The Binding Constraint on the Growth of Firms in Developing Countries

An application of growth diagnostics on the growth of firms: with evidence from Kosovo firms

“…Extensive empirical evidence suggests that a favourable business environment promotes the growth of firms, while many of them indicate that firms in developing countries face a tougher business environment (Rodrik et al 2004;Dollar et al, 2005;Carlin et al 2006;Dinh et al, 2010;Lee 2014). Since the analysis of data for this study is carried out focusing on three sets of variables, this review does the same, namely discusses findings of other studies related to human capital and infrastructure, quality of institutions, and the effects of access to finance on the growth of firms.…”

“…Similarly, there is a significant body of research aiming to explain the impact of physical infrastructure on the growth of firms. The evidence shows that, for instance, access to electricity has heterogeneous effects: small-and medium-size firms are often affected by power cuts, while large and micro firms tend not to be (Dinh et al, 2010;Aterido et al 2009, Aterido andHallward-Dreimeier 2011). The main reason is that micro firms use less energyintensive tools and large firms are more likely to secure their own energy supply (Gelb et al 2007).…”

Lewis on Industrialisation and Industrial Policy

“…Many firm‐level surveys however have revealed access to funding as an important issue, and building up an effective system of financial intermediation based around commercial banks has proved a major challenge in many cases (Dinh, Mavridis, & Nguyen, ).…”

Are Firms in Developing Countries in Spider Webs or Iron Cages? Geographic Traps and Firm Performance

“…As a result, production delays tend to be higher, resulting in slower speed to market and decreased sales. The lack of cooperation between neighbors limits cross‐border trading (Dinh, Mavridis, & Nguyen, ). The more bad neighbors a country has, the greater the challenge for firms in that country to increase productivity due to operational constraints associated with raw materials and distribution logistics (Harrison et al, ).…”

“…The greater the intensity of the disease, the more likely the population will be debilitated and the lower the economic development. Because low economic development is generally associated with lower income and consumption, diseases can affect firm performance negatively (Dinh et al, ). Absenteeism caused by malaria‐associated sickness and death is also likely to be high, which affects firm operations and performance.…”