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  • Washington, D.C : The World Bank  (48)
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  • 1
    Language: English
    Pages: Online-Ressource (33 p)
    Edition: 2013 World Bank eLibrary
    Parallel Title: Iacovone, Leonardo Stunted Growth
    Abstract: Many countries in Africa suffer high rates of underemployment or low rates of productive employment; many also anticipate large numbers of people to enter the workforce in the near future. This paper asks the question: Are African firms creating fewer jobs than those located elsewhere? And, if so, why? One reason may be that weak business environments slow the growth of firms and distort the allocation of resources away from better-performing firms, hence reducing their potential for job creation. The paper uses data from 41,000 firms across 119 countries to examine the drivers of firm growth, with a special focus on African firms. African firms, at any age, tend to be 20-24 percent smaller than firms in other regions of the world. The poor business environment, driven by limited access to finance, and the lack of availability of electricity, land, and unskilled labor have some value in explaining this difference. Foreign ownership, the export status of the firm, and the size of the market are also significant determinants of firm size. However, even after controlling for the business environment and for characteristics of firms and markets, about 60 percent of the size gap between African and non-African firms remains unexplained
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  • 2
    Language: English
    Pages: 1 Online-Ressource (40 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Hernandez T., Leonardo Firm Financing in Chile after the 2014-15 Tax Reform: Debt or Equity?
    Abstract: This paper analyzes the effects of the 2014-15 Chilean tax reform on firms' incentives to retain earnings and finance their operations with equity versus debt. The analysis comprises a comparison with the situation of the pre-reform period, and draws some conclusions about firms' valuation. The approach consists of analyzing the effects of the tax reform on total taxes paid and cash flows received by investors. Although the final effects are specific to the firm and investor, as they depend on the firm's dividend payout ratio and each investor's personal income tax rate, the results show that in general the reform reduced the value of firms and lessened the incentives to retain earnings. The simulations show that the majority of firms would choose the accrual or "attributed" tax-based system. However, if the latter is not permitted, firms will choose debt over equity. The cash-based or semi-integrated system becomes the preferred option only when elusion (or tax avoidance) is possible
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  • 3
    Language: English
    Pages: 1 Online-Ressource (67 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Bursztyn, Leonardo Status Goods: Experimental Evidence from Platinum Credit Cards
    Abstract: This paper provides novel evidence on status goods, using a series of field experiments with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, the paper shows that demand for the platinum card greatly exceeds demand for a nondescript control product with identical benefits, suggesting demand for the pure status aspect of the card. Transaction data reveal that platinum cards are more likely to be used in social contexts, implying social image motivations. Combining price variation with information on the use of the card sheds light on the magnitude of the demand for social status. A second experiment provides evidence of positional externalities from the consumption of these status goods. The final experiment shows that increasing self-esteem causally reduces demand for status goods. This suggests that part of the demand for status is psychological in nature, and that social image is a substitute for self-image
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  • 4
    Language: English
    Pages: 1 Online-Ressource (45 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Iacovone, Leonardo Competition Makes IT Better : Evidence on When Firms Use IT More Effectively
    Abstract: This paper uses a unique firm-level data set for Mexico, with information never used for research before, to assess how use of information technology (IT henceforth) influences firm performance. Further, the paper explores if, in the context of increasing competition from China, this effect is different for firms more strongly affected by competition where incentives for upgrading and innovation may be more intense. In this perspective, the paper analyzes the complementarity between IT and other changes spurred by competition, taking advantage of the exogenous shock generated by Chinese competition. The results indicate that IT use has higher effects over productivity in the case of firms facing higher competition from China, in the domestic market and in the U.S. market. Furthermore, the paper shows how these changes appear to be driven by complementary investments in innovation and organizational changes
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  • 5
    Language: English
    Pages: 1 Online-Ressource (26 pages)
    Parallel Title: Erscheint auch als Print Version: Baccini, Leonardo Global Value Chains and Deep Integration
    Abstract: How does trade affect the design of preferential trade agreements (PTAs)? What is the role of global value chains (GVCs)? The authors answer these questions by empirically investigating the causal impact of gross and value-added trade on the depth of PTAs. To solve the critical issue of endogeneity of trade flows for trade policy, the identification strategy exploits a recent transportation shock: the sharp increase in the maximum size of container ships, which has more than tripled between 1995 and 2007. The key variation in our instrument hinges on the fact that only deep-water ports can accommodate new larger ships. The strategy is flexible enough to generate excludable instruments for different value-added components of exports. This allows us to assess how the design (depth) of PTAs is affected not only by gross exports but more specifically by GVC-trade as captured by indicators of trade in domestic and foreign value added. The authors find that trade occurring through GVCs increases the probability of forming deep PTAs, id est, agreements that include provisions that go beyond the coverage of the WTO. These GVC-trade effects are larger than those of gross exports, which include flows that are unrelated to GVCs. The results indicate that GVCs are one important driver of deep preferential liberalization
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  • 6
    Language: English
    Pages: Online-Ressource (54 p)
    Edition: 2011 World Bank eLibrary
    Parallel Title: Gasparini, Leonardo Educational Upgrading and Returns to Skills in Latin America
    Abstract: It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers
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  • 7
    Language: English
    Pages: 1 Online-Ressource (43 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Iacovone, Leonardo Regional Productivity Convergence in Peru
    Abstract: This paper examines whether labor productivity converged across Peru's regions ("departments") during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing)
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  • 8
    Language: English
    Pages: 1 Online-Ressource (38 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Bursztyn, Leonardo Moral Incentives: Experimental Evidence from Repayments of an Islamic Credit Card
    Abstract: This paper studies the role of morality in the decision to repay debts. Using a field experiment with a large Islamic bank in Indonesia, the paper finds that moral appeals strongly increase credit card repayments. In this setting, all of the banks late-paying credit card customers receive a basic reminder to repay their debt one day after they miss the payment due date. In addition, two days before the end of a ten-day grace period, clients in a treatment group also receive a text message that cites an Islamic religious text and states that "non-repayment of debts by someone who is able to repay is an injustice." This message increases the share of customers meeting their minimum payments by nearly 20 percent. By contrast, sending either a simple reminder or an Islamic quote that is unrelated to debt repayment has no effect on the share of customers making the minimum payment. Clients also respond more strongly to this moral appeal than to substantial financial incentives: receiving the religious message increases repayments by more than offering a cash rebate equivalent to 50 percent of the minimum repayment. Finally, the paper finds that removing religious aspects from the quote does not change its effectiveness, suggesting that the moral appeal of the message does not necessarily rely on its religious connotation
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  • 9
    Language: English
    Pages: 1 Online-Ressource (12 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Iacovone, Leonardo ICT Use, Competitive Pressures and Firm Performance in Mexico
    Abstract: This paper presents a set of stylized facts on the relation between information and communications technology (ICT) use, firm performance, and competition. Taking advantage of a novel firm-level data set on information and communications technology for Mexico, the study finds that firms facing higher competition appear to have more incentives to increase their use of information and communications technology. Accordingly, although there is indeed a positive relation between information and communications technology use and firm performance, this effect is greater for firms that face higher competition pressures, which is consistent with the theoretical predictions of the trade-induced technical change hypothesis
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  • 10
    Language: English
    Pages: 1 Online-Ressource (35 p)
    Series Statement: World Bank E-Library Archive
    Parallel Title: Erscheint auch als Castaneda, R. Andres Measuring Poverty in Latin America and the Caribbean : Methodological Considerations When Estimating an Empirical Regional Poverty Line
    Abstract: This paper contributes to the methodological literature on the estimation of poverty lines for country poverty comparisons in Latin America and the Caribbean. The paper exploits a unique, comprehensive data set of 86 up-to-date urban official extreme and moderate poverty lines across 18 countries in Latin America and the Caribbean, as well as the recent values of the national purchasing power parity conversion factors from the 2011 International Comparison Program and a set of harmonized household surveys that are part of the Socio-Economic Database for Latin America and the Caribbean project. Because of the dispersion of country-specific poverty lines, the paper concludes that the value of a regional poverty line largely depends on the selected aggregation method, which ends up having a direct impact on the estimation of regional extreme and moderate poverty headcounts
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