Financial frictions and the rule of law

Abstract

We thank audiences at several conferences and institutions for comments and suggestions. All remaining errors are our own. Restuccia gratefully acknowledges the support from the Social Sciences and Humanities Research Council of Canada and the Canada Research Chairs program. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Misallocation Across Establishment Gender

“…One interpretation is that these obstacles are major hinderances to business operation, but only if property rights are secure; that is once issues related to crime and informality are sufficiently addressed. To an extent, this interpretation mirrors the empirical findings in Johnson et al (2002) and the quantitative results in Ranasinghe and Restuccia (2018).…”

Misallocation across Establishment Gender

“…One interpretation is that these obstacles are major hinderances to business operation, but only if property rights are secure; that is once issues related to crime and informality are sufficiently addressed. To an extent, this interpretation mirrors the empirical findings in Johnson et al (2002) and the quantitative results in Ranasinghe and Restuccia (2018).…”

“…1 Select examples of work related to distortions and establishment size are Guner et al (2008) and Bento and Restuccia (2017), on access to finance are Buera et al (2011) and Midrigan and Xu (2014), on crime and property rights are Ranasinghe (2017), Besley and Mueller (2018) and Ranasinghe and Restuccia (2018), on the informal sector are López (2017) and Ulyssea (2018), and on sectoral differences in misallocation is Dias et al (2016).…”

“…For instance on corruption, taxation and informality seeDusha (2015),López (2017), LaPorta and Shleifer (2014) andUlyssea (2018); on crime seeRanasinghe (2017),Oguzoglu and Ranasinghe (2017) andBesley and Mueller (2018); on limited access to finance seeBuera et al (2011) andMidrigan and Xu (2014). Related to the joint effects of crime and finance seeRanasinghe and Restuccia (2018).…”

Misallocation and aggregate productivity across time and space

“…Any measured policy is shown to have some limited effect, and so many different policies and institutions are needed to account for the data. It is also possible that many sources of policy distortions are correlated and interact; see, for instance, Moscoso Boedo and Mukoyama () analyzing the cost of entry and firing costs across countries from the Doing Business database of the World Bank and Ranasinghe and Restuccia () for the role and interaction of financial frictions and the rule of law using cross‐country establishment‐level data from the World Bank Enterprise Survey.…”