Good and Bad Institutions: Is the Debate Over? Cross-Country Firm-Level Evidence from the Textile Industry

Sumon Bhaumik and Ralitza Dimova ()

No 5471, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using firm-level data from nine developing countries we demonstrate that (a) certain institutions like restrictive labour market regulations that are considered to be bad for economic growth might be beneficial for production efficiency, whereas (b) good business environment which is considered to be beneficial for economic growth might have an adverse impact on production efficiency. We argue that our results suggest that the debate about the implications of institutional quality is far from being over, and classification of institutions into "good" and "bad" might be premature.

Keywords: stochastic frontier model; institutional quality; production efficiency (search for similar items in EconPapers)
JEL-codes: D02 D23 D24 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-01
New Economics Papers: this item is included in nep-dev, nep-eff and nep-hme
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Citations: View citations in EconPapers (4)

Published - published in: Cambridge Journal of Economics, 2014, 38(1), 109-126

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Journal Article: Good and bad institutions: is the debate over? Cross-country firm-level evidence from the textile industry (2014)
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