Rigidities in employment protection and exporting

A large number of studies have shown that contribution of exporters to economic growth and development is much higher than non-exporting firms. This evidence has lead governments to improve their trade policies in order to increase foreign exposure of firms. However, improvements in trade policies can only be fully effective when they are complemented with other regulatory reforms that improve the investment climate for firms. This study focuses on a particular aspect of investment climate, namely employment protection legislation, and shows how these regulations discourage firms from exporting. Using a rich set of firm level data from 26 countries in the Eastern Europe and Central Asia region, the author shows that firms that cannot create new jobs due to restrictive labor regulations are less likely to export. Evidence shows that firms that plan to export expand their size before they start to export. However the rigidities in labor markets make this adjustment costly. Higher costs of labor decrease operating profits and lead to a higher threshold value of productivity required for entering export markets. As a result, a smaller fraction of firms chooses to export.Labor Markets,Labor Policies,Microfinance,Small Scale Enterprise,E-Business

Importing, Exporting, and Innovation in Developing Countries

Several recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only exporters, only importers, and non-traders. Extending the existing models of firm evolution in open economies by incorporating importing decision, I provide a simple model and empirically show that: i) globally engaged firms are larger, more productive, and grow faster than non-traders; ii) two-way traders are the fastest growing and most innovative group who are followed by only-exporters; and iii) estimating export premium without controlling for import status is likely to overestimate the actual value by capturing the import premium. Finally I show the robustness of the findings by providing evidence from the panel data constructed from the original dataset and controlling for variables that are likely to affect firm growth.Globally engaged firms, trade in developing countries, R&D and innovation, firm and industry dynamics

Rigidities in Employment Protection and Exporting

There have been significant improvements in traditional trade policies in the past few decades. However, these improvements can only be fully effective when they are complemented with a favorable investment climate. This study focuses on a particular aspect of investment climate, namely labor regulations, and shows how these regulations can be discouraging from exporting. Using firm level data from 26 countries in Eastern Europe and Central Asia region, the paper empirically shows that firms that cannot create new jobs due to stringent labor regulations are less likely to export. Firms that plan to export expand their sizes before they start to export. However the rigidities in labor markets make this adjustment process costly. Higher costs of employment decrease operating profits and lead to a higher productivity threshold level required for entering export markets. As a result, a smaller fraction of firms can afford to export.Exporting, firm heterogeneity, labor regulations, developing countries, Eastern Europe and Central Asia region

Trade Policies, Investment Climate,and Exports

There is a large body of research that explores international trade as a source of the dispersion in income levels and growth performances across countries. The trade liberalization policies undertaken between 1950 and 2006 led to an almost 30 fold growth in the volume of international trade. However this increase has not been homogeneous across countries. This study investigates a possible reason that prevents convergence of countries in export performance. It shows that regulatory quality, customs efficiency, quality of infrastructure, and access to finance among other factors increase export performance. Furthermore, it shows that countries that are relatively more constrained in accessing to foreign markets benefit more from improvements in investment climate than the countries with easier foreign market access. Hence attaining a favorable investment climate for private sector development should be an important policy objective for relatively closed economies to achieve convergence in export volumes with countries that have more liberal trade policies.Export performance, trade policy, investment climate, institutions, trade facilitation

Trade policies, investment climate, and exports across countries

There is a large body of research that explores international trade as a source of the dispersion in income levels and growth performances across countries. The trade liberalization policies undertaken between 1950 and 2006 led to an almost 30 fold growth in the volume of international trade. However this increase has not been homogeneous across countries. This study investigates a possible reason that prevents convergence of countries in export performance. It shows that regulatory quality, customs efficiency, quality of infrastructure, and access to finance among other factors increase export performance. Furthermore, it shows that countries that are relatively more constrained in accessing to foreign markets benefit more from improvements in investment climate than the countries with easier foreign market access. Hence obtaining a favorable investment climate for private sector development should be an important policy objective for relatively closed economies to achieve convergence in export volumes with countries that have more liberal trade policies.Free Trade,Debt Markets,Economic Theory&Research,Emerging Markets,Trade Law

Importing, exporting and innovation in developing countries

Recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only exporters, only importers, and non-traders. Extending the existing models of firm evolution in open economies by incorporating importing decision, I show that: i) globally engaged firms are larger, more productive, and grow faster than non-traders; ii) two-way traders are the fastest growing and most innovative group who are followed by only-exporters; iii) estimating export premium without controlling for import status is likely to overestimate the actual value by capturing the import premium; and iv) R&D investment contributes to growth of traders significantly more than to non-traders. Finally I show the robustness of the findings by providing evidence from the panel data constructed from the original dataset and controlling for variables that are likely to affect firm growth.E-Business,Labor Policies,Microfinance,Economic Theory&Research,Emerging Markets

The Impact of Employment Web Sites' Traffic on Unemployment: A Cross Country Comparison

Although employment web sites have recently become the main source for re- cruitment and selection process, the relation between those sites and unemploy- ment rates is seldom addressed. Deriving data from 32 countries and 427 web sites, this study explores the correlation between unemployment rates of European countries and the attractiveness of country specific employment web sites. It also compares the changes in unemployment rates and traffic on all the aforementioned web sites. The results showed that there is a strong correlation between web sites traffic and unemployment rates.Comment: 9 page

Obstacles to growth for small and medium enterprises in Turkey

Many studies have shown that firm growth decreases monotonically with size and age. In this study, the authors investigate employment growth of firms in Turkey with an emphasis on small and medium size enterprises. In Turkey, small and medium size enterprises account for almost 77 percent of employment and play a crucial role in the economy. However, the analysis of firm dynamics in Turkey shows that medium-size firms (51-250 workers) are theslowest growing group in the economy. Moreover, small and medium size enterprises grow at a slower rate in Turkey than in several comparator countries in the Eastern Europe and Central Asia region. After determining this irregularity, the paper analyzes how the investment climate affects firm growth and finds that improved access to finance is the most important factor that significantly increases firm growth rates.Microfinance,Achieving Shared Growth,Small Scale Enterprise,Access to Finance,Emerging Markets

Electrically Guided DNA Immobilization and Multiplexed DNA Detection with Nanoporous Gold Electrodes.

Molecular diagnostics have significantly advanced the early detection of diseases, where the electrochemical sensing of biomarkers (e.g., DNA, RNA, proteins) using multiple electrode arrays (MEAs) has shown considerable promise. Nanostructuring the electrode surface results in higher surface coverage of capture probes and more favorable orientation, as well as transport phenomena unique to nanoscale, ultimately leading to enhanced sensor performance. The central goal of this study is to investigate the influence of electrode nanostructure on electrically-guided immobilization of DNA probes for nucleic acid detection in a multiplexed format. To that end, we used nanoporous gold (np-Au) electrodes that reduced the limit of detection (LOD) for DNA targets by two orders of magnitude compared to their planar counterparts, where the LOD was further improved by an additional order of magnitude after reducing the electrode diameter. The reduced electrode diameter also made it possible to create a np-Au MEA encapsulated in a microfluidic channel. The electro-grafting reduced the necessary incubation time to immobilize DNA probes into the porous electrodes down to 10 min (25-fold reduction compared to passive immobilization) and allowed for grafting a different DNA probe sequence onto each electrode in the array. The resulting platform was successfully used for the multiplexed detection of three different biomarker genes relevant to breast cancer diagnosis