Why Do Firms in Developing Countries Have Low Productivity

@article{Bloom2010WhyDF,
  title={Why Do Firms in Developing Countries Have Low Productivity},
  author={Nicholas Bloom and Aprajit Mahajan and David McKenzie and John P. Roberts},
  journal={The American Economic Review},
  year={2010},
  volume={100},
  pages={619-623}
}
The productivity of firms in developing countries appears to be extremely low. Prior work, such as that summarized in James Tybout (2000) and World Bank (2004), has highlighted a set of issues around infrastructure, informality, regulations, trade policies, and human capital that reduce the productivity of firms in developing countries. In this short article we want to focus instead on three other areas which recent research has emphasized: management practices, financial constraints and the… 

Tables from this paper

Financing of Firms in Developing Countries: Lessons from Research
This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as
Measuring Firm-Level Inefficiencies in the Ghanaian Manufacturing Sector
  • Andrea Szabó
  • Economics, Business
    Economic Development and Cultural Change
  • 2018
This paper measures firm-level inefficiencies in input use among manufacturing firms in Ghana by explicitly estimating their production function. I find that the fraction of undercapitalized firms is
Management Standard Certification and Firm Productivity: Micro-evidence from Africa
Using micro evidence from manufacturing and services firms located in 41 African countries, this paper shows that better management practice, reflected by international management certification,
A Cluster-Based Industrial Development Policy for Low-Income Countries
The need to construct an effective strategy for industrial development in low-income countries has been largely ignored by development economists because industrial policies have failed in many
INFORMATON, DEMAND AND THE GROWTH OF FIRMS: EVIDENCE FROM A NATURAL EXPERIMENT IN INDIA
In many developing countries, firms are on average small, do not grow and have low productivity. One potential contributing factor is firms’ limited effective market size: due to information and
Technology Licensing and Productivity Growth: Evidence from Manufacturing Firms in Developing Economies
Problem Definition: This study examines whether and how the relationship between technology licensing and productivity growth in the short run is affected by the challenges and constraints inherent
Industrial Policy, Firm Capabilities, and Kaizen
Management studies and economics are yielding new insights into the determinants of firm-level productivity. Therefore, industrial policy in low-income countries increasingly focuses on the firm.
Why Do Management Practices Differ across Firms and Countries
Economists have long puzzled over the astounding differences in productivity between firms and countries. In this paper, we present evidence on a possible explanation for persistent differences in
Bank Credit and Productivity: Evidence from Mexican Firms
Based on a survey of Mexican firms, this paper provides evidence of the positive effect of bank credit on firms' productivity. This effect is larger for those firms with access to bank credit and
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 31 REFERENCES
Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?
The manufacturing sectors of developing countries have traditionally been relatively protected. They have also been subject to heavy regulation, much of which has favored large firms. Accordingly, it
Recent advances in the empirics of organizational economics
We present a survey of recent contributions in the empirical organizational economics, focusing on management practices and decentralization. Productivity dispersion between firms and countries has
Financial and Legal Constraints to Growth: Does Firm Size Matter?
Using a unique firm-level survey database covering 54 countries, we investigate the effect of financial, legal, and corruption problems on firms' growth rates. Whether these factors constrain growth
Why Do Management Practices Differ Across Firms and Countries?
Economists have long puzzled over the astounding differences in productivity between firms and countries. For example, looking at disaggregated data on U.S. manufacturing industries, Syverson (2004a)
Cross-Country Differences in Productivity: The Role of Allocation and Selection
This paper combines different strands of the productivity literature to investigate the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. On the one hand, a growing body
The Organization of Firms Across Countries
We argue that social capital as proxied by regional trust and the Rule of Law can improve aggregate productivity through facilitating greater firm decentralization. We collect original data on the
World development report 2005: a better investment climate for everyone
Firms and entrepreneurs of all types-from micro-enterprises to multinationals-play a central role in growth and poverty reduction. Their investment decisions drive job creation, the availability and
Returns to Capital in Microenterprises: Evidence from a Field Experiment
Small and informal firms account for a large share of employment in developing countries. The rapid expansion of microfinance services is based on the belief that these firms have productive
...
1
2
3
4
...