O'Connell, Stephen D.Dutz, Mark A.2013-04-112013-04-112013-02https://hdl.handle.net/10986/13155This study investigates the impact of key business environment indicators on productivity, innovation, and growth in Sri Lanka through a cluster-level productivity analysis, a firm-level total factor productivity analysis, and a firm-level innovation analysis. For the cluster-level productivity analysis (as measured by output and value added per worker), it combines two established data sources in a novel way by importing average 'industry-size-location' cluster-level business environment variables from the World Bank Enterprise Survey to the comprehensive Sri Lanka Census of Industry productivity data available for similar clusters of enterprises. For the firm-level total factor productivity analysis, it compares data from the 2011 World Bank Enterprise Survey with those from 2004. For the firm-level innovation analysis, it compares findings from the 2011 World Bank Enterprise Survey with a representative sample of enterprises collected as part of the Sri Lanka Longitudinal Survey of Enterprises. The empirical findings highlight the importance -- for cluster-level productivity, firm-level total factor productivity, and innovation -- of connectivity to global knowledge (reflected by one or more of export participation, directly imported inputs, foreign ownership, and use of the internet), availability of skills, access to finance, and competition. The paper also presents evidence, under the assumption that the samples are statistically representative, that both allocative and average technical efficiency have improved, with allocative efficiency increasing roughly four-fold between 2003 and 2010, and accounting for the overwhelming share of the aggregate increase in total factor productivity over this time period. Most of the improvement in allocative efficiency has occurred among larger firms, and in large rather than small cities.en-USCC BY 3.0 IGOACCESS TO INFORMATIONACCESS TO THE INTERNETACCOUNTINGAGRICULTUREALLOCATIVE EFFICIENCYBEST PRACTICESBUSINESS ENVIRONMENTBUSINESS OPERATIONSBUSINESS PROCESSBUSINESS PROCESSESBUSINESS REGULATIONBUSINESS SERVICESBUYERSCAPABILITIESCAPABILITYCAPACITY UTILIZATIONCAPITAL ASSETCAPITAL EXPENDITURECAPITAL GOODSCAPITAL INVESTMENTCOMPARATIVE ANALYSISCOMPETENCIESCOMPETITIVENESSCOMPETITORSCONFIDENTIALITYCONNECTIVITYCONSULTING FIRMSCUSTOMSDATA COLLECTIONDEBTDEVELOPMENT POLICYDISCUSSIONSDISTORTED INCENTIVESDRIVERSE-MAILECONOMIC GROWTHELASTICITYELECTRICITYEMPIRICAL EVIDENCEEMPLOYMENTEMPLOYMENT GROWTHENTERPRISE SURVEYENTERPRISE SURVEYSEQUIPMENTEXPLORATIONEXPORT MARKETSEXPORT OPPORTUNITIESEXPORTSEXTERNAL KNOWLEDGEFINANCIAL SYSTEMFOREIGN COMPETITIONGDPGDP PER CAPITAGLOBAL KNOWLEDGEGLOBALIZATIONGROWTH PATHGROWTH POTENTIALGROWTH RATEGROWTH STRATEGIESGROWTH THEORYHUMAN CAPITALIDEASINCOME LEVELSINDUSTRY PRODUCTIVITYINEFFICIENCYINNOVATIONINNOVATION POLICYINNOVATIONSINSPECTIONSINTANGIBLE ASSETSINTEGRATIONINTEREST RATEINTEREST RATESKNOWLEDGE ASSETSKNOWLEDGE FLOWSLABOR MARKETSLABOR PRODUCTIVITYLEARNINGLICENSELICENSESMANAGERIAL SKILLSMANUFACTURINGMARKET COMPETITIONMARKET ECONOMYMARKET POWERMARKET SHARESMARKETINGMATERIALMEDIUM ENTERPRISESMETRICSMIDDLE INCOME COUNTRIESMOBILE PHONESMOTIVATIONNATIONAL INCOMENETWORKSNEW TECHNOLOGIESNEW TECHNOLOGYOPEN ACCESSORGANIZATIONAL INNOVATIONORGANIZATIONAL INNOVATIONSOUTPUTSOVERVALUATIONPATENTSPER CAPITA INCOMEPER CAPITA INCOMESPHYSICAL INFRASTRUCTUREPOLICY MAKERSPOSITIVE EXTERNALITIESPRIVATE INVESTMENTPRIVATE SECTORPRODUCT DEVELOPMENTPRODUCT INNOVATIONPRODUCTION FUNCTIONPRODUCTIVITY GROWTHPURCHASING POWERR&DREAL GDPREGULATORY ENVIRONMENTRELIABILITYRENT SEEKINGRESULTRESULTSSTRUCTURAL CHANGESUNK COSTSSUSTAINABLE GROWTHTAX RATESTECHNOLOGICAL ADVANCESTECHNOLOGY TRANSFERTECHNOLOGY TRANSFERSTELEPHONETELEPHONE LINESTHEORETICAL MODELSTIME PERIODTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY ANALYSISTOTAL OUTPUTVALUE ADDEDVALUE CHAINSWAGESWEALTHWEALTH CREATIONWEBWORKFORCEWorld Bank10.1596/1813-9450-6354