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Investment Climate and the Microeconomics of Growth

The research aims to understand the firm-level behavior underlying aggregate investment, employment, productivity, and growth. Understanding the incentives and constraints facing individual actors provides insights into the efficacy of different growth strategies and helps explain the heterogeneous responses to policies. The approach also highlights the distributional impact of the investment climate in which firms operate and the relative contributions of different types of firms to aggregate performance. Research covers two broad areas:

  • Investment climate looks at how regulations, access to finance and infrastructure, governance and property rights explain firms’ growth, productivity, innovation and investment. Research also examines the distributional impact of investment climate conditions across types of firms (e.g. by size, age, or sector). Much of this work exploits the Enterprise Surveys collected by the World Bank, now covering over 70,000 firms in 100 countries ( Now that panel data is available, work is being done to evaluate how reforms affect changes in performance, which policy areas matter most for growth, and the implications for the prioritization and sequencing of reforms.
  • Microeconomics of growth focuses on the microeconomic dynamics underlying macroeconomic performance. Evidence shows that productivity gains account for the bulk of long-term growth in per capita income. Economywide productivity growth reflects entry, exit and the reallocation of existing and new resources across microeconomic units of heterogeneous efficiency. Research examines the scope, speed and efficiency of resource reallocation across the economy, and assesses policies and other factors shaping them.

Policy Research Working Papers 

For more policy research working papers from the World Bank's institutional archives, search here using author’s last name, title or working paper number (“wpsxxxx”).

WPS6244Heterogeneity in subjective wellbeing : an application to occupational allocation in AfricaFalco, Paolo; Maloney, William F.; Rijkers, Bob; Sarrias, Mauricio2012/10
WPS6187The persistence of (subnational) fortune : geography, agglomeration, and institutions in the new worldMaloney, William F.; Caicedo, Felipe Valencia2012/09
WPS6066Gender and rural non-farm entrepreneurshipRijkers, Bob; Costa, Rita2012/05
WPS5789Ladies first ? firm-level evidence on the labor impacts of the East Asian crisisHallward-Driemeier, Mary; Rijkers, Bob; Waxman, Andrew2011/09
WPS5321Deals versus rules : policy implementation uncertainty and why firms hate itHallward-Driemeier, Mary; Khun-Jush, Gita; Pritchett, Lant2010/05
WPS5218The impact of the investment climate on employment growth : does Sub-Saharan Africa mirror other low-income regions ?Aterido, Reyes; Hallward-Driemeier, Mary2010/02
WPS5085Creative destruction and policy reforms : changing productivity effects of firm turnover in Moroccan manufacturingHallward-Driemeier, Mary; Thompson, Fraser2009/10
WPS5106Mind the neighbors : the impact of productivity and location on firm turnoverHallward-Driemeier, Mary; Thompson, Fraser2009/10
WPS5084Who survives ? the impact of corruption, competition and property rights across firmsHallward-Driemeier, Mary2009/10
WPS5054Comparing Apples with....Apples : how to make (more) sense of subjective rankings of constraints to businessHallward-Driemeier, Mary; Aterido, Reyes2009/09
WPS5032Big constraints to small firms' growth ? business environment and employment growth across firmsAterido, Reyes; Hallward-Driemeier, Mary; Pages, Carmen2009/08
WPS4888Informality in Latin America and the CaribbeanLoayza, Norman V.; Serven, Luis; Sugawara, Naotaka2009/03
WPS4834Foreign informational lobbying can enhance tourism : evidence from the CaribbeanGawande, Kishore; Maloney, William; Montes Rojas, Gabriel V.2009/02
WPS4649Bank involvement with SMEs : beyond relationship lendingde la Torre, Augusto; Martinez Peria, Maria Soledad; Schmukler , Sergio L.2008/06
WPS4476Informality among formal firms : firm-level, cross-country evidence on tax compliance and access to creditGatti, Roberta ; Honorati, Maddalena2008/01
WPS4356Corruption, business environment, and small business fixed investment in IndiaHonorati, Maddalena; Mengistae, Taye2007/09
WPS4338Corruption, the business environment, and small business growth in IndiaHonorati, Maddalena; Mengistae, Taye2007/08
WPS4326Innovative experiences in access to finance : market friendly roles for the visible hand ?de la Torre, Augusto; Gozzi, Juan Carlos; Schmukler, Sergio L.2007/08
WPS4168Mobility and earnings in Ethiopia's urban labor markets, 1994-2004Bigsten, Arne; Mengistae, Taye; Shimeles, Abebe2007/03
WPS4089The structural determinants of external vulnerabilityLoayza, Norman V.; Raddatz, Claudio2006/12
WPS3942Market access, supplier access, and Africa's manufactured exports : an analysis of the role of geography and institutionsElbadawi, Ibrahim; Mengistae, Taye; Zeufack, Albert2006/06
WPS3675Business environment, clustering, and industry location : evidence from Indian citiesLall, Somik V.; Mengistae, Taye2005/08
WPS3664The impact of business environment and economic geography on plant-level productivity : an analysis of Indian industryLall, Somik V.; Mengistae, Taye2005/07
WPS3623The impact of regulation on growth and informality - cross-country evidenceLoayza, Norman V.; Oviedo, Ana Maria; Serven, Luis2005/05
WPS3469Regulation and macroeconomic performanceLoayza, Norman V.; Oviedo, Ana Maria; Serven, Luis2005/01
33664Enhancing the competitiveness of Kenya's manufacturing sector: the role of the investment climateBlattman, Christopher; Cotton, Linda; Desai, Vyjayanti; Elbadawi, Ibrahim; Habyarimana, James; Marchat, Jean Michel; Ramachandran, Vijaya; Shah, Manju Kedia; Ajayi, Kehnide; Kimuyu, Peter; Ngugi, Rose; Bigsten, Arne; Soderbom, Mans2004/11
31351How do investment climate conditions vary across countries, regions and types of firms?Hallward-Driemeier, Mary; Stewart, David2004/09
WPS3323Investment climate and international integrationDollar, David; Hallward-Driemeier, Mary; Mengistae, Taye2004/06
WPS3003The investment climate and the firm : firm-level evidence from ChinaHallward-Driemeier, Mary*Wallsten, Scott*Xu,L. C2003/03
WPS2910Boondoogles and expropriation : rent-sseking and policy distortion when property rights are insecureKeefer, Philip; Knack, Stephen2002/10
31797Competitiveness of Indian manufacturing : Results from a firm-level surveyGoswami, Omkar; Arun, A. K.; Gantakolla, Srivastava; More, Vishal; Mookherjee, Arindam; Dollar, David; Mengistae, Taye; Hallward-Driemier, Mary; Iarossi, Giuseppe2002/01
27057Openness, firms, and competitionMary Hallward-Driemeier2001/06
WPS2515Firm-level survey provides data on Asia's corporate crisis and recoveryHallward-Driemeier, Mary2001/01

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