Identifying Binding Constraints to Growth Does Firm Size Matter?

As emphasized by Hausmann, Rodrik and Velasco, the policy challenge of boosting growth requires prioritization and identifying what are the most binding constraints. This paper draws on firm-level data from the World Bank Enterprise Survey, which suggests that the obstacles for the functioning of fi...

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Bibliographic Details
Main Author: Vargas, Mauricio
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2015
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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653 |a Crime 
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653 |a Labor Economics: General 
653 |a White-collar crime 
653 |a Macroeconomics 
653 |a Electric Utilities 
653 |a Tax administration and procedure 
653 |a Firm Behavior: Empirical Analysis 
653 |a Investment & securities 
653 |a Taxation 
653 |a Transportation 
653 |a Income economics 
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520 |a As emphasized by Hausmann, Rodrik and Velasco, the policy challenge of boosting growth requires prioritization and identifying what are the most binding constraints. This paper draws on firm-level data from the World Bank Enterprise Survey, which suggests that the obstacles for the functioning of firms is related to firm size. Recognizing the potential endogeneity and simultaneity between firms' constraints and firm size, we implement an Ordered-Probit model with a potential categorical endogenous regressor to estimate, for the case of Bolivia, the conditional probability of facing obstacles given the firm size category, while controlling for other factors. The results confirm the importance of allowing for the roles of firm size in identifying constraints and suggest priorities for policies to remove constraints to economic performance