Kinda, TidianePlane, PatrickVeganzones-Varoudakis, Marie-Ange2012-03-192012-03-192009-03-01https://hdl.handle.net/10986/4064Drawing on the World Bank Investment Climate Assessment surveys, this paper investigates the relationship between firm-level technical efficiency and the investment climate for 22 developing economies and eight manufacturing industries. The authors first propose three measures of firms' productive performance: labor productivity, total factor productivity, and technical efficiency. They show that, on average, enterprises in the Middle East and North Africa have performed poorly compared with other countries in the sample. The exception is Morocco, whose various measures of firm-level productivity rank close to the ones of the most productive economies. The analysis also reveals that the competitiveness of countries in the region has been handicapped by high unit labor cost, compared with main competitors like China and India. The empirical results show then? that the investment climate matters for firms' productive performance. This is true (depending on the industry) for the quality of various infrastructure, the experience and education level of the labor force, the cost of and access to financing, as well as different dimensions of the government-business relation. The analysis reveals that some industries, more exposed to international competition, are more sensitive to investment climate deficiencies. For some industries, this is also true for small and medium domestic enterprises that do not have the possibility to influence their investment climate or choose their location. These findings bear clear policy implications by showing that increasing firms' size and improving the investment climate (in particular of small and medium firms and industries more exposed to international competition) could constitute a powerful means of industrial development and competitiveness, in the Middle East and North Africa region in particular.CC BY 3.0 IGOACCESS TO CREDITADVERSE EFFECTAFFILIATED ORGANIZATIONSALLOCATIVE EFFICIENCYAVERAGE PRODUCTIVITYAVERAGE WAGEBARRIERS TO ENTRYBEST PRACTICEBUREAUCRACYBUSINESS CLIMATECALCULATIONCALCULATIONSCAPITALISMCOMPARATIVE ADVANTAGECOMPARATIVE ANALYSISCOMPARATIVE ECONOMICSCOMPETITIVE MARKETSCOMPETITIVENESSCONSTANT RETURNS TO SCALECONTRIBUTIONCORPORATIONCOST OF LABORCREDIT LINECURRENT MARKET RATEDEPENDANTDEVELOPMENT ECONOMICSDIVERSIFICATIONECONOMETRICSECONOMIC COOPERATIONECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC RESEARCHECONOMICSELASTICITYEXCHANGE RATEEXCHANGE RATESEXPORTSEXTERNAL SHOCKSEXTERNALITIESFACTOR MARKETSFACTORS OF PRODUCTIONFINANCIAL CONSTRAINTSFINANCIAL ENVIRONMENTFINANCIAL SECTORFINANCIAL SYSTEMFOREIGN CAPITALFOREIGN FIRMSFOREIGN INVESTORSFOREIGN OWNERSHIPGDPGDP PER CAPITAGENERAL PUBLICGOOD INVESTMENT CLIMATEGOVERNMENT REGULATIONSGROSS VALUEHUMAN CAPITALINCOMEINCOMESINCREASING RETURNSINCREASING RETURNS TO SCALEINDUSTRIALIZATIONINEFFICIENCYINNOVATIONINSURANCEINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINVESTMENT CLIMATEINVESTMENT CLIMATE ASSESSMENTINVESTMENT CLIMATE ASSESSMENTSINVESTMENT CLIMATE CONSTRAINTSINVESTMENT OPPORTUNITIESINVESTMENT PERFORMANCESINVESTMENT PROJECTSJOB CREATIONLABOR COSTSLABOR FORCELABOR PRODUCTIVITYLABOR REGULATIONSLABOR RELATIONSLESS DEVELOPED COUNTRIESLEVEL OF CONFIDENCELEVEL OF EDUCATIONMACROECONOMICSMARGINAL COSTSMARGINAL PRODUCTIVITYMEDIUM ENTERPRISESNATURAL RESOURCESOPTIMIZATIONOUTPUTSPERFECT COMPETITIONPERMANENT WORKERSPOLITICAL ECONOMYPOOR INVESTMENTPOSITIVE EXTERNALITIESPRICE TAKERSPRIVATE INVESTMENTPRIVATE SECTORPRODUCTION COSTSPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTION INPUTSPRODUCTIVITYPROFITABILITYPROFITABLE INVESTMENTPROPERTY RIGHTSPUBLIC ECONOMICSPUBLIC EXPENDITUREPUBLIC GOODSPUBLIC INVESTMENTQUESTIONNAIREREGULATORY FRAMEWORKSALARIESSALESSKILLED LABORSMALL BUSINESSESSPECIALIZATIONSUPPLIERSTAXTAX RATETAXATIONTELECOMMUNICATIONSTOTAL COSTTOTAL FACTOR PRODUCTIVITYTRADE POLICYUNEMPLOYMENTUNSKILLED WORKERSVALUE ADDEDWAGESWORK FORCEWORLD MARKETWORLD MARKETSWORTHWorld Bank10.1596/1813-9450-4869