Islam, Asif M.

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Islam, Asif M.

Development Economics, Enterprise Analysis Group

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Development Economics, Enterprise Analysis Group

Last updated September 12, 2023

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Entrepreneurship and the Allocation of Government Spending Under Imperfect Markets

(World Bank Group, Washington, DC, 2015-01) Islam, Asif

Previous studies have established a negative relationship between total government spending and entrepreneurship activity. However, the relationship between the composition of government spending and entrepreneurial activity has been woefully under-researched. This paper fills this gap in the literature by empirically exploring the relationship between government spending on social and public goods and entrepreneurial activity under the assumption of credit market imperfections. By combining macroeconomic government spending data with individual-level entrepreneurship data, the analysis finds a positive relationship between increasing the share of social and public goods at the cost of private subsidies and entrepreneurship while confirming a negative relationship between total government consumption and entrepreneurial activity. The implication may be that expansion of total government spending includes huge increases in private subsidies, at the cost of social and public goods, and is detrimental for entrepreneurship.
Unequal before the Law: Measuring Legal Gender Disparities across the World

(World Bank, Washington, DC, 2016-08) Iqbal, Sarah ; Islam, Asif ; Ramalho, Rita ; Sakhonchik, Alena

Several economies have laws that treat women differently from men. This study explores the degree of such legal gender disparities across 167 economies around the world. This is achieved by constructing a simple measure of legal gender disparities to evaluate how countries perform. The average number of overall legal gender disparities across 167 economies is 17, ranging from a minimum of 2 to a maximum of 44. The maximum possible legal gender disparities is 71. The measure is found to be correlated with other measures of gender inequality, implying the measure does capture gender inequality while also differing from preexisting measures of gender inequality. A high degree of legal gender disparities is found to be negatively associated with a wide range of outcomes, including years of education of women relative to men, labor force participation rates of women relative to men, proportion of women top managers, proportion of women in parliament, percentage of women that borrowed from a financial institution relative to men, and child mortality rates. Subcategories within the legal disparities measure help to uncover specific types of legal disparities across economies.
Does Paternity Leave Matter for Female Employment in Developing Economies?: Evidence from Firm Data

(World Bank, Washington, DC, 2016-03) Amin, Mohammad ; Islam, Asif ; Sakhonchik, Alena

For a sample of 53 developing countries, the results show that women's employment among private firms is significantly higher in countries that mandate paternity leave versus those that do not. A conservative estimate suggests an increase of 6.8 percentage points in the proportion of women workers associated with the mandating of paternity leave.
Human Capital Accumulation at Work: Estimates for the World and Implications for Development

(World Bank, Washington, DC, 2021-09) Jedwab, Remi ; Romer, Paul ; Islam, Asif ; Samaniego, Roberto

In this paper, the authors: (i) study wage-experience profiles and obtain measures of returns to potential work experience using data from about 24 million individuals in 1,084 household surveys and census samples across 145 countries; (ii) show that returns to work experience are strongly correlated with economic development—workers in developed countries appear to accumulate twice more human capital at work than workers in developing countries; (iii) use a simple accounting framework to find that the contribution of work experience to human capital accumulation and economic development might be as important as the contribution of education itself; and (iv) employ panel regressions to investigate how changes in the returns over time correlate with several factors such as economic recessions, transitions, and human capital stocks.
Women Managers and the Gender-Based Gap in Access to Education: Evidence from Firm-Level Data in Developing Countries

(World Bank, Washington, DC, 2015-05) Amin, Mohammad ; Islam, Asif

Several studies explore the differences in men’s and women’s labor market participation rates and wages. Some of these differences have been linked to gender disparities in education attainment and access. The present paper contributes to this literature by analyzing the relationship between the proclivity of a firm to have a female top manager and access to education among women relative to men in the country. The paper combines the literature on women’s careers in management, which has mostly focused on developed countries, with the development literature that has emphasized the importance of access to education. Using firm-level data for 73 developing countries, the analysis finds strong evidence that countries with a higher proportion of female top managers also have higher enrollment rates for women relative to men in primary, secondary, and tertiary education.
An Exploration of the Relationship between Police Presence, Crime, and Business in Developing Countries

(World Bank, Washington, DC, 2016-02) Islam, Asif

Economic theory predicts that a rise in police presence will reduce criminal activity. However several studies in the literature have found mixed results. This study adds to the literature by exploring the relationship between the size of the police force and crime experienced by firms. Using survey data for about 12,000 firms in a cross-section of 27 developing countries, the study finds that increasing the size of the police force is negatively associated with crime experienced by firms. The results are confirmed using a panel of firms for a subset of countries for which data are available. The study also finds that this negative relationship is stronger under certain macro-economic circumstances.
Gendered Laws, Informal Origins, and Subsequent Performance

(World Bank, Washington, DC, 2021-08) Hyland, Marie ; Islam, Asif

This research explores the relationship between laws that discriminate on the basis of gender and the probability that a female-owned business begins operating in the informal sector. This is achieved by tracing the origins of formal businesses surveyed in the World Bank Enterprise Surveys and merging this with information on the level of legal equality between genders as measured by the Women, Business and the Law database. In addition, the research explores whether starting a business informally has any differential effect on subsequent firm performance depending on the gender of the owner(s). The results show that gender discriminatory laws increase the likelihood that firms with female owners will begin operations in the informal sector; as expected, this does not hold for enterprises that are solely owned by men. Furthermore, the research provides evidence that firms that began operations informally have poorer performance years later—a relationship that exists both for firms with female owners and for firms fully owned by men. The results show notable variation by region.
How Prevalent Are Credit-Constrained Firms in the Formal Private Sector?: Evidence Using Global Surveys

(World Bank, Washington, DC, 2023-07-13) Islam, Asif M. ; Rodriguez Meza, Jorge

This study develops a measure of firm-level credit constraints by leveraging refinements in survey instruments for a widely used database. Using data on more than 65,000 firms across 109 economies, the study uncovers several insights. Around 30 percent of firms in the formal private sector are credit constrained. Firms that are credit-constrained tend to be smaller and negatively correlated with performance. The more developed the economy, the lower the share of credit-constrained firms. One striking finding is that 52 percent of firms do not apply for loans as they have sufficient credit. For some economies, this may be more indicative of poor opportunities for the expansion of firms and thus the lack of demand for credit. The findings suggest that for policies that improve access to credit to be effective, they should go hand in hand with interventions that provide opportunities for firms to expand.
Taming Private Leviathans: Regulation versus Taxation

(World Bank, Washington, DC, 2021-01) Arezki, Rabah ; Islam, Asif ; Rota-Graziosi, Gregoire

This paper explores the interplay between concentration of wealth and policies, namely regulation and taxation. The paper exploits variation in exposure to international commodity prices. Using a global panel data set of the net worth of billionaires, the results point to a positive relationship between commodity prices and the concentration of wealth at the top. Regulation especially pertaining to competition is found to limit the effects of commodity price shocks on the concentration of wealth, while taxation has little effect. Moreover, commodity price shocks crowd out non-resource tax revenue, hence limiting the scope for income transfers and redistribution. The results are consistent with the primacy of ex ante interventions over ex post ones for addressing wealth inequality.
Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries

(World Bank, Washington, DC, 2019-12) Amin, Mohammad ; Islam, Asif ; Khalid, Usman

Using firm-level survey data on registered private firms collected by the World Bank's Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparable data are available. The results show that labor productivity in the upper-middle-income countries is about 57.5 percent lower than in the high-income countries. The productivity difference is robust and holds for firms of different sizes and industries. The analysis uses the Oaxaca-Blinder decomposition to identify the sources of the productivity gap. It finds that the endowment effect and the structural effect contribute roughly equally to the productivity gap. Several firm- and country-level variables determine the productivity gap. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management proxied by international quality certification. Factors that contribute most via the structural effect include market size, secondary education attainment, and law and order. Thus, the results underline the importance of human capital, institutions, and market size for closing the productivity gap between the upper-middle-income and high-income countries.