Person:
Iacovone, Leonardo
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Global Practice on Trade and Competitiveness, The World Bank
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January 31, 2023
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Publication
Regional Productivity Convergence in Peru
(World Bank, Washington, DC, 2015-11)This paper examines whether labor productivity converged across Peru’s regions (“departments”) during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing). -
Publication
Organizing Knowledge to Compete: Impacts of Capacity Building Programs on Firm Organization
(World Bank, Washington, DC, 2016-04)A growing literature aiming at explaining differences across firms in productivity and access to global export markets has focused on the internal organization of firms. This paper contributes to this literature by evaluating the impact of a program that focuses on enhancing competitiveness of small and medium enterprises in Brazil by providing coaching and consulting on management and production practices. Specifically, the paper tests whether the program induces treated firms to reorganize knowledge by adding more layers of different skills and competencies to their workforces. Using a unique firm-level dataset, the number of layers of the firms are compared before and after the program. The impact of the program is identified by relying on an instrumental variable approach, exploiting the quasi-experiment roll-out of its implementation, which was carried out at different times across Brazilian regions. The analysis finds that the program had an effect and that this effect is heterogeneous. The program is particularly effective in promoting the reorganization of firms with initially fewer layers. The results confirm another finding of the literature, namely that in re-organized firms inequality of wages increases, as firms pay higher wages in added higher layers than in pre-existing ones. Finally, these results are used to discuss how the change in firms' organization is positively correlated with export performance.