Services Liberalization and Productivity of Manufacturing Firms: Evidence from Ukraine

42 Pages Posted: 20 Apr 2016

See all articles by Oleksandr Shepotylo

Oleksandr Shepotylo

Aston University - Aston Business School

Volodymyr Vakhitov

American University Kyiv

Date Written: January 1, 2012

Abstract

This paper brings new evidence on the impact of services liberalization on the performance of manufacturing firms. Using a unique database of Ukrainian firms in 2001-2007, the authors utilize an external push for liberalization in the services sector as a source of exogenous variation to identify the impact of services liberalization on total factor productivity (TFP) of manufacturing firms. The results indicate that a standard deviation increase in services liberalization is associated with a 9 percent increase in TFP. Allowing services liberalization to dynamically influence TFP through the investment channel leads to an even larger effect. The effect is robust to different estimation methods and to different sub-samples of the data. In particular, it is more pronounced for domestic and small firms.

Keywords: Economic Theory & Research, E-Business, Emerging Markets, ICT Policy and Strategies, Public Sector Corruption & Anticorruption Measures

Suggested Citation

Shepotylo, Oleksandr and Vakhitov, Volodymyr, Services Liberalization and Productivity of Manufacturing Firms: Evidence from Ukraine (January 1, 2012). World Bank Policy Research Working Paper No. 5944, Available at SSRN: https://ssrn.com/abstract=1983839

Oleksandr Shepotylo

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

Volodymyr Vakhitov

American University Kyiv ( email )

3, Poshtova Sq
Kyiv, Kyiv 04070
Ukraine
04070 (Fax)

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