth has stalled. Demographic pressures — aging, shrinking workforces, and emigration —add to the strain. Structural bottlenecks, including weak competition, limited access to finance, and outdated skills systems, constrain firm growth and innovation. The report calls for a three-pillar reform agenda: invest in foundational infrastructure for jobs, strengthen the business environment, and mobilize private capital. Targeting five priority sectors—manufacturing, agribusiness, tourism, healthcare, and energy—can help turn growth into better jobs and shared prosperity.
Unleashing Productivity through Firm Financing
(Washington, DC: World Bank, 2024-09-30) Didier, Tatiana; Cusolito, Ana Paula
The ability of firms to finance investments in physical and human capital and innovate through digital, green, and other technologies is central to productivity and economic growth. Yet a myriad of distortions and frictions can prevent the efficient allocation of financial resources to firms, negatively impacting their growth and productivity. Drawing from a newly constructed Orbis data set for 2.5 million private firms, Unleashing Productivity through Firm Financing shows that misallocation of finance stifles aggregate productivity. This volume focuses on the links among firm financing, financial constraints, and firm performance, using comprehensive and underexploited firm-level data for emerging market and developing economies. This work explores both the effects of firms’ access to finance and the composition of finance (equity versus debt) on firm performance. It also provides a novel, quantitative assessment of the extent of constraints in debt and equity financing for private firms of different sizes and the impact of such constraints on aggregate growth and productivity. The findings provide robust analytical underpinnings for existing, practical knowledge in supporting access to finance for small and medium-sized enterprises in emerging market and developing economies.
The Financial Premium and Real Cost of Bureaucrats in Businesses
(Washington, DC: World Bank, 2024-09-26) Cusolito, Ana P.; Fattal Jaef, Roberto N.; Patiño Peña, Fausto; Singh, Akshat V.
This paper characterizes finance allocation distortions in capital markets across state-owned and private-owned enterprises. It does so by implementing Whited and Zhao’s (2021) methodology to infer idiosyncratic financial distortions on a novel firm-level database containing information on the ownership structure of firms operating in 24 European countries during 2010–16. The analysis finds that firms with public authorities as direct shareholders (state-owned enterprises) have subsidized access to debt and equity, compared to their private counterparts. The paper then quantifies the macroeconomic effects of removing state-owned firms and reallocating their financial resources toward the private sector. The findings show that although state-owned enterprises are on average subsidized relative to private firms, removal of state-owned enterprises from the market may lead to aggregate productivity losses of up to 40 percent due to their superior technical efficiency in some sectors. Targeted reforms that only shut down poorly performing state-owned enterprises lead to aggregate total factor productivity gains in every country, reaching up to 15 percent. Reforms that in addition remove distortions before reallocating the released resources toward more productive firms increase productivity up to 83.7 percent.
The Upside of Digital for the Middle East and North Africa: How Digital Technology Adoption Can Accelerate Growth and Create Jobs
(Washington, DC: World Bank, 2022-03-16) Gévaudan, Clément; Cusolito, Ana Paula; Wood, Christina A.; Lederman, Daniel
The argument that digitalization fosters economic activity has been strengthened by the global COVID-19 pandemic. Because digital technologies are general-purpose technologies that are usable across a wide variety of economic activities, the gains from achieving universal coverage of digital services are likely to be large and shared throughout each economy. However, the Middle East and North Africa region suffers from a “digital paradox”: the region’s population uses social media more than expected for its level of gross domestic product (GDP) per capita but uses the internet or other digital tools to make payments less than expected. The Upside of Digital for the Middle East and North Africa: How Digital Technology Adoption Can Accelerate Growth and Create Jobs presents evidence that the socioeconomic gains of digitalizing the economies of the region are huge: GDP per capita could rise by more than 40 percent; manufacturing revenue per unit of factors of production could increase by 37 percent; employment in manufacturing could rise by 7 percent; tourist arrivals could rise by 70 percent, creating jobs in the hospitality sector; long-term unemployment rates could fall to negligible levels; and female labor force participation could double to more than 40 percent. To reap these gains, universal access to digital services is crucial, as is their widespread use for economic purposes. The book explores how fast the region could approach universal coverage, whether targeting the rollout of digital infrastructure services makes a difference, and what is needed to increase the use of digital payment tools. The authors find that targeting underserved populations and areas can accelerate the achievement of universal access, while fostering competition and improving the functioning of financial and telecommunications sectors can encourage the adoption of digital technologies. In addition, building societal trust in the government and in related institutions such as banks and financial services is critical for fostering the increased use of digital payment tools.
The Role of Financial (Mis)allocation on Real (Mis)allocation: Firm-level Evidence for European Countries
(Washington, DC: World Bank, 2024-06-20) Cusolito, Ana P.; Fattal-Jaef, Roberto N.; Mare, Davide S.; Singh, Akshat V,
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.
Capacity Building as a Route to Export Market Expansion: A Six-Country Experiment in the Western Balkans
(World Bank, Washington, DC, 2022-12) Darova, Omella; Cusolito, Ana P.; McKenzie, David
The limited market size of many small emerging economies is a key constraint to the growth of innovative small and medium enterprises. Exporting offers a potential solution, but firms may struggle to locate and appeal to foreign buyers. A six-country randomized experiment was conducted with 225 firms in the Western Balkans to test the effectiveness of 30 hours of live group-based training and 5 hours of one-on-one remote consulting in overcoming these constraints. Treated firms used techniques such as search engine optimization and improved Facebook content to increase their digital presence and better reach foreign customers. A year later, positive and significant impacts are found on the number of customers, and a significant intensive margin increase in export sales. Qualitative interviews suggest this improvement came from a combination of sector-specific advice on market expansion, and through an encouragement effect which gave entrepreneurs the confidence to try new sales strategies.
Helping Western Balkan SMEs Expand Exports Through Online Training and Consulting
(Washington, DC: World Bank, 2022-12-01) Darova, Ornella; Cusolito, Ana Paula; Mckenzie, David J.
One of the key challenges facing innovative small and medium enterprises is customer acquisition. This is especially a constraint in less populated countries like those in the Western Balkans, where domestic demand can be limited for specialized services and products. Exporting to larger and richer countries provides a potential solution, but expanding into foreign markets involves considerable search frictions, and small firms may lack the skills and confidence to market to foreign buyers. The authors test the effectiveness of a capacity building program that aimed to help firms bounce back from the COVID-19 pandemic and help them expand their markets and export more. The results show that capacity building can help provide the skills and confidence for innovative SMEs to better reach and sell to foreign buyers. They also provide some of the first evidence on offering training virtually to firms in multiple countries at once, which offers promise for the scalability of such efforts.
The Effects of Digital-Technology Adoption on Productivity and Factor Demand: Firm-Level Evidence from Developing Countries
(World Bank, Washington, DC, 2020-07) Pena, Jorge; Cusolito, Ana Paula; Lederman, Daniel
This paper presents firm-level estimates of revenue-based total factor productivity premiums of manufacturing firms adopting digital technology in 82 developing economies over 2002–19. The paper estimates productivity using the control function approach and assuming an endogenous revenue-based total factor productivity process, which is a function of multiple firm-choice variables. It estimates the effects of digital technology adoption, learning by exporting, and managerial experience on revenue-based total factor productivity and factor demand. The results reject the 0 hypothesis of an exogenous revenue-based total factor productivity process, in favor of one in which digital technology adoption, along with the other choice variables, affects revenue-based total factor productivity and factor demand. The estimated premiums are positive for 67.3 (email adoption), 54.6 (website adoption), 59.4 (learning by exporting), and 60.6 (managerial experience) percent of the sample. The probability-adjusted median (log) revenue-based total factor productivity premium associated with email adoption is 1.6 percent and that of website adoption is 2.2 percent, with the latter being higher than the premiums corresponding to exporting and managerial experience. On average, changes in digital technology adoption, email, and website are labor and capital augmenting. The paper also explores the role of complementarities among the firm choice variables.
Proximity to the Frontier, Markups, and the Response of Innovation to Foreign Competition: Evidence from Matched Production-Innovation Surveys in Chile
(World Bank, Washington, DC, 2021-08) Garcia-Marin, Alvaro; Cusolito, Ana Paula; Maloney, William F.
This paper employs a matched firm production/innovation panel data set from Chile to explore the response of firm innovation to the increased competition arising from the China shock. In addition to covering a wider range of innovation inputs and outputs than previously possible, the data allow generating measures of markups and efficiency (physical total factor productivity) that correspond more closely to the concepts of rents and technological leadership envisaged in the Schumpeterian literature. Except for the 10 percent most productive plants, increased competition depresses most measures of innovation. Falling rents exacerbate declines among laggards, while rising rents further increase innovation among leaders.