Structural Reforms and Firms’ Productivity: Evidence from Developing Countries

By Wilfried A. Kouamé, Sampawende J Tapsoba

March 19, 2018

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Wilfried A. Kouamé, and Sampawende J Tapsoba. Structural Reforms and Firms’ Productivity: Evidence from Developing Countries, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper assesses the effects of structural reforms on firm-level productivity for 37 developing countries from 2006 to 2014 period. It takes advantage of the IMF Monitoring of Fund Arrangements dataset for reform indexes and the World Bank Enterprise Surveys for firm-level productivity. The paper highlights the following results. Structural reforms such as financial, fiscal, real sector, and trade reforms, significantly improve firm-level productivity. Interestingly, real sector reforms have the most sizeable effects on firm-level productivity. The relationship between structural reforms and firm-level productivity is nonlinear and shaped by some firms’ characteristics such as the financial access, the distortionary environment, and the size of firms. The pace of structural reforms matters since being a “strong reformer” is associated with a clear productivity dividend for firms. Finally, except for financial and trade reforms, all structural reforms under consideration are bilaterally complementary in improving firm-level productivity. These findings are robust to several sensitivity checks.

Subject: Business environment, Economic sectors, Fiscal policy, Labor productivity, Macrostructural analysis, Production, Productivity, Structural reforms

Keywords: Business environment, Central Asia, Developing countries, East Asia, Firm level, Firm-level productivity, Firms benefit, Firms' characteristic, Global, Growth potential, Labor productivity, Middle East, North Africa, Productivity, Productivity gain, Productivity gains, Standard deviation, Structural reform, Structural Reforms, WP

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/063
Stock No:

WPIEA2018063
ISBN:

9781484347003
ISSN:

1018-5941

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