This paper studies the interaction between barriers to firm entry and distortions to allocative efficiency in a standard model of firm dynamics. We derive a strategy to infer entry barriers based on cross-country differences in the firm size distribution and idiosyncratic distortions. The inferred barriers resemble regulation-based indicators in advanced economies but are substantially higher in middle- and low-income countries. Regulation-based indicators cannot account for cross-country differences in average firm size and underestimate the aggregate productivity gains associated with their removal by up to 8 percent on average.
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Creative Commons Attribution 4.0 International (CC BY 4.0) License | https://creativecommons.org/licenses/by/4.0/ |
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AEA Data and Code Repository | https://www.openicpsr.org/openicpsr/aea |
x86 64-pc-linux-gnu (64-bit)
A readme file with detailed instructions is part of the (external) reproducibility package.
The data for this project is composed of the various firm-level databases, the Penn World Tables for aggregate data, the Doing Business Indicators for the regulation based barriers to entry, and the Small Business Administration for inferring the US’s distribution of firm shares across 2 digit industries. The firm level databases are composed of commercial, confidential, and publicly accessible sources. The commercial database is AMADEUS, which is developed by Bureau Van Dijk (van Dijk, 2018). These can be purchased from the developer or accessed through an affiliation with an institution with an active membership to the data. As explained in the data appendix of the article, the countries selected from AMADEUS for the analysis are: Bulgaria, Belgium, Finland, Portugal, Spain, Latvia, France, Hungary, Romania, and Italy. There are a number of firm-level censuses whose access is confidential, due to agreements between the corresponding statistical agencies and the World Bank. The firm-level Censuses in this category are: El Salvador (2005) , Kenya (2010) , Ethiopia (2010) , Ghana (2003) , Peru (2008) , Pakistan (2005) , Bangladesh (2012) , and Malaysia (2015) . The remaining firm-level datasets are freely accessible from the countries’ statistical agency websites.
Yes, please refer to the data statement and the readme file.
Author | Affiliation | |
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Roberto N. Fattal-Jaef | Development Research Group, Macroeconomics and Growth, The World Bank | rfattaljaef@gmail.com |
2022-04
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World | WLD |
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/the World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
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Creative Commons Attribution 4.0 International (CC BY 4.0) License | https://creativecommons.org/licenses/by/4.0/ |
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Krestel | CK | World Bank |
2023-06-30