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Firm-Level Productivity and Technical Efficiency in MENA Manufacturing Industry: The Role of the Investment Climate

Firm-Level Productivity and Technical Efficiency in MENA Manufacturing Industry: The Role of the Investment Climate

To estimate firm-level productivity, a population of almost 20,000 firms, coming from 13 manufacturing industries was initially considered. This sample had to be reduced due to various limitations particularly the lack of the production technology variables and the necessity of a cleaning up when figures proved to be poorly transmitted or recorded. Some industries as well had to be merged, due to insufficient observations. In fine, 12 414 enterprises (3073 for the MENA region) regrouped in eight industries were retained when estimating production frontiers (see Annex 2) 11 . As for inputs and output, investment climate (IC) variables are subject to measurement errors. In the surveys, some firms did not report the full range of investment climate measures. Other firms reported numbers that were not credible. This is also due to the fact that most of investment climate factors are qualitative variables of perception, thus allowing answers to vary depending on the firms, the regions or the countries. Our choice has been to keep as many firms as possible, providing sufficient information on a wide range of investment climate variables. Once outliers and incomplete observations are removed, 5002 observations were left, among which 1483 for the MENA region, what represent 34% of MENA initial population and 30% of the total number of enterprises with IC variables (see Annex 2) 12 . The IC variables considered here are the ones that we use to explain firms’ Technical Efficiency (TE) (see sections 5 and 6).
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Import Competition, Domestic Regulation and Firm-Level Productivity Growth in the OECD

Import Competition, Domestic Regulation and Firm-Level Productivity Growth in the OECD

Abstract This paper examines how import penetration affects firms’ productivity growth taking into account the heterogeneity in firms’ distance to the efficiency frontier and country differences in product market regulation. Using firm-level data for a substantial number of OECD countries from the late 1990s to late 2000s, the analysis reveals non-linear effects of both sectoral import penetration and de jure product market regulation measures depending on firms’ positions along the global distribution of productivity levels. A magnifying effect is found between import penetration and domestic barriers to entry, conditional on a firm’s distance to the technological frontier. The heterogeneous effects of international competition and domestic product market regulation on firm-level productivity growth are consistent with a neo-Schumpeterian view of trade and regulation. Close to the technology frontier, import competition has a strongly positive effect on firm-level productivity growth, with stringent domestic regulation reducing this effect substantially. However, far from the frontier, neither import competition nor its interaction with domestic regulation has a statistically significant effect on firm-level productivity growth. The results also suggest that insufficient attention has been made in the trade literature to within-firm productivity growth.
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Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence

Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence

Our results confirm that improving infrastructure quality (Infra), access to financing (Fin), use of information and communication technologies (ICT), skills and expertise of the labor force (H), and to a lesser extent, government relations (Gov), competition (Comp), security and political stability (CrimePol) are important factors in firm performance. This finding shows that, in the global economy where technology diffuses rapidly, and capital is mobile, the persistence of firm-level productivity differences between countries can be explained by differences in the business environment. This conclusion is important for developing economies, where the deficiencies of the investment climate can explain why firm-level productivity often lags behind. In addition, our empirical work highlights the productive role of firms' foreign exposure through, in particular, exporting (Export), foreign participation in capital (Foreign), quality certification (Cert), and foreign licensed technology (Lic). As for policy implications, our findings are useful to show what determinants of productivity cause producers to be better performers, and where reform should be targeted to have the greatest impact on productivity. Building on these dimensions would have a large payoff for the productivity and the competitiveness of the manufacturing industry as a whole. This factor should be kept in mind when dealing with the reform agenda of many developing countries, where the deficiencies appear high in some dimensions of the investment climate. Enhancement of these dimensions would contribute to catching up with emerging and more developed economies.
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Innovation, productivity, exports and the investment climate: A study based on Indian manufacturing firm-level data

Innovation, productivity, exports and the investment climate: A study based on Indian manufacturing firm-level data

Innovation thus is central to export, as Indian innovative firms self-select themselves into exporting. Innovation seems important for productivity as well, as it would increase firm-level TFP. These findings are all the more significant in the context of low exports and low productivity of the Indian manufacturing sector (Mitra et al., 2002 and 2014). Helping the Indian manufacturing firms to innovate (in the broad sense of the Oslo Manual) would certainly participate in the effort of the government to make this sector more productive and more integrated into the world economy. As shown by our results, this could pass by an increased access to training, R&D and foreign licences, as well as through competition and the improvement of the investment climate, all these actions being part of the National Manufacturing Policy program and the Make in India campaign. This would also be important for the Indian manufacturing firm-level productive performances since our results highlight a learning process when exporting. Firm-level productivity would thus be even more enabled if export rates were increased.
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Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence

Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence

Our results confirm that improving infrastructure quality (Infra), access to financing (Fin), use of information and communication technologies (ICT), skills and expertise of the labor force (H), and to a lesser extent, government relations (Gov), competition (Comp), security and political stability (CrimePol) are important factors in firm performance. This finding shows that, in the global economy where technology diffuses rapidly, and capital is mobile, the persistence of firm-level productivity differences between countries can be explained by differences in the business environment. This conclusion is important for developing economies, where the deficiencies of the investment climate can explain why firm-level productivity often lags behind. In addition, our empirical work highlights the productive role of firms' foreign exposure through, in particular, exporting (Export), foreign participation in capital (Foreign), quality certification (Cert), and foreign licensed technology (Lic). As for policy implications, our findings are useful to show what determinants of productivity cause producers to be better performers, and where reform should be targeted to have the greatest impact on productivity. Building on these dimensions would have a large payoff for the productivity and the competitiveness of the manufacturing industry as a whole. This factor should be kept in mind when dealing with the reform agenda of many developing countries, where the deficiencies appear high in some dimensions of the investment climate. Enhancement of these dimensions would contribute to catching up with emerging and more developed economies.
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Firm growth and productivity growth: evidence from a panel VAR

Firm growth and productivity growth: evidence from a panel VAR

For Peer Review indeed a multifaceted phenomenon, with each indicator of firm growth (such as employ- ment or sales) having its drawbacks. In this study we include several indicators of firm growth and explore their specific roles in the process of firm-level productivity growth. Third, we explore the robustness of our results along a number of dimensions, concerning the number of lags in our regression specification and the choice of productivity growth indicator. In addition, we repeat our analysis at a disaggregated (sectoral) level to in- vestigate how productivity dynamics vary across heterogeneous industries. Fourth, while previous work has invariably focused on ‘the average effect for the average firm’, we apply semi-parametric quantile regression techniques to investigate how the relationship between firm growth and productivity growth varies for growing and declining firms.
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Firm growth and productivity growth : evidence from a panel VAR

Firm growth and productivity growth : evidence from a panel VAR

Previous research into the link between productivity growth has come up against a number of limitations, however, which motivates the present investigation. First, almost all of the studies reviewed above focus only on contemporaneous associations of productivity growth, and there- fore neglect any dynamic considerations (i.e. time lags) affecting the relationship between firm growth and productivity growth. Second, firm growth is indeed a multifaceted phenomenon, with each indicator of firm growth (such as employment or sales) having its drawbacks. In this study we include several indicators of firm growth and explore their specific roles in the process of firm-level productivity growth. Third, we explore the robustness of our results along a number of dimensions, concerning the number of lags in our regression specification and the choice of productivity growth indicator. In addition, we repeat our analysis at a disaggregated (sectoral) level to investigate how productivity dynamics vary across heterogeneous industries. Fourth, while previous work has invariably focused on ‘the average effect for the average firm’, we apply semi-parametric quantile regression techniques to investigate how the relationship between firm growth and productivity growth varies for growing and declining firms.
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Essays in international economics : firm heterogeneity, aggregate productivity and misallocation

Essays in international economics : firm heterogeneity, aggregate productivity and misallocation

In India, differences in institutional and regulatory framework are found to be key drivers of the disparities of resource misallocation and productivity growth across states. Besley and Burgess (2004); Gupta et al. (2008) and Kapoor (2015) presented a large heterogeneity of firms’ output performance across Indian states, which are likely driven by state-specific labor and product market regulations, financial development and investment in infrastructure. Dougherty et al. (2011)u focused on firm-level productivity across Indian states and found that firms in labor-intensive industries located in states with flexible labor markets have higher productivity than those in states with more stringent labor laws. Dougherty et al. (2014) analyzed productivity effects of deregulation related to state-level variation in policy across Indian states and found firms would benefit substantially through gains in total factor productivity growth in states with higher levels of pro-employer reform. In addition, Chatterjee (2011) extended Hsieh and Klenow (2009)’s methodology to analyze the linkages and key drivers of resource misallocation and productivity in Indian manufacturing. She found distortionary policies including firm-size tax distortions, strict labor laws, as well as shortage of capital and limited access to intermediate inputs contributed to misallocation across Indian manufacturing firms.
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Firm Level Allocative Inefficiency: Evidence from France

Firm Level Allocative Inefficiency: Evidence from France

Abstract A large portion of productivity differentials among locations is related to density. Firms located in denser areas are more productive due to agglomeration economies (Combes et al., 2012). We provide in this paper an explanation of such economies: lower input misallocation. The distribution of resources among heterogeneous firms has relevant consequences on allocative efficiency and denser areas provide a more favorable environment for dynamic matching between employers and employees. Using a methodology proposed by Petrin and Sivadasan (2013) we are able to assess the degree of resource misallocation among firms within sectors for each of the 96 French "Départements". Based on firm-level productivity estimates, we identify in the gap between the value of the marginal product and marginal input price the output loss due to inefficiencies in inputs allocation. Over the period 1993- 2007 the average gap at firm level is around 10 thousands euro, showing a relevant increase starting from the early 2000s. Importantly, firms misallocations are lower in denser areas, suggesting that the matching mechanism is playing a role in explaining the productivity premium of agglomerated locations.
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Distant but close in sight. Firm-level evidence on french-german productivity gaps in manufacturing

Distant but close in sight. Firm-level evidence on french-german productivity gaps in manufacturing

Cross-country studies of productivity have flourished in the last years, thanks to the increasing availability of firm level datasets. Empirical research employing such databases has opened new perspectives in productivity analysis that simply could not be obtained with aggregate statistics (see e.g. Bartelsman and Doms, 2000; Bartelsman et al., 2013; Force, 2014; Dosi et al., 2015; Syverson, 2011). It has also delivered fundamental insights about the key impact of firm heterogeneity and of market selection in determining aggregate productivity and differences in competitiveness among countries. A typical challenge when working with firm data is that a comparison across countries is quite difficult, because data collected by different countries comes with different definitions of variables, firms, not to mention different currencies. A further impediment is represented by confidentiality restrictions, which may affect the characteristics of the samples used in each country and thus undermine the representativeness of comparative analyses performed on them. To this, one must add that firm level productivity analyses are sensitive to the procedure used to estimate productivity, especially when total factor productivity metrics are concerned (Bartelsman and Wolf, 2018).
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Regulation and trade in development : explaining productivity at the firm level

Regulation and trade in development : explaining productivity at the firm level

Import competition, domestic regulation and firm-level productivity growth 15 3 Empirical analysis of firm-level productivity 3.1 The effect of competition Competition may stem from both foreign as well as domestic sources, which we take into account by differentiating the two. Our methodology assumes that increased import shares are equivalent to an increase in competition within a narrowly defined industry and that this increase is exogenous to the productivity growth of an individual firm. Several studies document that increased imports amount to tougher competition: for instance, Katics and Petersen (1994) find that it is associated with reduced price-cost margins using industry-level data for the United States. Recent empirical studies, including Aghion et al. (2009), Bas and Strauss-Kahn (2011), Fernandez (2007) and Pavcnik (2002), use import shares as measures of competition from trade, while Kletzer (2002) discusses assumptions necessary for this approach to be valid. Using a more structural approach, Chen et al. (2009) find that import penetration has a boosting effect on industry average productivity, supporting the pro-competitive effect of trade predicted by the theoretical model of Melitz and Ottaviano (2008).
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Financial Factors and the Margins of Trade: Evidence from Cross-Country Firm-Level Data

Financial Factors and the Margins of Trade: Evidence from Cross-Country Firm-Level Data

activities. At the time of entry, exporters do not seem to be financially healthier than domestic produc- ers. On the contrary, Forlani (2008) has found exporting probability to be negatively and significantly affected by financial constraints on a panel of Italian firms. We focus here on developing countries, in which financial constraints may be much stronger and more binding; more importantly, we depart from these previous works by studying both margins of trade, by considering the possible interaction between productivity and access to finance, and the impact of financial development at the micro level. This paper contributes to the existing literature at various levels. First by improving the under- standing of the relationship between firms’ financial constraints and trade at the firm level. Second, by providing micro evidence of the role of financial development on trade. Third, our results support the view of fixed costs as an important feature of international trade, especially in presence of financial market imperfections. The joint consideration of the extensive and intensive margins of trade is thus especially important for the understanding of trade flows, and for the study of the impact of aggregate shocks (in particular monetary shocks) on trade and macroeconomic adjustment.
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Design Productivity of a High Level Synthesis Compiler versus HDL

Design Productivity of a High Level Synthesis Compiler versus HDL

As the CAPH language is not mainstream like the VHDL language, details on the syntax and semantics are given in this section. The behavior of individual actors in CAPH is specified using a set of transition rules, where a rule consists of a set of patterns, involving inputs and local variables, and a set of expressions, describing modifications of outputs and local variables. Tokens circulating on channels and manipulated by actors are either data tokens (carrying actual values, such as pixels for example) or control tokens (acting as structuring delimiters). With this approach, fine grain processing (down to the pixel level) is expressed without global control or synchronization.
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The relationship between trade credit, bank credit and financial structure : from firm-level non-linearities to financial development heterogeneity. A study on MENA firm-level data

The relationship between trade credit, bank credit and financial structure : from firm-level non-linearities to financial development heterogeneity. A study on MENA firm-level data

However, the age of the firm does now significantly and negatively influence the volume of trade credit raised. This is consistent with the idea that the reputation a company acquires with age relaxes the financial constraint on it, mainly due to fewer problems of information asymmetry between lenders and borrowers. Therefore, this reputation effect works in a reverse way to the one stated for the probability of asking for trade credit: being older helps to get into the “trade credit market”, but at the same time decreases your need for it. Whereas it was previously not significant, the size of the firm now significantly and positively influences the demand for trade credit. This can be interpreted in terms of volume of business: the bigger the firm, the more contact is has with a large number of suppliers from which it obtains special payment terms. When introduced, the quadratic term proves to be significant and negative: this supports the existence of a non-linear relationship, similar to the one highlighted for our indicators of financial health. Once the firm has become big enough, her need for trade credit reduces, since she can more easily collateralize some bank credit.
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The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data

The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data

A simple way to investigate this question is to test the impact of regulations on an explicit proxy for the fixed cost of exporting to each destination country. As in our generalized Tobit estimation, we use the minimum export value to a destination market observed in our data as a proxy for the fixed cost of exporting to this market. In Table (4), we regress this proxy on our measure of regulations, controlling for distance and local demand. Observations are at the country×year level, which leaves us with 66 observations. To assess the robustness of our results and avoid measurement errors, we use three alternative proxies for the fixed cost. The first line (Min 1) takes the minimum export value observed in each destination mar- ket. The second and third lines (Min 2 and Min 3) take the average of the two smallest export flows, in order to alleviate the consequences of misreporting trade flows or exception- ally low values of exports by some firms. 37 In the second line (Min 2), we restrict our sample to firms which only export services. We saw in the previous section that firms which export goods are less sensitive to regulations than firms that do not. Therefore, a small export value can be driven by the fact that the firm also exports goods to the same market. In the third line (Min 3), we further limit a possible bias due to the presence of firms that export to so many countries that they enjoy the benefits of economies of scope in complying with market regulations. We focus on small firms only, restricting the sample to firms which export on aggregate less than the median firm.
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A Study of Metrics and Measures to Measure Innovation at Firm Level & at National Level

A Study of Metrics and Measures to Measure Innovation at Firm Level & at National Level

Computing Aggregate Innovative Indices Though this approach is used mainly for national level as discussed later in the paper, it is also used at the firm level (Stone et al, 2008). Eg. Porter’s Diamond Cluster Model attempts to explain the process of innovation as it occurs within individual firms (Porter 1998) and Skandia Navigator links inputs such as human and organizational capital with outputs such as innovative products, market share, and profits.

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Assessing spillovers from universities to firms: evidence from French firm-level data

Assessing spillovers from universities to firms: evidence from French firm-level data

reason to believe that all innovative firms use the same information sources at the same intensity level. Indeed, the origin of spillovers could in principle differ according to the nature of the innovation. We find that most benefits from contacts with universities and public research organizations come from formal collaboration. On the one hand, there is little evidence of direct spillovers from universities and, anyway, that they are much smaller than spillovers from customers and suppliers. Moreover, we find evidence that these spillovers are strongest among firms that imitate existing technologies. On the other hand, we find convincing evidence that formal cooperation with foreign universities can be associated with highly innovative firms. Our results contribute to the literature on the effect of universities on R&D and innovation. First, we improve on the study of Cohen and Walsh (2000) and Cohen et al. (2002) by making an explicit distinction between market and non-market information flows. Moreover, our survey includes a more detailed list of inter-industry information and collaboration sources. Our findings are also similar to those presented in the geographical study of Mowery and Ziedonis (2001). Again we do not rely on proxies for spillovers and knowledge flows through market mechanisms. In addition, we make a distinction between weakly and highly innovative firms. We find that formal collaborations with universities are not geographically confined, supporting arguments advanced by Audretsch and Stephan (1996).
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Advancing digital frontiers in African economies: lessons learned from firm-level innovations

Advancing digital frontiers in African economies: lessons learned from firm-level innovations

Lumos Global is one such firm that provides off-grid electricity services to households and MSMEs in multiple SSA countries through provision of solar home systems (SHSs) to a variety of business and individual clients. The firm’s off-grid solution to electricity access effectively leapfrogs missing or incomplete electricity infrastructure, increasing rates of electricity access in the communities where the firm operates. Lumos Global’s model combines solar energy technology with mobile payments and financing provided through existing cellular network providers, taking advantage of the relatively high rates of mobile penetration in many rural, off-grid communities where electricity demand is high. The SHS is small enough to fit in a box, making it easy to transport on foot or by bicycle, and includes a solar panel activated by text message with sufficient capacity to charge small appliances such as mobile phones, laptop computers, electric fans, radios, and lights for a household or a business (Orpaz, 2013; USAID, 2016). Customers are required to make a 40 USD initial down payment, a 12 USD installation fee, and incremental payments of 0.50 USD per day or 3 USD per week over a period of five years until they have completely paid off the package and the SHS is unlocked (Clowes, 2019; Orpaz, 2013). In this sense, Lumos Global uses a pay-as-you-go (PAYG), lease-to-own financial model (Roach & Cohen, 2016). The capacity of the SHS is sufficient to power homes, small businesses, hospitals, schools, mosques, and churches (Roach & Cohen, 2016). Lumos has opted to use airtime credit payments instead of traditional mobile money payments to increase its penetration into markets and communities where MM access is limited. This is a simple, easy-to-use payment mechanism for customers, but it requires a much more complex technology integration on the back end than does mobile money (Roach & Cohen, 2016). Customers top up their phones with sufficient funds to pay for the service bundle of their choosing.
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Vertical ownership and export performance : firm-level evidence from France

Vertical ownership and export performance : firm-level evidence from France

5 Conclusion In this paper, we have analyzed theoretically and empirically the impact of acquiring an inter- mediary on export decisions and export sales at the firm level. We have developed a general model with two vertically related industries in which heterogeneous manufacturers produce a differentiated product distributed by intermediaries and where manufacturers and intermedi- aries may be linked by financial arrangements (vertical ownership). In this paper, we have identified the existence of an "intermediary premium", defined as the export performance gap between firms owning a distribution network and the firms with no financial participation in an intermediary. We have showed that manufacturers that own an intermediary are more likely to serve countries with small potential markets than non-acquiring firms. In addition, because only more productive or larger firms are able to acquire equity shares in an intermediary, this in- duces a negative market externality among manufacturers due to a reallocation of market shares from small firms to large firms. Hence, by controlling an intermediary, large firms enjoy higher foreign demands and hurt small firms that lose market shares or exit from foreign markets. The results call for two comments. The first comment addresses the concentration of interme- diaries in destination markets. In Europe, as in many developed countries, concentration in the distribution sector is at play. This fact should impact our results. Extension of our model shows that the higher the concentration of the distribution sector in a destination country, the higher is the market share of firms owning or controlling intermediaries. Once again, the need for bet- ter understanding and measurement of the concentration process at play should be performed. This could help public authorities to support some exporters in specific sectors to maintain their foreign sales.
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FDI and credit constraints : firm level evidence in China

FDI and credit constraints : firm level evidence in China

The next step is to perform the Davidson-McKinnon test, which tests for the endogeneity of the market access indicator in a regression estimated with IV. 33 Both test statistics are reported in the last four lines of the estimation table. Since the Davidson-McKinnon test does not reject the null hypothesis of exogeneity of the market access (at the 10% confidence level), we report OLS estimates since they are more efficient than IV estimates (Pagan, 1984). Finally, in order to ensure that our standard errors are free form any bias due to autocorrelation, we also rerun each regression using the Newey-West correction for autocorrelation and heteroskedas- ticity. The degrees of significance of this alternative set of results is very similar to the ones presented below, excepted two cases which will be subsequently discussed (cf. infra, discussion on Table 2, column (4) and on Table 3, column (3)).
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