Business Environment, Exports, Ownership, and Firm Performance

Simon Commander and Jan Svejnar
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Simon Commander: EBRD, IE Business School, IZA

The Review of Economics and Statistics, 2011, vol. 93, issue 1, 309-337

Abstract: We use two large samples of firms to assess the effects of business environment constraints, competition, export orientation, and ownership on firm performance. We deal with omitted variables, errors in variables, and endogeneity, and find that few business constraints affect performance. Replicating the analysis with Doing Business and Heritage Foundation indicators of the business environment yields similar results. In fact, country fixed effects, reflecting time-invariant differences in the business environment as well as other factors such as health care and education, matter more for firm performance than differences in the business environment across firms within countries. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2011
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