Investment Climate Assessment in Indonesia, Malaysia, the Philippines and Thailand: Results from Pooling Firm-Level Data
The Singapore Economic Review, Vol. 54, No. 3, pp. 335-366, 2009
Posted: 25 Apr 2010
Date Written: August 2009
Investment Climate surveys (ICs) are a recent instrument used by the World Bank to identify key obstacles to country competitiveness and to guide policy reforms and government interventions in developing countries. In this paper, panel data from four ICs of four South East Asian (SEA) countries namely, Indonesia, Malaysia, The Philippines, and Thailand, are pooled to estimate total factor productivity (TFP) and allocative efficiency aspects of firms in each country, using variants of the Olley and Pakes (1996) productivity decomposition. Several economic performance results are disaggregated to obtain country-specific evaluation of the IC impacts. To establish priorities for policy reforms, the corresponding key IC results are organized in five categories: infrastructures, red tape, corruption and crime, finance and corporate governance, quality, innovation and labor skills, and other control variables.
Keywords: Total factor productivity, investment climate, firms' perceptions, robust econometric methodology, demean Olley and Pakes decomposition, cross-country comparisons
JEL Classification: C23, C33, C43, C51, C52
Suggested Citation: Suggested Citation