Firms’ Productive Performance and the Investment Climate in Developing Economies : An Application to MENA Manufacturing

Drawing 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.

Bibliographic Details

Main Authors:	Kinda, Tidiane, Plane, Patrick, Veganzones-Varoudakis, Marie-Ange
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2009-03-01
Subjects:	ACCESS TO CREDIT, ADVERSE EFFECT, AFFILIATED ORGANIZATIONS, ALLOCATIVE EFFICIENCY, AVERAGE PRODUCTIVITY, AVERAGE WAGE, BARRIERS TO ENTRY, BEST PRACTICE, BUREAUCRACY, BUSINESS CLIMATE, CALCULATION, CALCULATIONS, CAPITALISM, COMPARATIVE ADVANTAGE, COMPARATIVE ANALYSIS, COMPARATIVE ECONOMICS, COMPETITIVE MARKETS, COMPETITIVENESS, CONSTANT RETURNS TO SCALE, CONTRIBUTION, CORPORATION, COST OF LABOR, CREDIT LINE, CURRENT MARKET RATE, DEPENDANT, DEVELOPMENT ECONOMICS, DIVERSIFICATION, ECONOMETRICS, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMIC RESEARCH, ECONOMICS, ELASTICITY, EXCHANGE RATE, EXCHANGE RATES, EXPORTS, EXTERNAL SHOCKS, EXTERNALITIES, FACTOR MARKETS, FACTORS OF PRODUCTION, FINANCIAL CONSTRAINTS, FINANCIAL ENVIRONMENT, FINANCIAL SECTOR, FINANCIAL SYSTEM, FOREIGN CAPITAL, FOREIGN FIRMS, FOREIGN INVESTORS, FOREIGN OWNERSHIP, GDP, GDP PER CAPITA, GENERAL PUBLIC, GOOD INVESTMENT CLIMATE, GOVERNMENT REGULATIONS, GROSS VALUE, HUMAN CAPITAL, INCOME, INCOMES, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDUSTRIALIZATION, INEFFICIENCY, INNOVATION, INSURANCE, INTERNATIONAL DEVELOPMENT, INTERNATIONAL FINANCE, INVESTMENT CLIMATE, INVESTMENT CLIMATE ASSESSMENT, INVESTMENT CLIMATE ASSESSMENTS, INVESTMENT CLIMATE CONSTRAINTS, INVESTMENT OPPORTUNITIES, INVESTMENT PERFORMANCES, INVESTMENT PROJECTS, JOB CREATION, LABOR COSTS, LABOR FORCE, LABOR PRODUCTIVITY, LABOR REGULATIONS, LABOR RELATIONS, LESS DEVELOPED COUNTRIES, LEVEL OF CONFIDENCE, LEVEL OF EDUCATION, MACROECONOMICS, MARGINAL COSTS, MARGINAL PRODUCTIVITY, MEDIUM ENTERPRISES, NATURAL RESOURCES, OPTIMIZATION, OUTPUTS, PERFECT COMPETITION, PERMANENT WORKERS, POLITICAL ECONOMY, POOR INVESTMENT, POSITIVE EXTERNALITIES, PRICE TAKERS, PRIVATE INVESTMENT, PRIVATE SECTOR, PRODUCTION COSTS, PRODUCTION FUNCTION, PRODUCTION FUNCTIONS, PRODUCTION INPUTS, PRODUCTIVITY, PROFITABILITY, PROFITABLE INVESTMENT, PROPERTY RIGHTS, PUBLIC ECONOMICS, PUBLIC EXPENDITURE, PUBLIC GOODS, PUBLIC INVESTMENT, QUESTIONNAIRE, REGULATORY FRAMEWORK, SALARIES, SALES, SKILLED LABOR, SMALL BUSINESSES, SPECIALIZATION, SUPPLIERS, TAX, TAX RATE, TAXATION, TELECOMMUNICATIONS, TOTAL COST, TOTAL FACTOR PRODUCTIVITY, TRADE POLICY, UNEMPLOYMENT, UNSKILLED WORKERS, VALUE ADDED, WAGES, WORK FORCE, WORLD MARKET, WORLD MARKETS, WORTH,
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_20090319085313 http://hdl.handle.net/10986/4064
Tags:	Add Tag No Tags, Be the first to tag this record!