 Business reform outcomes: Why so different?Petar Stankov and Aleksandar Vasilev Journal of Policy Modeling, 2019, vol. 41, issue 6, 1109-1127 Abstract: Post-crisis policy making increasingly focuses on doing business reforms. We argue that the effects of those reforms will be different across countries. To understand the reasons for the reform outcome divergence, we advance a novel firm-size distribution (FSDs) argument. At the center of the argument is the fact that FSDs are different across countries and stable over time. Then, if a given doing business reform induces firms of different size to grow differently, this will produce a variety of reform outcomes across countries. To advance the argument, we set up a tractable general equilibrium (GE) model and study how firms of different size grow after a doing business reform. The model predicts that larger firms will grow faster than smaller firms after the reform. The model predictions are tested on the Enterprise Surveys (ES) data, merged with the Doing Business indicators. We confirm that firms of different size grow differently after a Doing Business reform. Thus, based on the notable differences of firm size distributions across countries, identical reforms to start, operate and close a business will produce a variety of reform outcomes across countries. Keywords: Reform-growth puzzle; Doing business reforms; Firm size (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:41:y:2019:i:6:p:1109-1127 DOI: 10.1016/j.jpolmod.2019.04.003 Access Statistics for this article Journal of Policy Modeling is currently edited by A. M. Costa More articles in Journal of Policy Modeling from Elsevier |
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