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Does Institutional Quality Impact Firm Performance? Evidence from Emerging and Transition Economies
| Content Provider | Semantic Scholar |
|---|---|
| Author | Bülow, Johan |
| Copyright Year | 2015 |
| Abstract | Using data on institutional quality from the QoG Expert Survey coordinated at the University of Gothenburg, and the Enterprise Survey collected by the World Bank, this paper draws inferences on the effect of better government institutions for the performance of 16,105 firms in 42 developing and transition countries. It is hypothesised that firms operating in economies with better government institutions will outperform firms in economies with weaker institutions, due to the assumed occurrence of economic opportunities that otherwise does not exist. Following Baumol’s theoretical predications, an empirical research stream studying the effect of the business environment on firm-level performance have emerged over the past decade. This stream e.g. associates better property rights institutions to positively influence the performance of firms. Previous work however fails to address the underlying cause of institutional quality. In this paper I therefore use a more comprehensive index of institutional quality to more accurately estimate the effects of policy weaknesses for firms’ in their daily operations. The results from the OLS regressions provide a tentative indication that government institutions exercising its power impartially indeed has a positive impact on firm productivity and growth. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://lup.lub.lu.se/luur/download?fileOId=8085337&func=downloadFile&recordOId=8085336 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |