High institutional and regulatory barriers make it unusually costly for manufacturing firms to exit in India – discouraging entry, keeping inefficient firms afloat, and lowering productivity.
Firm productivity rises in privately run Indian SEZs but stagnates in public ones, suggesting that political interference fuels rent-seeking behaviour.
Performance-linked contracts, increasingly enabled by financial technology, can better spur investment among small firms than rigid microcredit—especially for risk- and loss-averse business owners.
Despite offering attractive conditions for foreign investment, a combination of structural and institutional barriers often prevent developing countries from realising their full potential. Yonas Alemu describes the obstacles he overcame to establish...
Many businesses in developing countries hire workers from family networks. How does redistributive pressure from family influence hiring decisions? And how do these hiring decisions affect business profits?
Evidence from China finds that firms underestimate the value of new partnerships and therefore under-search for partners. As a result, referrals to new suppliers and clients can greatly improve firm performance.
How can Development Finance Institutions use research to inform their investment decisions? What is their role in supporting economic development and private investment?
Evidence from Kenya shows how cash transfers in imperfect markets lead businesses to capture some of the benefits by raising prices, ultimately at the expense of transfer recipients.
