Business Environment and Firm Performance in European Lagging Regions
This paper explores the relationship between the regional business environment, lagging regions, and firm performance in four European countries: Italy, Poland, Romania, and Spain. It combines firm-level data from Orbis measuring sales, employment,...
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/908471513612361961/Business-environment-and-firm-performance-in-European-lagging-regions http://hdl.handle.net/10986/29073 |
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okr-10986-290732021-06-14T10:10:09Z Business Environment and Firm Performance in European Lagging Regions Farole, Thomas Hallak, Issam Harasztosi, Peter Tan, Shawn BUSINESS ENVIRONMENT FIRM PERFORMANCE LAGGING REGIONS This paper explores the relationship between the regional business environment, lagging regions, and firm performance in four European countries: Italy, Poland, Romania, and Spain. It combines firm-level data from Orbis measuring sales, employment, productivity, and profitability, with indicators from recently completed Subnational Doing Business studies in the four countries to examine if and how the business environment is associated with firm outcomes, and whether this is mediated by being located in a lagging region. The results indicate that firms located in regions with better business environments indeed display better performance, in employment and sales growth, as well as profitability. Moreover, the paper finds evidence that being located in a lagging region aggravates the impact of a poor business environment on firm performance. The results also highlight that it matters to distinguish between regions that are "low income" (relatively poor) and those that are "low growth" (stagnating but not necessarily poor). Firm performance, the business environment, and the relationship between the two are much stronger in the latter than in the former. Overall, the results suggest that policies that improve the business environment in lagging regions would be beneficial to the performance of firms in these regions, in growth, profitability, and investment. 2017-12-21T19:58:16Z 2017-12-21T19:58:16Z 2017-12 Working Paper http://documents.worldbank.org/curated/en/908471513612361961/Business-environment-and-firm-performance-in-European-lagging-regions http://hdl.handle.net/10986/29073 English Policy Research Working Paper;No. 8281 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Eastern Europe Europe Italy Poland Romania Spain |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
BUSINESS ENVIRONMENT FIRM PERFORMANCE LAGGING REGIONS |
| spellingShingle |
BUSINESS ENVIRONMENT FIRM PERFORMANCE LAGGING REGIONS Farole, Thomas Hallak, Issam Harasztosi, Peter Tan, Shawn Business Environment and Firm Performance in European Lagging Regions |
| geographic_facet |
Europe and Central Asia Eastern Europe Europe Italy Poland Romania Spain |
| relation |
Policy Research Working Paper;No. 8281 |
| description |
This paper explores the relationship
between the regional business environment, lagging regions,
and firm performance in four European countries: Italy,
Poland, Romania, and Spain. It combines firm-level data from
Orbis measuring sales, employment, productivity, and
profitability, with indicators from recently completed
Subnational Doing Business studies in the four countries to
examine if and how the business environment is associated
with firm outcomes, and whether this is mediated by being
located in a lagging region. The results indicate that firms
located in regions with better business environments indeed
display better performance, in employment and sales growth,
as well as profitability. Moreover, the paper finds evidence
that being located in a lagging region aggravates the impact
of a poor business environment on firm performance. The
results also highlight that it matters to distinguish
between regions that are "low income" (relatively
poor) and those that are "low growth" (stagnating
but not necessarily poor). Firm performance, the business
environment, and the relationship between the two are much
stronger in the latter than in the former. Overall, the
results suggest that policies that improve the business
environment in lagging regions would be beneficial to the
performance of firms in these regions, in growth,
profitability, and investment. |
| format |
Working Paper |
| author |
Farole, Thomas Hallak, Issam Harasztosi, Peter Tan, Shawn |
| author_facet |
Farole, Thomas Hallak, Issam Harasztosi, Peter Tan, Shawn |
| author_sort |
Farole, Thomas |
| title |
Business Environment and Firm Performance in European Lagging Regions |
| title_short |
Business Environment and Firm Performance in European Lagging Regions |
| title_full |
Business Environment and Firm Performance in European Lagging Regions |
| title_fullStr |
Business Environment and Firm Performance in European Lagging Regions |
| title_full_unstemmed |
Business Environment and Firm Performance in European Lagging Regions |
| title_sort |
business environment and firm performance in european lagging regions |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/908471513612361961/Business-environment-and-firm-performance-in-European-lagging-regions http://hdl.handle.net/10986/29073 |
| _version_ |
1764468427253088256 |