Is the World Flat? Or Do Countries Still Matter?

Alberto Chong and Mark Gradstein

No 4488, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper revisits the effects of a country's institutional framework on individual firms behavior, in particular focusing on their propensity to comply with legal rules. The theoretical model presented here suggests that these effects may be of paramount significance contrary to the recently popularized paradigm arguing that differences across countries have ceased to matter much. This paper's empirical strategy consists of explaining the variation in measures of non-compliance with legal rules and employs a rich dataset based on thousands of firms from dozens of countries. We find that most of the variation emanates from country-wide differences in institutional quality, although some firm characteristics play a role as well. Our conclusion is that countries still matter in providing institutional infrastructure, which determines to a large extent the context within which firms operate.

Date: 2006-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.iadb.org/research/pub_hits.cfm?pub_id=W ... e_name=pubWP-584.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.iadb.org/research/pub_hits.cfm?pub_id=WP-584&pub_file_name=pubWP-584.pdf [301 Moved Permanently]--> https://www.iadb.org/research/pub_hits.cfm?pub_id=WP-584&pub_file_name=pubWP-584.pdf)

Related works:
Working Paper: Is the World Flat?: Or Do Countries Still Matter? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:wpaper:4488

Access Statistics for this paper

More papers in Research Department Publications from Inter-American Development Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library (bid-library@iadb.org).