Publication: Heterogeneous Effects of the de jure and de facto Business Environment: Findings from Multiple Data Sets on the Business Environment
Date
2020-01
ISSN
Published
2020-01
Author(s)
Zhenwei Qiang, Christine
Wang, He
Xu, L. Colin
Abstract
Using multiple sources of national- and
firm-level data around the world, this paper investigates
how the effects of the business environment depend on
whether the measure is de jure or de facto, and how
business environment effects differ by ownership and size.
The paper compares estimates of business environment effects
from three data sources, and modifies the priors on the
relative importance of various elements of the business
environment. Among four aspects of the business environment,
at least two sets are robust and a third set does not
contradict the other two: access to finance, electricity,
internet, and human capital. The effects of de jure business
environment indicators on firm performances depend on
measures of contract enforcement. Foreign-owned firms
benefit more from the maintenance of physical safety and
ease in obtaining construction permits, and gain competitive
advantage in productivity when domestic infrastructure or
access to finance is worse. Relatively small firms benefit
more from corruption control, basic and modern
infrastructure, human capital, and land access. Relatively
large firms benefit more from physical safety. Access to
finance is important for the expansion of smaller firms and
the productivity of large firms.
Citation
“Zhenwei Qiang, Christine; Wang, He; Xu, L. Colin. 2020. Heterogeneous Effects of the de jure and de facto Business Environment: Findings from Multiple Data Sets on the Business Environment. Policy Research Working Paper;No. 9115. © World Bank, Washington, DC. http://hdl.handle.net/10986/33229 License: CC BY 3.0 IGO.”
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