@article{IacovoneCrespiBowenetal., author = {Iacovone, Leonardo and Crespi, Gustavo and Bowen, J David and Marcolin, Luca}, title = {Decomposing firm-level productivity growth and assessing its determinants: evidence from the Americas}, series = {The Journal of Technology Transfer}, volume = {43}, journal = {The Journal of Technology Transfer}, number = {6}, doi = {10.1007/s10961-018-9678-0}, pages = {1571 -- 1606}, abstract = {This paper provides novel empirical evidence on productivity growth in the manufacturing sector in Chile, Colombia, Mexico and Peru. Relying on plant-level data, we first decompose productivity and productivity growth into plant-level growth and market allocation forces. While the average productivity of the survivors is higher than the overall contribution of reallocation forces, during recessions the inverse is true and reallocation gives a positive, albeit small, contribution to aggregate productivity growth. Next we analyze how policy measures can determine allocative efficiency levels and growth, and find important scope for action on education, financial regulation, and structural reforms.}, language = {en} } @article{IacovoneFreseCamposetal., author = {Iacovone, Leonardo and Frese, Michael and Campos, Francisco and Goldstein, Markus and Johnson, Hillary and McKenzie, David and Mensmann, Mona}, title = {Closing the Gender Gap - Personal Initiative Training and Female Business Performance}, series = {Academy of Management Proceedings}, volume = {2018}, journal = {Academy of Management Proceedings}, number = {1}, doi = {10.5465/AMBPP.2018.10669abstract}, abstract = {While female entrepreneurship has important impacts on economic development, female-owned businesses obtain lower profits and lower growth rates than male- owned businesses. We conduct a randomized controlled field experiment with 1196 entrepreneurs in Lom{\´e}, Togo, to determine whether personal initiative training constitutes a way to enhance female entrepreneurs' business success and to close this gender gap. Basing our argumentation on social role theory and the process model of entrepreneurial action, we argue that because of their social gender roles female entrepreneurs perceive that entrepreneurial action incurs higher risks and lower returns. We hypothesize that personal initiative training leads female entrepreneurs to decrease perceived risks of entrepreneurial action by increasing their entrepreneurial self-efficacy and error competence and to increase their perceived returns of entrepreneurial action by increasing entrepreneurial passion, which ultimately leads to female entrepreneurs' business success. The results largely support our hypotheses. This study contributes to the literature on the gender gap in entrepreneurship and has important implications for entrepreneurial training interventions.}, language = {en} } @article{IacovoneCruzBussolo, author = {Iacovone, Leonardo and Cruz, Marcio and Bussolo, Maurizio}, title = {Organizing knowledge to compete: Impacts of capacity building programs on firm organization}, series = {Journal of International Economics}, journal = {Journal of International Economics}, number = {111}, doi = {10.1016/j.jinteco.2017.12.001}, pages = {1 -- 20}, abstract = {A growing literature aiming at explaining differences in productivity and access to global export markets across firms has focused on the internal organization of firms. This paper contributes to this literature by evaluating the impact of a program that aims at enhancing competitiveness of small and medium enterprises in Brazil by providing coaching and consulting on management and production practices. Specifically, the paper tests whether the program induces treated firms to reorganize knowledge by adding more layers of different skills and competencies to their workforces. Using a unique firm-level data set, the number of layers of knowledge of the firms are compared before and after the program. The impact of the program is identified by relying on an instrumental variable approach, exploiting the quasi-experimental roll-out of its implementation, which was carried out at different times across Brazilian regions. The analysis finds that the program had an effect and that this effect is heterogeneous. The program is particularly effective in promoting the reorganization of small and medium firms. The results confirm another finding of the literature, namely that in re-organized firms wage inequality increases. Finally, these results are used to discuss how the change in firms' organization is positively correlated with export performance.}, language = {en} } @article{IacovoneDeHoyos, author = {Iacovone, Leonardo and De Hoyos, Rafael E}, title = {Economic Performance under NAFTA: A Firm-Level Analysis of the Trade-productivity Linkages}, series = {World Development}, volume = {44}, journal = {World Development}, pages = {180 -- 193}, abstract = {Did the North American Free Trade Agreement make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying an innovative microeconometric approach that disentangles the various channels through which integration with the global markets (via international trade) can affect firm-level productivity. The results show that the North American Free Trade Agreement stimulated the productivity of Mexican plants via: (1) an increase in import competition and (2) a positive effect on access to imported intermediate inputs. However, the impact of trade reforms was not identical for all integrated firms, with fully integrated firms (i.e. firms simultaneously exporting and importing) benefiting more than other integrated firms. Contrary to previous results, once self-selection problems are solved, the analysis finds a rather weak relationship between exports and productivity growth.}, language = {en} } @article{CardotIacovonePierolaetal., author = {Cardot, Olivier and Iacovone, Leonardo and Pierola, Martha Denisse and Rauch, Ferdinand}, title = {Success and failure of African exporters}, series = {Journal of Development Economics}, volume = {101}, journal = {Journal of Development Economics}, doi = {10.1016/j.jdeveco.2012.12.004}, pages = {284 -- 296}, abstract = {Using a new dataset with transaction-level export data from four African countries (Malawi, Mali, Senegal and Tanzania), this paper explores the determinants of success upon entry into export markets, defined as survival beyond the first year at the firm-product-destination level. We find that the probability of success rises with the number of same-country firms exporting the same product to the same destination, suggesting the existence of cross-firm externalities. We explore several conjectures on the determinants of these externalities and provide evidence suggestive of information spillovers, possibly mediated through the banking system.}, language = {en} } @article{Iacovone, author = {Iacovone, Leonardo}, title = {The better you are the stronger it makes you: Evidence on the asymmetric impact of liberalization}, series = {Journal of Development Economics}, volume = {99}, journal = {Journal of Development Economics}, number = {2}, pages = {474 -- 485}, abstract = {This paper studies how liberalization affects productivity growth using micro-level plant data. While previous studies have already shown the existence of a positive relationship between competition and economic performance, the novelty of this paper is that it analyzes not only the average impact of liberalization, but also goes "beyond the average" and shows how the liberalization can affect dissimilar plants in a different way. The author first develops a model which predicts that, while the impact of liberalization on productivity growth is positive "on average", more advanced firms tend to benefit more. In fact, liberalization generates two competing effects: on one side it spurs more innovative efforts because of the increased entry threat by foreign competitors, on the other side, enhanced competition curtails expected profits and reduces the funds available to finance innovative activities. The pro-competitive effect is weaker for less advanced firms as for them it is harder to catch-up with the "technology frontier". These predictions are then tested focusing on Mexican plants during the NAFTA liberalization. The results show that a 1 percent reduction in tariffs spurred productivity growth between 4 and 8 percent on average. However, for backward firms this effect is much weaker if not close to zero, otherwise for more advanced ones this effect is stronger with productivity growing between 11 and 13 percent. Consistent with the theoretical model the results are stronger in those sectors where the scope for innovative activities is more pronounced. These results are particularly important for policy makers because they suggest that while increasing competition may be good in spurring average productivity, it is also true that this effect does not hold for all type of firms, in particular more backward firms may need some complementary support policy to upgrade their capacities and keep up with the more competitive environment.}, language = {en} } @techreport{JavorcikFitrianiIacovone, type = {Working Paper}, author = {Javorcik, Beata and Fitriani, Fitria and Iacovone, Leonardo}, title = {Productivity Performance in Indonesia's Manufacturing Sector}, series = {Indonesia PREM policy note}, journal = {Indonesia PREM policy note}, edition = {5}, publisher = {World Bank Group}, abstract = {Relying on firm-level data from Statistik Industri this note analyzes the evolution of productivity dynamics of Indonesian firms over the past 20 years (1990-2009). Economy-wide and sectoral productivity changes are decomposed into their two main components: changes due to the evolution of average productivity and changes due to 'allocative efficiency'. This decomposition shows that while during the 20 years both components have increased, the changes in allocative efficiency have been mainly driven by average productivity growth and less by increases in allocative efficiency, even if the latter has also improved during the period under analysis. Interestingly, the note shows that both average Total Factor Productivity (TFP) growth and allocative efficiency improvements are especially driven by a few sectors: electronics, machinery and instruments, and textiles, clothing and footwear. Limited improvements in both allocative efficiency and average TFP have occurred instead in natural-resource-based sectors, sectors characterized by more limited competition and higher rents. This note emphasizes the importance of 'allocative efficiency' for productivity evolution because, in a context where firms are very different in their productivity, it becomes crucial how resources are allocated in the economy. This series of policy notes suggests that regulatory reforms, exposure to foreign competition and access to imported intermediate inputs are important determinants of allocative efficiency. The problem of a 'missing middle' is closely related to that of sub-optimal allocation of resources across firms: a strong feature of Indonesian firm-size distribution. Going further, the note suggests that burdensome regulations and imperfect financial markets are two important causes of this missing middle. To complement the focus on productivity, the note also analyzes firm-level job dynamics and points to the crucial role of 'start-ups' and new companies as a key driver of job creation. This finding suggests that the focus of policymakers on Small and Medium Enterprises (SMEs) may be misplaced and that this focus should start realigning towards supporting more dynamic 'start-ups' rather than SMEs.}, language = {en} } @techreport{IacovoneGonzaloAldazCarroll, type = {Working Paper}, author = {Iacovone, Leonardo and Gonzalo, Varela and Aldaz-Carroll, Enrique}, title = {Determinants of Market Integration and Price Transmission in Indonesia}, series = {Policy Research Working Paper}, journal = {Policy Research Working Paper}, edition = {No. 6098}, publisher = {World Bank}, address = {Washington, DC}, abstract = {This paper investigates the determinants of price differences and market integration among Indonesian provinces, using data from retail cooking oil, rice and sugar markets during the period 1993-2007, and from wholesale maize and soybean markets during the period 1992-2006. The authors measure the degree of integration using co-integration techniques, and calculate average price differences. They use regression analysis to understand the drivers of price differences and market integration. For rice and sugar, they find wide market integration and low price differences, in the range of 5-12 percent. For maize, soybeans and cooking oil, they find less integration and higher price differences (16-22 percent). Integration across provinces is explained by the remoteness and quality of transport infrastructure of a province. Price differences across provinces respond to differences in provincial characteristics such as remoteness, transport infrastructure, output of the commodity, land productivity and income per capita.}, language = {en} } @techreport{IacovoneJavorcik, type = {Working Paper}, author = {Iacovone, Leonardo and Javorcik, Beata Smarzynska}, title = {Getting ready: Preparation for exporting}, series = {Centre for Economic Policy Research}, journal = {Centre for Economic Policy Research}, edition = {DP8926}, abstract = {This study examines developments at the plant-product level preceding an expansion into foreign markets. It relies on very detailed Mexican data for 1994-2004, a period of liberalization in US trade policy vis a vis Mexico, mandated by the North American Free Trade Agreement. Our approach is novel in that we focus on quality, proxied by domestic price premium, of current and future export products. Our findings are consistent with quality upgrading taking place in preparation for entry into export markets. We show that manufacturers who export a particular product variety tend to obtain a price premium for their domestic sales of this variety. Consistently with the hypothesis of quality upgrading before exporting, we find evidence that this premium emerges exactly one year before a variety starts being exported. We find no evidence of upgrading after entering export markets. Our IV estimates suggest that the changes in the price premium are driven by the anticipated cuts in US tariffs and are particularly pronounced among producers exhibiting better performance in the initial period.}, language = {en} } @incollection{IacovoneBrownCrespietal., author = {Iacovone, Leonardo and Brown, J David and Crespi, Gustavo A and Marcolin, Luca}, title = {Productivity Convergence at the Firm Level: New Evidence from the Americas}, series = {Understanding the Income and Efficiency Gap in Latin America and the Caribbean}, booktitle = {Understanding the Income and Efficiency Gap in Latin America and the Caribbean}, isbn = {978-1-4648-0450-2}, doi = {10.1596/978-1-4648-0450-2_ch5}, publisher = {Hertie School}, pages = {117 -- 186}, abstract = {Uses firm-level data from the manufacturing sector in Colombia, Mexico, and the United States, in the past decade, to investigate the extent to which aggregate productivity growth in the manufacturing sector is driven by growth in productivity at the firm level or by reallocation of employment shares across firms. The evaluation produced results that stress a focus on firm-level productivity growth, as this has contributed the most to overall productivity growth. Reallocation between firms, within sectors, results in a weak force of productivity growth, and reallocation between sectors an even weaker source of growth. Although firms converge toward the domestic frontier with spillovers arising from the growth of the domestic frontier, no convergence occurs with respect to the global frontier. For all countries analyzed, the most important determinant of productivity convergence at the firm level remains innovation effort, measured as the firm-level expenditure shares in innovation and investment in capital equipment.}, language = {en} } @techreport{IacovoneSanchezBayardoSharma, type = {Working Paper}, author = {Iacovone, Leonardo and S{\´a}nchez-Bayardo, Luis F and Sharma, Siddharth}, title = {Regional productivity convergence in Peru}, series = {Policy Research working paper}, journal = {Policy Research working paper}, edition = {WPS 7499}, publisher = {World Bank Group}, address = {Washington, D. C.}, abstract = {This paper examines whether labor productivity converged across Peru's regions ("departments") during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing).}, language = {en} } @article{IacovoneEckelJavorciketal., author = {Iacovone, Leonardo and Eckel, Carsten and Javorcik, Besta and Neary, J Peter}, title = {Multi-product firms at home and away: Cost- versus quality-based competence}, series = {Journal of International Economics}, volume = {95}, journal = {Journal of International Economics}, number = {2}, doi = {10.1016/j.jinteco.2014.12.012}, pages = {216 -- 232}, language = {en} }