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Business Environment, Exports, Ownership, and Firm Performance

Commander, Simon; Svejnar, Jan

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.

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Also Published In

Title
The Review of Economics and Statistics
DOI
https://doi.org/10.1162/REST_a_00135

More About This Work

Academic Units
International and Public Affairs
Publisher
MIT Press
Published Here
January 31, 2014