Micro Efficiency and Macro Growth

This paper is about micro foundations of productivity and growth. There are several studies on productivity for advanced economies but relatively few for developing countries. Using data from the investment climate surveys of the World Bank, estimation results from 45 developing countries, complemented by extended analysis at firm and industry levels for Brazil and India for the period 2002-05, indicate the following: (i) confirmation of the importance of total factor productivity at firm, industry and national levels, but total factor productivity progressively tapers off at each level of aggregation implying that there is a less than one-to-one relationship between micro-efficiency, sector growth, and macro growth; (ii) capital accumulation is more important at the macro level than the micro level; (iii) productivity at the micro level is driven by research and development, the capacity utilization rate, and adoption of foreign technology (all of which involve management decisions), and is negatively related to corruption and instability, tax, and financial regulations; and (iii) confirmation of the lower contribution of total factor productivity to output growth in developing countries than in developed economies. Management decisions are involved in a lot of day-to-day operations at the firm level and therefore management is an unmeasured input. In developing countries, at the firm level, there is a need to understand the contribution of quality of inputs (management quality, education and labor quality, training, experience of workers, use of computers at work) and also the role of external agglomeration (for example, location in a booming city, competitive pressures from new firms, trade competition, and regulations).

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Bibliographic Details
Main Authors: Bayraktar, Nihal, Nallari, Raj
Language:English
Published: 2010-04-01
Subjects:ABSOLUTE VALUE, AGGREGATE LEVEL, AGRICULTURE, ALLOCATIVE EFFICIENCY, AVERAGE GROWTH, AVERAGE GROWTH RATE, AVERAGE LEVEL, BANKRUPTCY, BEST PRACTICES, BOOK VALUE, BUSINESSES, CAPITAL ACCUMULATION, CAPITAL STOCK, CAPITAL TIMES, COMPARATIVE ANALYSIS, COMPUTERS, CONSTANT RETURNS, CONSTANT RETURNS TO SCALE, COUNTRY REGRESSIONS, CROSS COUNTRY, CUSTOMS, DATA ANALYSIS, DATA AVAILABILITY, DAY-TO-DAY OPERATIONS, DEPENDENT VARIABLE, DETERMINANTS OF GROWTH, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT INDICATORS, DISAGGREGATED LEVEL, DOMESTIC MARKETS, ECONOMIC ACTIVITY, ECONOMIC EFFICIENCY, ECONOMIC GROWTH, ECONOMIC LITERATURE, ECONOMIC PERFORMANCE, ECONOMIC STUDIES, ECONOMIC THEORY, ELASTICITY, ELECTRICITY, EMAILS, EMPIRICAL EVIDENCE, EMPIRICAL STUDIES, EMPLOYMENT, ENTERPRISE SURVEY, ENTERPRISE SURVEYS, EQUIPMENT, ESP, ESTIMATION RESULTS, EXCHANGE RATE, EXPORT MARKETS, EXPORTS, EXTERNAL FACTORS, FACTOR ACCUMULATION, FACTOR PRICES, FACTORS OF PRODUCTION, FINANCIAL MARKETS, FOREIGN COMPETITION, FOREIGN DIRECT INVESTMENT, FOREIGN DIRECT INVESTMENTS, FUTURE RESEARCH, GDP, GENERAL EQUILIBRIUM, GENERAL EQUILIBRIUM ANALYSIS, GLOBAL ECONOMY, GLOBAL LEVEL, GLOBAL MARKETS, GROSS DOMESTIC PRODUCT, GROSS OUTPUT, GROSS VALUE, GROWTH ACCOUNTING, GROWTH ANALYSIS, GROWTH MODELS, GROWTH PERFORMANCE, GROWTH PROCESS, GROWTH RATE, GROWTH RATE OF OUTPUT, GROWTH RATES, GROWTH REGRESSIONS, HUMAN CAPITAL, IMPROVING PRODUCTIVITY, INCOME, INCOME PER CAPITA, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDUSTRY PRODUCTIVITY, INNOVATION, INSTITUTION, INTEREST RATES, INTERNAL FACTORS, INTERNATIONAL STANDARDS, INTERNATIONAL TRADE, INVESTMENT CLIMATE, LABOR INPUT, LABOR REGULATIONS, LEGAL SYSTEM, LONG-TERM GROWTH, MACROECONOMIC GROWTH, MACROECONOMIC INSTABILITY, MANUFACTURING, MANUFACTURING INDUSTRIES, MARGINAL PRODUCT, MARKET ECONOMIES, MARKET IMPERFECTIONS, MARKET SHARE, MATERIAL, MONETARY ECONOMICS, MONOPOLY, NATURAL MONOPOLIES, NEW TECHNOLOGIES, OUTPUT GROWTH, OUTPUT RATIO, OUTPUTS, PERFORMANCES, POLICY CHANGES, POLICY IMPLICATIONS, POLICY MAKERS, POLICY REFORMS, POLICY RESEARCH, POLITICAL ECONOMY, POOR COUNTRIES, PRODUCTION FUNCTION, PRODUCTION FUNCTIONS, PRODUCTION PROCESS, PRODUCTIVITY, PRODUCTIVITY CHANGE, R&D, REGULATORY POLICY, RELATIVE CONTRIBUTION, RESULT, SIGNIFICANT CORRELATION, SIGNIFICANT FACTOR, STANDARD FORMAT, TECHNICAL CHANGE, TECHNICAL PROGRESS, TELECOMMUNICATIONS, TFP, TIME PERIOD, TOP MANAGEMENT, TOTAL FACTOR PRODUCTIVITY, TOTAL FACTOR PRODUCTIVITY GROWTH, TOTAL OUTPUT, TRADE BARRIERS, TRADE LIBERALIZATION, TRADE POLICIES, TRADE POLICY, TRADE VOLUMES, TURNOVER RATE, USES, VALUE ADDED, WEB,
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100412113736
https://hdl.handle.net/10986/3754
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libraryname Biblioteca del Banco Mundial
language English
topic ABSOLUTE VALUE
AGGREGATE LEVEL
AGRICULTURE
ALLOCATIVE EFFICIENCY
AVERAGE GROWTH
AVERAGE GROWTH RATE
AVERAGE LEVEL
BANKRUPTCY
BEST PRACTICES
BOOK VALUE
BUSINESSES
CAPITAL ACCUMULATION
CAPITAL STOCK
CAPITAL TIMES
COMPARATIVE ANALYSIS
COMPUTERS
CONSTANT RETURNS
CONSTANT RETURNS TO SCALE
COUNTRY REGRESSIONS
CROSS COUNTRY
CUSTOMS
DATA ANALYSIS
DATA AVAILABILITY
DAY-TO-DAY OPERATIONS
DEPENDENT VARIABLE
DETERMINANTS OF GROWTH
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT INDICATORS
DISAGGREGATED LEVEL
DOMESTIC MARKETS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC LITERATURE
ECONOMIC PERFORMANCE
ECONOMIC STUDIES
ECONOMIC THEORY
ELASTICITY
ELECTRICITY
EMAILS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
ENTERPRISE SURVEY
ENTERPRISE SURVEYS
EQUIPMENT
ESP
ESTIMATION RESULTS
EXCHANGE RATE
EXPORT MARKETS
EXPORTS
EXTERNAL FACTORS
FACTOR ACCUMULATION
FACTOR PRICES
FACTORS OF PRODUCTION
FINANCIAL MARKETS
FOREIGN COMPETITION
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FUTURE RESEARCH
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GLOBAL ECONOMY
GLOBAL LEVEL
GLOBAL MARKETS
GROSS DOMESTIC PRODUCT
GROSS OUTPUT
GROSS VALUE
GROWTH ACCOUNTING
GROWTH ANALYSIS
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATE OF OUTPUT
GROWTH RATES
GROWTH REGRESSIONS
HUMAN CAPITAL
IMPROVING PRODUCTIVITY
INCOME
INCOME PER CAPITA
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INDUSTRY PRODUCTIVITY
INNOVATION
INSTITUTION
INTEREST RATES
INTERNAL FACTORS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTMENT CLIMATE
LABOR INPUT
LABOR REGULATIONS
LEGAL SYSTEM
LONG-TERM GROWTH
MACROECONOMIC GROWTH
MACROECONOMIC INSTABILITY
MANUFACTURING
MANUFACTURING INDUSTRIES
MARGINAL PRODUCT
MARKET ECONOMIES
MARKET IMPERFECTIONS
MARKET SHARE
MATERIAL
MONETARY ECONOMICS
MONOPOLY
NATURAL MONOPOLIES
NEW TECHNOLOGIES
OUTPUT GROWTH
OUTPUT RATIO
OUTPUTS
PERFORMANCES
POLICY CHANGES
POLICY IMPLICATIONS
POLICY MAKERS
POLICY REFORMS
POLICY RESEARCH
POLITICAL ECONOMY
POOR COUNTRIES
PRODUCTION FUNCTION
PRODUCTION FUNCTIONS
PRODUCTION PROCESS
PRODUCTIVITY
PRODUCTIVITY CHANGE
R&D
REGULATORY POLICY
RELATIVE CONTRIBUTION
RESULT
SIGNIFICANT CORRELATION
SIGNIFICANT FACTOR
STANDARD FORMAT
TECHNICAL CHANGE
TECHNICAL PROGRESS
TELECOMMUNICATIONS
TFP
TIME PERIOD
TOP MANAGEMENT
TOTAL FACTOR PRODUCTIVITY
TOTAL FACTOR PRODUCTIVITY GROWTH
TOTAL OUTPUT
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICIES
TRADE POLICY
TRADE VOLUMES
TURNOVER RATE
USES
VALUE ADDED
WEB
ABSOLUTE VALUE
AGGREGATE LEVEL
AGRICULTURE
ALLOCATIVE EFFICIENCY
AVERAGE GROWTH
AVERAGE GROWTH RATE
AVERAGE LEVEL
BANKRUPTCY
BEST PRACTICES
BOOK VALUE
BUSINESSES
CAPITAL ACCUMULATION
CAPITAL STOCK
CAPITAL TIMES
COMPARATIVE ANALYSIS
COMPUTERS
CONSTANT RETURNS
CONSTANT RETURNS TO SCALE
COUNTRY REGRESSIONS
CROSS COUNTRY
CUSTOMS
DATA ANALYSIS
DATA AVAILABILITY
DAY-TO-DAY OPERATIONS
DEPENDENT VARIABLE
DETERMINANTS OF GROWTH
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT INDICATORS
DISAGGREGATED LEVEL
DOMESTIC MARKETS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC LITERATURE
ECONOMIC PERFORMANCE
ECONOMIC STUDIES
ECONOMIC THEORY
ELASTICITY
ELECTRICITY
EMAILS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
ENTERPRISE SURVEY
ENTERPRISE SURVEYS
EQUIPMENT
ESP
ESTIMATION RESULTS
EXCHANGE RATE
EXPORT MARKETS
EXPORTS
EXTERNAL FACTORS
FACTOR ACCUMULATION
FACTOR PRICES
FACTORS OF PRODUCTION
FINANCIAL MARKETS
FOREIGN COMPETITION
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FUTURE RESEARCH
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GLOBAL ECONOMY
GLOBAL LEVEL
GLOBAL MARKETS
GROSS DOMESTIC PRODUCT
GROSS OUTPUT
GROSS VALUE
GROWTH ACCOUNTING
GROWTH ANALYSIS
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATE OF OUTPUT
GROWTH RATES
GROWTH REGRESSIONS
HUMAN CAPITAL
IMPROVING PRODUCTIVITY
INCOME
INCOME PER CAPITA
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INDUSTRY PRODUCTIVITY
INNOVATION
INSTITUTION
INTEREST RATES
INTERNAL FACTORS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTMENT CLIMATE
LABOR INPUT
LABOR REGULATIONS
LEGAL SYSTEM
LONG-TERM GROWTH
MACROECONOMIC GROWTH
MACROECONOMIC INSTABILITY
MANUFACTURING
MANUFACTURING INDUSTRIES
MARGINAL PRODUCT
MARKET ECONOMIES
MARKET IMPERFECTIONS
MARKET SHARE
MATERIAL
MONETARY ECONOMICS
MONOPOLY
NATURAL MONOPOLIES
NEW TECHNOLOGIES
OUTPUT GROWTH
OUTPUT RATIO
OUTPUTS
PERFORMANCES
POLICY CHANGES
POLICY IMPLICATIONS
POLICY MAKERS
POLICY REFORMS
POLICY RESEARCH
POLITICAL ECONOMY
POOR COUNTRIES
PRODUCTION FUNCTION
PRODUCTION FUNCTIONS
PRODUCTION PROCESS
PRODUCTIVITY
PRODUCTIVITY CHANGE
R&D
REGULATORY POLICY
RELATIVE CONTRIBUTION
RESULT
SIGNIFICANT CORRELATION
SIGNIFICANT FACTOR
STANDARD FORMAT
TECHNICAL CHANGE
TECHNICAL PROGRESS
TELECOMMUNICATIONS
TFP
TIME PERIOD
TOP MANAGEMENT
TOTAL FACTOR PRODUCTIVITY
TOTAL FACTOR PRODUCTIVITY GROWTH
TOTAL OUTPUT
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICIES
TRADE POLICY
TRADE VOLUMES
TURNOVER RATE
USES
VALUE ADDED
WEB
spellingShingle ABSOLUTE VALUE
AGGREGATE LEVEL
AGRICULTURE
ALLOCATIVE EFFICIENCY
AVERAGE GROWTH
AVERAGE GROWTH RATE
AVERAGE LEVEL
BANKRUPTCY
BEST PRACTICES
BOOK VALUE
BUSINESSES
CAPITAL ACCUMULATION
CAPITAL STOCK
CAPITAL TIMES
COMPARATIVE ANALYSIS
COMPUTERS
CONSTANT RETURNS
CONSTANT RETURNS TO SCALE
COUNTRY REGRESSIONS
CROSS COUNTRY
CUSTOMS
DATA ANALYSIS
DATA AVAILABILITY
DAY-TO-DAY OPERATIONS
DEPENDENT VARIABLE
DETERMINANTS OF GROWTH
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT INDICATORS
DISAGGREGATED LEVEL
DOMESTIC MARKETS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC LITERATURE
ECONOMIC PERFORMANCE
ECONOMIC STUDIES
ECONOMIC THEORY
ELASTICITY
ELECTRICITY
EMAILS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
ENTERPRISE SURVEY
ENTERPRISE SURVEYS
EQUIPMENT
ESP
ESTIMATION RESULTS
EXCHANGE RATE
EXPORT MARKETS
EXPORTS
EXTERNAL FACTORS
FACTOR ACCUMULATION
FACTOR PRICES
FACTORS OF PRODUCTION
FINANCIAL MARKETS
FOREIGN COMPETITION
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FUTURE RESEARCH
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GLOBAL ECONOMY
GLOBAL LEVEL
GLOBAL MARKETS
GROSS DOMESTIC PRODUCT
GROSS OUTPUT
GROSS VALUE
GROWTH ACCOUNTING
GROWTH ANALYSIS
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATE OF OUTPUT
GROWTH RATES
GROWTH REGRESSIONS
HUMAN CAPITAL
IMPROVING PRODUCTIVITY
INCOME
INCOME PER CAPITA
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INDUSTRY PRODUCTIVITY
INNOVATION
INSTITUTION
INTEREST RATES
INTERNAL FACTORS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTMENT CLIMATE
LABOR INPUT
LABOR REGULATIONS
LEGAL SYSTEM
LONG-TERM GROWTH
MACROECONOMIC GROWTH
MACROECONOMIC INSTABILITY
MANUFACTURING
MANUFACTURING INDUSTRIES
MARGINAL PRODUCT
MARKET ECONOMIES
MARKET IMPERFECTIONS
MARKET SHARE
MATERIAL
MONETARY ECONOMICS
MONOPOLY
NATURAL MONOPOLIES
NEW TECHNOLOGIES
OUTPUT GROWTH
OUTPUT RATIO
OUTPUTS
PERFORMANCES
POLICY CHANGES
POLICY IMPLICATIONS
POLICY MAKERS
POLICY REFORMS
POLICY RESEARCH
POLITICAL ECONOMY
POOR COUNTRIES
PRODUCTION FUNCTION
PRODUCTION FUNCTIONS
PRODUCTION PROCESS
PRODUCTIVITY
PRODUCTIVITY CHANGE
R&D
REGULATORY POLICY
RELATIVE CONTRIBUTION
RESULT
SIGNIFICANT CORRELATION
SIGNIFICANT FACTOR
STANDARD FORMAT
TECHNICAL CHANGE
TECHNICAL PROGRESS
TELECOMMUNICATIONS
TFP
TIME PERIOD
TOP MANAGEMENT
TOTAL FACTOR PRODUCTIVITY
TOTAL FACTOR PRODUCTIVITY GROWTH
TOTAL OUTPUT
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICIES
TRADE POLICY
TRADE VOLUMES
TURNOVER RATE
USES
VALUE ADDED
WEB
ABSOLUTE VALUE
AGGREGATE LEVEL
AGRICULTURE
ALLOCATIVE EFFICIENCY
AVERAGE GROWTH
AVERAGE GROWTH RATE
AVERAGE LEVEL
BANKRUPTCY
BEST PRACTICES
BOOK VALUE
BUSINESSES
CAPITAL ACCUMULATION
CAPITAL STOCK
CAPITAL TIMES
COMPARATIVE ANALYSIS
COMPUTERS
CONSTANT RETURNS
CONSTANT RETURNS TO SCALE
COUNTRY REGRESSIONS
CROSS COUNTRY
CUSTOMS
DATA ANALYSIS
DATA AVAILABILITY
DAY-TO-DAY OPERATIONS
DEPENDENT VARIABLE
DETERMINANTS OF GROWTH
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT INDICATORS
DISAGGREGATED LEVEL
DOMESTIC MARKETS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC LITERATURE
ECONOMIC PERFORMANCE
ECONOMIC STUDIES
ECONOMIC THEORY
ELASTICITY
ELECTRICITY
EMAILS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
ENTERPRISE SURVEY
ENTERPRISE SURVEYS
EQUIPMENT
ESP
ESTIMATION RESULTS
EXCHANGE RATE
EXPORT MARKETS
EXPORTS
EXTERNAL FACTORS
FACTOR ACCUMULATION
FACTOR PRICES
FACTORS OF PRODUCTION
FINANCIAL MARKETS
FOREIGN COMPETITION
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FUTURE RESEARCH
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GLOBAL ECONOMY
GLOBAL LEVEL
GLOBAL MARKETS
GROSS DOMESTIC PRODUCT
GROSS OUTPUT
GROSS VALUE
GROWTH ACCOUNTING
GROWTH ANALYSIS
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATE OF OUTPUT
GROWTH RATES
GROWTH REGRESSIONS
HUMAN CAPITAL
IMPROVING PRODUCTIVITY
INCOME
INCOME PER CAPITA
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INDUSTRY PRODUCTIVITY
INNOVATION
INSTITUTION
INTEREST RATES
INTERNAL FACTORS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTMENT CLIMATE
LABOR INPUT
LABOR REGULATIONS
LEGAL SYSTEM
LONG-TERM GROWTH
MACROECONOMIC GROWTH
MACROECONOMIC INSTABILITY
MANUFACTURING
MANUFACTURING INDUSTRIES
MARGINAL PRODUCT
MARKET ECONOMIES
MARKET IMPERFECTIONS
MARKET SHARE
MATERIAL
MONETARY ECONOMICS
MONOPOLY
NATURAL MONOPOLIES
NEW TECHNOLOGIES
OUTPUT GROWTH
OUTPUT RATIO
OUTPUTS
PERFORMANCES
POLICY CHANGES
POLICY IMPLICATIONS
POLICY MAKERS
POLICY REFORMS
POLICY RESEARCH
POLITICAL ECONOMY
POOR COUNTRIES
PRODUCTION FUNCTION
PRODUCTION FUNCTIONS
PRODUCTION PROCESS
PRODUCTIVITY
PRODUCTIVITY CHANGE
R&D
REGULATORY POLICY
RELATIVE CONTRIBUTION
RESULT
SIGNIFICANT CORRELATION
SIGNIFICANT FACTOR
STANDARD FORMAT
TECHNICAL CHANGE
TECHNICAL PROGRESS
TELECOMMUNICATIONS
TFP
TIME PERIOD
TOP MANAGEMENT
TOTAL FACTOR PRODUCTIVITY
TOTAL FACTOR PRODUCTIVITY GROWTH
TOTAL OUTPUT
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICIES
TRADE POLICY
TRADE VOLUMES
TURNOVER RATE
USES
VALUE ADDED
WEB
Bayraktar, Nihal
Nallari, Raj
Micro Efficiency and Macro Growth
description This paper is about micro foundations of productivity and growth. There are several studies on productivity for advanced economies but relatively few for developing countries. Using data from the investment climate surveys of the World Bank, estimation results from 45 developing countries, complemented by extended analysis at firm and industry levels for Brazil and India for the period 2002-05, indicate the following: (i) confirmation of the importance of total factor productivity at firm, industry and national levels, but total factor productivity progressively tapers off at each level of aggregation implying that there is a less than one-to-one relationship between micro-efficiency, sector growth, and macro growth; (ii) capital accumulation is more important at the macro level than the micro level; (iii) productivity at the micro level is driven by research and development, the capacity utilization rate, and adoption of foreign technology (all of which involve management decisions), and is negatively related to corruption and instability, tax, and financial regulations; and (iii) confirmation of the lower contribution of total factor productivity to output growth in developing countries than in developed economies. Management decisions are involved in a lot of day-to-day operations at the firm level and therefore management is an unmeasured input. In developing countries, at the firm level, there is a need to understand the contribution of quality of inputs (management quality, education and labor quality, training, experience of workers, use of computers at work) and also the role of external agglomeration (for example, location in a booming city, competitive pressures from new firms, trade competition, and regulations).
topic_facet ABSOLUTE VALUE
AGGREGATE LEVEL
AGRICULTURE
ALLOCATIVE EFFICIENCY
AVERAGE GROWTH
AVERAGE GROWTH RATE
AVERAGE LEVEL
BANKRUPTCY
BEST PRACTICES
BOOK VALUE
BUSINESSES
CAPITAL ACCUMULATION
CAPITAL STOCK
CAPITAL TIMES
COMPARATIVE ANALYSIS
COMPUTERS
CONSTANT RETURNS
CONSTANT RETURNS TO SCALE
COUNTRY REGRESSIONS
CROSS COUNTRY
CUSTOMS
DATA ANALYSIS
DATA AVAILABILITY
DAY-TO-DAY OPERATIONS
DEPENDENT VARIABLE
DETERMINANTS OF GROWTH
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT INDICATORS
DISAGGREGATED LEVEL
DOMESTIC MARKETS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC LITERATURE
ECONOMIC PERFORMANCE
ECONOMIC STUDIES
ECONOMIC THEORY
ELASTICITY
ELECTRICITY
EMAILS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
ENTERPRISE SURVEY
ENTERPRISE SURVEYS
EQUIPMENT
ESP
ESTIMATION RESULTS
EXCHANGE RATE
EXPORT MARKETS
EXPORTS
EXTERNAL FACTORS
FACTOR ACCUMULATION
FACTOR PRICES
FACTORS OF PRODUCTION
FINANCIAL MARKETS
FOREIGN COMPETITION
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FUTURE RESEARCH
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GLOBAL ECONOMY
GLOBAL LEVEL
GLOBAL MARKETS
GROSS DOMESTIC PRODUCT
GROSS OUTPUT
GROSS VALUE
GROWTH ACCOUNTING
GROWTH ANALYSIS
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATE OF OUTPUT
GROWTH RATES
GROWTH REGRESSIONS
HUMAN CAPITAL
IMPROVING PRODUCTIVITY
INCOME
INCOME PER CAPITA
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INDUSTRY PRODUCTIVITY
INNOVATION
INSTITUTION
INTEREST RATES
INTERNAL FACTORS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTMENT CLIMATE
LABOR INPUT
LABOR REGULATIONS
LEGAL SYSTEM
LONG-TERM GROWTH
MACROECONOMIC GROWTH
MACROECONOMIC INSTABILITY
MANUFACTURING
MANUFACTURING INDUSTRIES
MARGINAL PRODUCT
MARKET ECONOMIES
MARKET IMPERFECTIONS
MARKET SHARE
MATERIAL
MONETARY ECONOMICS
MONOPOLY
NATURAL MONOPOLIES
NEW TECHNOLOGIES
OUTPUT GROWTH
OUTPUT RATIO
OUTPUTS
PERFORMANCES
POLICY CHANGES
POLICY IMPLICATIONS
POLICY MAKERS
POLICY REFORMS
POLICY RESEARCH
POLITICAL ECONOMY
POOR COUNTRIES
PRODUCTION FUNCTION
PRODUCTION FUNCTIONS
PRODUCTION PROCESS
PRODUCTIVITY
PRODUCTIVITY CHANGE
R&D
REGULATORY POLICY
RELATIVE CONTRIBUTION
RESULT
SIGNIFICANT CORRELATION
SIGNIFICANT FACTOR
STANDARD FORMAT
TECHNICAL CHANGE
TECHNICAL PROGRESS
TELECOMMUNICATIONS
TFP
TIME PERIOD
TOP MANAGEMENT
TOTAL FACTOR PRODUCTIVITY
TOTAL FACTOR PRODUCTIVITY GROWTH
TOTAL OUTPUT
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICIES
TRADE POLICY
TRADE VOLUMES
TURNOVER RATE
USES
VALUE ADDED
WEB
author Bayraktar, Nihal
Nallari, Raj
author_facet Bayraktar, Nihal
Nallari, Raj
author_sort Bayraktar, Nihal
title Micro Efficiency and Macro Growth
title_short Micro Efficiency and Macro Growth
title_full Micro Efficiency and Macro Growth
title_fullStr Micro Efficiency and Macro Growth
title_full_unstemmed Micro Efficiency and Macro Growth
title_sort micro efficiency and macro growth
publishDate 2010-04-01
url http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100412113736
https://hdl.handle.net/10986/3754
work_keys_str_mv AT bayraktarnihal microefficiencyandmacrogrowth
AT nallariraj microefficiencyandmacrogrowth
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spelling dig-okr-1098637542024-08-08T16:09:21Z Micro Efficiency and Macro Growth Bayraktar, Nihal Nallari, Raj ABSOLUTE VALUE AGGREGATE LEVEL AGRICULTURE ALLOCATIVE EFFICIENCY AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANKRUPTCY BEST PRACTICES BOOK VALUE BUSINESSES CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL TIMES COMPARATIVE ANALYSIS COMPUTERS CONSTANT RETURNS CONSTANT RETURNS TO SCALE COUNTRY REGRESSIONS CROSS COUNTRY CUSTOMS DATA ANALYSIS DATA AVAILABILITY DAY-TO-DAY OPERATIONS DEPENDENT VARIABLE DETERMINANTS OF GROWTH DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DISAGGREGATED LEVEL DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC PERFORMANCE ECONOMIC STUDIES ECONOMIC THEORY ELASTICITY ELECTRICITY EMAILS EMPIRICAL EVIDENCE EMPIRICAL STUDIES EMPLOYMENT ENTERPRISE SURVEY ENTERPRISE SURVEYS EQUIPMENT ESP ESTIMATION RESULTS EXCHANGE RATE EXPORT MARKETS EXPORTS EXTERNAL FACTORS FACTOR ACCUMULATION FACTOR PRICES FACTORS OF PRODUCTION FINANCIAL MARKETS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FUTURE RESEARCH GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS GLOBAL ECONOMY GLOBAL LEVEL GLOBAL MARKETS GROSS DOMESTIC PRODUCT GROSS OUTPUT GROSS VALUE GROWTH ACCOUNTING GROWTH ANALYSIS GROWTH MODELS GROWTH PERFORMANCE GROWTH PROCESS GROWTH RATE GROWTH RATE OF OUTPUT GROWTH RATES GROWTH REGRESSIONS HUMAN CAPITAL IMPROVING PRODUCTIVITY INCOME INCOME PER CAPITA INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRY PRODUCTIVITY INNOVATION INSTITUTION INTEREST RATES INTERNAL FACTORS INTERNATIONAL STANDARDS INTERNATIONAL TRADE INVESTMENT CLIMATE LABOR INPUT LABOR REGULATIONS LEGAL SYSTEM LONG-TERM GROWTH MACROECONOMIC GROWTH MACROECONOMIC INSTABILITY MANUFACTURING MANUFACTURING INDUSTRIES MARGINAL PRODUCT MARKET ECONOMIES MARKET IMPERFECTIONS MARKET SHARE MATERIAL MONETARY ECONOMICS MONOPOLY NATURAL MONOPOLIES NEW TECHNOLOGIES OUTPUT GROWTH OUTPUT RATIO OUTPUTS PERFORMANCES POLICY CHANGES POLICY IMPLICATIONS POLICY MAKERS POLICY REFORMS POLICY RESEARCH POLITICAL ECONOMY POOR COUNTRIES PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION PROCESS PRODUCTIVITY PRODUCTIVITY CHANGE R&D REGULATORY POLICY RELATIVE CONTRIBUTION RESULT SIGNIFICANT CORRELATION SIGNIFICANT FACTOR STANDARD FORMAT TECHNICAL CHANGE TECHNICAL PROGRESS TELECOMMUNICATIONS TFP TIME PERIOD TOP MANAGEMENT TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TOTAL OUTPUT TRADE BARRIERS TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY TRADE VOLUMES TURNOVER RATE USES VALUE ADDED WEB This paper is about micro foundations of productivity and growth. There are several studies on productivity for advanced economies but relatively few for developing countries. Using data from the investment climate surveys of the World Bank, estimation results from 45 developing countries, complemented by extended analysis at firm and industry levels for Brazil and India for the period 2002-05, indicate the following: (i) confirmation of the importance of total factor productivity at firm, industry and national levels, but total factor productivity progressively tapers off at each level of aggregation implying that there is a less than one-to-one relationship between micro-efficiency, sector growth, and macro growth; (ii) capital accumulation is more important at the macro level than the micro level; (iii) productivity at the micro level is driven by research and development, the capacity utilization rate, and adoption of foreign technology (all of which involve management decisions), and is negatively related to corruption and instability, tax, and financial regulations; and (iii) confirmation of the lower contribution of total factor productivity to output growth in developing countries than in developed economies. Management decisions are involved in a lot of day-to-day operations at the firm level and therefore management is an unmeasured input. In developing countries, at the firm level, there is a need to understand the contribution of quality of inputs (management quality, education and labor quality, training, experience of workers, use of computers at work) and also the role of external agglomeration (for example, location in a booming city, competitive pressures from new firms, trade competition, and regulations). 2012-03-19T18:39:13Z 2012-03-19T18:39:13Z 2010-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100412113736 https://hdl.handle.net/10986/3754 English Policy Research working paper ; no. WPS 5267 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain