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Structural Reforms and Firms’ Productivity: Evidence from Developing Countries

Author

Listed:
  • Wilfried A. Kouamé
  • Mr. Sampawende J Tapsoba
Abstract
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.

Suggested Citation

  • Wilfried A. Kouamé & Mr. Sampawende J Tapsoba, 2018. "Structural Reforms and Firms’ Productivity: Evidence from Developing Countries," IMF Working Papers 2018/063, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/063
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    Cited by:

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    2. Kwamivi Gomado, 2022. "Reigniting labour productivity growth in developing countries: Do structural reforms matter?," WIDER Working Paper Series wp-2022-87, World Institute for Development Economic Research (UNU-WIDER).
    3. Brendan Epstein & Alan Finkelstein Shapiro, 2021. "Increasing Domestic Financial Participation: Implications for Business Cycles and Labor Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 39, pages 128-145, January.
    4. Liu, Hongxun & Gao, Jinfeng & Tian, Peng & Ma, Xiaoming & Meng, Guanfei & Yang, Jingnan & Li, Zhi, 2023. "The impact of environmental regulation on productivity with co-production of goods and bads," Energy Economics, Elsevier, vol. 125(C).
    5. Guenette,Justin Damien, 2020. "Price Controls : Good Intentions, Bad Outcomes," Policy Research Working Paper Series 9212, The World Bank.
    6. Bambe, Bao-We-Wal & Combes, Jean-Louis & Kaba, Kabinet & Minea, Alexandru, 2024. "Inflation targeting and firm performance in developing countries," Journal of Economic Dynamics and Control, Elsevier, vol. 163(C).
    7. Konté,Maty & Kouame,Wilfried Anicet Kouakou & Mensah,Emmanuel Buadi, 2021. "Structural Reforms and Productivity Growth in Developing Countries : Intra- or Inter-Reallocation Channel ?," Policy Research Working Paper Series 9733, The World Bank.
    8. Nesma Ali & Boris Najman, 2019. "Cronyism, firms’ Productivity and Informal Competition in Egypt," Working Papers 1292, Economic Research Forum, revised 2019.
    9. Roman Fossati & Heiko Rachinger & Matheus Stivali, 2021. "Extent and potential determinants of resource misallocation: A cross‐sectional study for developing countries," The World Economy, Wiley Blackwell, vol. 44(5), pages 1338-1379, May.
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    More about this item

    Keywords

    WP; standard deviation; firm-level productivity; structural reform; productivity gain; Structural Reforms; Productivity; Developing countries; firm level; growth potential; firms benefit; productivity gains; firms' characteristic; Labor productivity; Business environment; Global; Middle East; East Asia; North Africa; Central Asia;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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