Why do Firms in Developing Countries Have Low Productivity?

11 Pages Posted: 8 Jan 2010

See all articles by Nicholas Bloom

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Aprajit Mahajan

Stanford University; University of California, Berkeley - Department of Agricultural & Resource Economics; National Bureau of Economic Research (NBER)

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Donald John Roberts

Stanford Graduate School of Business

Date Written: January 8, 2010

Abstract

The productivity of firms in developing countries appears to be extremely low. Prior work, such as that summarized in James Tybout (2000) and World Bank (2004), has highlighted a set of issues around infrastructure, informality, regulations, trade policies, and human capital that reduce the productivity of firms in developing countries. In this short article we want to focus instead on three other areas which recent research has emphasized: management practices, financial constraints and the delegation of decision making.

Keywords: productivity, development firms

JEL Classification: L2, M2, O14, O32, O33

Suggested Citation

Bloom, Nicholas and Mahajan, Aprajit and McKenzie, David John and Roberts, Donald John, Why do Firms in Developing Countries Have Low Productivity? (January 8, 2010). Available at SSRN: https://ssrn.com/abstract=1533430 or http://dx.doi.org/10.2139/ssrn.1533430

Nicholas Bloom (Contact Author)

Stanford University - Department of Economics ( email )

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HOME PAGE: http://economics.stanford.edu/faculty/bloom

National Bureau of Economic Research (NBER) ( email )

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Aprajit Mahajan

Stanford University ( email )

Stanford, CA 94305
United States

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David John McKenzie

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Donald John Roberts

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9345 (Phone)
650-725-0468 (Fax)

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