Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business
The use of expert or qualitative surveys to rank countries business investment conditions is widespread. However, within the economic literature there are concerns about measurement error and endogeneity based on characteristics of the respondents...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090914154906 http://hdl.handle.net/10986/4246 |
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okr-10986-42462021-04-23T14:02:16Z Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business Hallward-Driemeier, Mary Aterido, Reyes ACCESS TO BANK ACCESS TO BANK LOANS ACCESS TO FINANCE BANK LOANS BANKS BIASES BOTTLENECKS BRIBE BRIBES BRIBING BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INDICATORS BUSINESS OPERATIONS BUSINESS PERFORMANCE CORPORATE TAX RATE CORRUPTION COUNTRY RISK CREDIBILITY CUSTOMS DEVELOPING COUNTRIES DUMMY VARIABLES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ELECTRICITY EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT OPPORTUNITIES ENDOWMENTS ENTERPRISE SURVEY ENTERPRISE SURVEYS EXPERT OPINION EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FINANCE ACCESS FINANCIAL SERVICES FIRM PERFORMANCE FIRM SIZE FIRMS FOREIGN FIRMS FORMAL BANK GLOBAL COMPETITIVENESS INEQUALITY INSPECTIONS INTERNATIONAL BANK INVESTING INVESTMENT CLIMATE LACK OF ACCESS LEGAL CONSTRAINTS LICENSE LICENSES LIMITED ACCESS LIMITED ACCESS TO FINANCE LOAN MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MANUFACTURING MARKETING PHONE LINE PRIVATE SECTOR PRODUCTIVITY PROPERTY RIGHTS REGULATORY BURDEN REGULATORY REQUIREMENTS RELIABILITY RESULTS RETURNS ROADS RULE OF LAW SALES GROWTH SEES SHARE OF INVESTMENTS SHOP SMALL FIRM SMALL FIRMS SOURCES OF FINANCE SOURCES OF FUNDS TARGETS TAX TAX RATES TELECOM TELECOMMUNICATION TELECOMMUNICATIONS TELEPHONE TELEPHONE LINES TRANSACTION TRANSPORT TRANSPORTATION TRUE USES WEB WORKING CAPITAL The use of expert or qualitative surveys to rank countries business investment conditions is widespread. However, within the economic literature there are concerns about measurement error and endogeneity based on characteristics of the respondents, raising questions about how well the data reflect the underlying reality they are trying to measure. This paper examines these concerns using data from 79,000 firms in 105 countries. The findings show that first, qualitative rankings correlate well with quantitative measures of the business environment, using both quantitative measures from within the survey and from external sources. Second, there are systematic variations in perceptions based on firm characteristics - focusing in particular on size and growth performance. However, it is not that an optimistic view of the business environment is simply the expression of a firm s own performance. Rather, firm size and performance affect the relative importance of certain constraints, particularly in areas such as finance, time with officials/inspectors, corruption, and access to reliable electricity. The results also show that much of the variation in subjective responses by firm types is largely due to differences in the objective conditions across firm types. There is little evidence that size and performance have non-linear effects in how constraining a given objective condition is reported to be. Overall, concerns about endogeneity remain in using business environment indicators to explain firm performance, but this stems primarily from the fact that who you are and how well you are doing can affect the conditions you face rather than whether the indicator used is qualitative or quantitative. 2012-03-19T19:12:32Z 2012-03-19T19:12:32Z 2009-09-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090914154906 http://hdl.handle.net/10986/4246 English Policy Research working paper ; no. WPS 5054 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO BANK ACCESS TO BANK LOANS ACCESS TO FINANCE BANK LOANS BANKS BIASES BOTTLENECKS BRIBE BRIBES BRIBING BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INDICATORS BUSINESS OPERATIONS BUSINESS PERFORMANCE CORPORATE TAX RATE CORRUPTION COUNTRY RISK CREDIBILITY CUSTOMS DEVELOPING COUNTRIES DUMMY VARIABLES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ELECTRICITY EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT OPPORTUNITIES ENDOWMENTS ENTERPRISE SURVEY ENTERPRISE SURVEYS EXPERT OPINION EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FINANCE ACCESS FINANCIAL SERVICES FIRM PERFORMANCE FIRM SIZE FIRMS FOREIGN FIRMS FORMAL BANK GLOBAL COMPETITIVENESS INEQUALITY INSPECTIONS INTERNATIONAL BANK INVESTING INVESTMENT CLIMATE LACK OF ACCESS LEGAL CONSTRAINTS LICENSE LICENSES LIMITED ACCESS LIMITED ACCESS TO FINANCE LOAN MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MANUFACTURING MARKETING PHONE LINE PRIVATE SECTOR PRODUCTIVITY PROPERTY RIGHTS REGULATORY BURDEN REGULATORY REQUIREMENTS RELIABILITY RESULTS RETURNS ROADS RULE OF LAW SALES GROWTH SEES SHARE OF INVESTMENTS SHOP SMALL FIRM SMALL FIRMS SOURCES OF FINANCE SOURCES OF FUNDS TARGETS TAX TAX RATES TELECOM TELECOMMUNICATION TELECOMMUNICATIONS TELEPHONE TELEPHONE LINES TRANSACTION TRANSPORT TRANSPORTATION TRUE USES WEB WORKING CAPITAL |
| spellingShingle |
ACCESS TO BANK ACCESS TO BANK LOANS ACCESS TO FINANCE BANK LOANS BANKS BIASES BOTTLENECKS BRIBE BRIBES BRIBING BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INDICATORS BUSINESS OPERATIONS BUSINESS PERFORMANCE CORPORATE TAX RATE CORRUPTION COUNTRY RISK CREDIBILITY CUSTOMS DEVELOPING COUNTRIES DUMMY VARIABLES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ELECTRICITY EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT OPPORTUNITIES ENDOWMENTS ENTERPRISE SURVEY ENTERPRISE SURVEYS EXPERT OPINION EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FINANCE ACCESS FINANCIAL SERVICES FIRM PERFORMANCE FIRM SIZE FIRMS FOREIGN FIRMS FORMAL BANK GLOBAL COMPETITIVENESS INEQUALITY INSPECTIONS INTERNATIONAL BANK INVESTING INVESTMENT CLIMATE LACK OF ACCESS LEGAL CONSTRAINTS LICENSE LICENSES LIMITED ACCESS LIMITED ACCESS TO FINANCE LOAN MACROECONOMIC INSTABILITY MACROECONOMIC STABILITY MANUFACTURING MARKETING PHONE LINE PRIVATE SECTOR PRODUCTIVITY PROPERTY RIGHTS REGULATORY BURDEN REGULATORY REQUIREMENTS RELIABILITY RESULTS RETURNS ROADS RULE OF LAW SALES GROWTH SEES SHARE OF INVESTMENTS SHOP SMALL FIRM SMALL FIRMS SOURCES OF FINANCE SOURCES OF FUNDS TARGETS TAX TAX RATES TELECOM TELECOMMUNICATION TELECOMMUNICATIONS TELEPHONE TELEPHONE LINES TRANSACTION TRANSPORT TRANSPORTATION TRUE USES WEB WORKING CAPITAL Hallward-Driemeier, Mary Aterido, Reyes Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5054 |
| description |
The use of expert or qualitative surveys
to rank countries business investment conditions is
widespread. However, within the economic literature there
are concerns about measurement error and endogeneity based
on characteristics of the respondents, raising questions
about how well the data reflect the underlying reality they
are trying to measure. This paper examines these concerns
using data from 79,000 firms in 105 countries. The findings
show that first, qualitative rankings correlate well with
quantitative measures of the business environment, using
both quantitative measures from within the survey and from
external sources. Second, there are systematic variations
in perceptions based on firm characteristics - focusing in
particular on size and growth performance. However, it is
not that an optimistic view of the business environment is
simply the expression of a firm s own performance. Rather,
firm size and performance affect the relative importance of
certain constraints, particularly in areas such as finance,
time with officials/inspectors, corruption, and access to
reliable electricity. The results also show that much of the
variation in subjective responses by firm types is largely
due to differences in the objective conditions across firm
types. There is little evidence that size and performance
have non-linear effects in how constraining a given
objective condition is reported to be. Overall, concerns
about endogeneity remain in using business environment
indicators to explain firm performance, but this stems
primarily from the fact that who you are and how well you
are doing can affect the conditions you face rather than
whether the indicator used is qualitative or quantitative. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Hallward-Driemeier, Mary Aterido, Reyes |
| author_facet |
Hallward-Driemeier, Mary Aterido, Reyes |
| author_sort |
Hallward-Driemeier, Mary |
| title |
Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| title_short |
Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| title_full |
Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| title_fullStr |
Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| title_full_unstemmed |
Comparing Apples with....Apples : How to Make (More) Sense of Subjective Rankings of Constraints to Business |
| title_sort |
comparing apples with....apples : how to make (more) sense of subjective rankings of constraints to business |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090914154906 http://hdl.handle.net/10986/4246 |
| _version_ |
1764390579125354496 |