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Size and Age of Establishments : Evidence from Developing Countries / Ayyagari, Meghana
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Ayyagari, Meghana
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Age.
- Banks and Banking Reform.
- Education.
- Finance and Financial Sector Development.
- Financial Development.
- Firm Life Cycle.
- Labor Markets.
- Science and Technology Development.
- Science Education.
- Scientific Research & Science Parks.
- Size and Growth.
- Social Protections and Labor.
- Local Subjects:
- Age.
- Banks and Banking Reform.
- Education.
- Finance and Financial Sector Development.
- Financial Development.
- Firm Life Cycle.
- Labor Markets.
- Science and Technology Development.
- Science Education.
- Scientific Research & Science Parks.
- Size and Growth.
- Social Protections and Labor.
- Physical Description:
- 1 online resource (77 pages)
- Other Title:
- Size and Age of Establishments
- Place of Publication:
- Washington, D.C., The World Bank, 2013
- System Details:
- data file
- Summary:
- Survey data from 120 developing countries are used to examine the relation between establishment size and age in the formal sector. Existing research suggests that manufacturing establishments in developing countries do not grow over time, most likely because of market imperfections and regulations. To the contrary, this paper finds that the average plant in developing countries that is more than 40 years old employs almost five times as many workers as the average plant that is five years old or younger. The analysis finds consistent evidence when it looks within a large country, India, based on detailed manufacturing census data over 23 years. It also finds that differences in financial development across Indian states, while substantial, have a minor effect on firm growth, consistent with inefficiency of state-owned financial systems. These results hold controlling for differences in labor regulations across states, capital intensity, labor regulations, and firms born before and after the major reforms.
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