Productivity in Emerging Countries Methodology and Firm-Level Analysis based on International Enterprise Business Surveys Elements in the Economics of Emerging Markets Series

Emerging countries are increasingly concerned with improving their competitiveness and productivity. This Element develops a robust econometric methodology, based on controlling for usual unobservable effects at the firm or plant level. By robust empirical results in total factor productivity (TFP), we mean estimating investment climate (IC) elasticities, or semi-elasticities, with equal signs and similar magnitudes for more than ten different competing TFP measures. The key to achieve similar empirical results for several TFP measures is to avoid having a problem omitted variables, achieved through imputation of large proportions of missing observations in relevant variables (i.e. the capital stock). Furthermore through the use of a new concept of aggregate TFP (tfpIC), that measures the associated IC effects on firm?s tfp, we are able to make meaningful cross-country firm?s level productivity comparisons, avoiding the usual problem of comparing 'apples with oranges' that would otherwise occur if we directly compare country's TFP measurements.

1. Introduction; 2. Econometric Productivity Methodologies at the Firm Level; 3. Enterprise Surveys (ES) and Imputation of Missing Observations; 4. Empirical Results on the Impact of IC Variables on TFP in Turkey; 5. Evidence of the Robustness of TFP Measures and of the Empirical Results of the Effects of the Investment Climate (IC); 6. International Countries´ Investment Climate Assessments Based on Enterprise Business Surveys of other Selected Emerging Countries and Regions; 7. Conclusions and Further Extensions.