Diagnosing Development Bottlenecks : China and India

Li, Wei; Mengistae, Taye; Xu, Lixin Colin

dc.creator	Li, Wei
dc.creator	Mengistae, Taye
dc.creator	Xu, Lixin Colin
dc.date	2012-03-19T18:01:53Z
dc.date	2012-03-19T18:01:53Z
dc.date	2011-04-01
dc.date.accessioned	2023-02-17T20:56:10Z
dc.date.available	2023-02-17T20:56:10Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110425160503
dc.identifier	http://hdl.handle.net/10986/3405
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244369
dc.description	Although it had a a lower income level than India in 1980, China's 2006 per capita gross domestic product stands more than twice that of India's. This paper investigates the role of the business environment in explaining China's productivity advantage using recent firm-level survey data. The analysis finds that China has better infrastructure, more skilled workers, and more labor-hiring flexibility than India, but a worse access to finance and higher regulatory burden. Infrastructure appears to be a key constraint for India: it lags significantly behind China, yet it has important indirect effects for the effectiveness of labor flexibility. Labor flexibility is also likely a major constraint for India, as evident in the predominance of small firms, the importance of firm size in accounting for India's disadvantage in productivity, and the complementarity of proxies of labor flexibility with infrastructure and access to finance. Interestingly, regulatory uncertainty has adverse effects in India but not in China. The empirical analysis suggests that it is important to consider country-specific growth bottlenecks and the indirect effects of policy reforms.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5641
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ADOPTION OF INFORMATION
dc.subject	ADVERSE EFFECTS
dc.subject	AVERAGE PRODUCTIVITY
dc.subject	BACKUP
dc.subject	BACKUP POWER
dc.subject	BANKING SYSTEM
dc.subject	BANKS
dc.subject	BOOK VALUE
dc.subject	BUSINESS CLIMATE
dc.subject	BUSINESS ENVIRONMENT
dc.subject	BUSINESS ENVIRONMENTS
dc.subject	BUSINESS OPPORTUNITIES
dc.subject	BUSINESSES
dc.subject	CAPABILITY
dc.subject	CAPITAL EXPENDITURE
dc.subject	COBB-DOUGLAS PRODUCTION FUNCTION
dc.subject	COLLECTIVE AGREEMENT
dc.subject	COMPARATIVE ANALYSIS
dc.subject	COMPETITIVE MARKET
dc.subject	COMPETITIVENESS
dc.subject	COMPUTER TECHNOLOGY
dc.subject	COMPUTERS
dc.subject	CONTRACT LABOR
dc.subject	CONTROL SYSTEM
dc.subject	CORRELATION MATRIX
dc.subject	COUNTRY-SPECIFIC FACTORS
dc.subject	CREATING JOBS
dc.subject	CROSS-SECTIONAL DATA
dc.subject	DEBT
dc.subject	DEMOCRACY
dc.subject	DEREGULATION
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	ECONOMIC ANALYSIS
dc.subject	ECONOMIC CONDITIONS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC EFFICIENCY
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC REFORM
dc.subject	ECONOMICS
dc.subject	ECONOMIES OF SCALE
dc.subject	ELECTRICITY
dc.subject	EMPIRICAL ANALYSIS
dc.subject	EMPLOYEE
dc.subject	EMPLOYMENT
dc.subject	EMPLOYMENT SIZE
dc.subject	ENTERPRISE SECTOR
dc.subject	ENTERPRISE SURVEYS
dc.subject	ENTREPRENEURSHIP
dc.subject	ENVIRONMENTAL
dc.subject	ENVIRONMENTS
dc.subject	EQUILIBRIUM
dc.subject	EQUIPMENT
dc.subject	EXPENDITURES
dc.subject	FINANCIAL REFORM
dc.subject	FINANCIAL SYSTEM
dc.subject	FIRM ENTRY
dc.subject	FIRM LEVEL
dc.subject	FIRM PERFORMANCE
dc.subject	FIRM PRODUCTIVITY
dc.subject	FIRM SIZE
dc.subject	FIRM-LEVEL PRODUCTIVITY
dc.subject	FOREIGN INVESTMENT
dc.subject	GEOGRAPHIC REGIONS
dc.subject	GLOBALIZATION
dc.subject	GOVERNMENT INTERVENTION
dc.subject	GROWTH STRATEGIES
dc.subject	HUMAN CAPITAL
dc.subject	IMPLEMENTATIONS
dc.subject	INCOME
dc.subject	INDUSTRIAL EMPLOYMENT
dc.subject	INFORMATION TECHNOLOGY
dc.subject	INNOVATION
dc.subject	INNOVATIONS
dc.subject	INSTALLATION
dc.subject	INTERMEDIATE INPUTS
dc.subject	JOB CREATION
dc.subject	JOB SECURITY
dc.subject	JOBS
dc.subject	LABOR DEMAND
dc.subject	LABOR DISPUTES
dc.subject	LABOR FORCE
dc.subject	LABOR FORCE SKILLS
dc.subject	LABOR LAWS
dc.subject	LABOR MARKET
dc.subject	LABOR MARKET FLEXIBILITY
dc.subject	LABOR MARKET REFORMS
dc.subject	LABOR MARKETS
dc.subject	LABOR PRODUCTIVITY
dc.subject	LABOR REGULATION
dc.subject	LABOR REGULATIONS
dc.subject	LARGE CITIES
dc.subject	LICENSE
dc.subject	LITERACY RATE
dc.subject	LOCAL FIRMS
dc.subject	LOCAL INFRASTRUCTURE
dc.subject	LOCAL LABOR MARKET
dc.subject	MANUFACTURING
dc.subject	MANUFACTURING INDUSTRIES
dc.subject	MARKET MECHANISM
dc.subject	MATERIAL
dc.subject	MEDIUM ENTERPRISE
dc.subject	NETWORKS
dc.subject	OPEN ACCESS
dc.subject	OPERATING COSTS
dc.subject	OUTPUTS
dc.subject	PERMANENT WORKERS
dc.subject	PHYSICAL INFRASTRUCTURE
dc.subject	POLICY ENVIRONMENT
dc.subject	POLICY FORMULATION
dc.subject	POLITICAL ECONOMY
dc.subject	PRIVATE FIRMS
dc.subject	PRIVATE SECTOR
dc.subject	PRIVATE SECTOR DEVELOPMENT
dc.subject	PRODUCERS
dc.subject	PRODUCT MARKET
dc.subject	PRODUCTION COSTS
dc.subject	PRODUCTION FUNCTIONS
dc.subject	PRODUCTION PROCESS
dc.subject	PRODUCTION PROCESSES
dc.subject	PRODUCTIVE FIRM
dc.subject	PRODUCTIVE FIRMS
dc.subject	PRODUCTIVE SECTOR
dc.subject	PRODUCTIVITY DIFFERENTIAL
dc.subject	PRODUCTIVITY EFFECTS
dc.subject	PRODUCTIVITY GAP
dc.subject	PRODUCTIVITY GROWTH
dc.subject	PROFITABILITY
dc.subject	PUBLIC POLICY
dc.subject	RELIABILITY
dc.subject	RESOURCE ALLOCATION
dc.subject	RESULT
dc.subject	RESULTS
dc.subject	RETAIL STORES
dc.subject	SAVINGS
dc.subject	SERVICE INDUSTRIES
dc.subject	SKILLED LABOR
dc.subject	SKILLED WORKERS
dc.subject	SOCIAL DEVELOPMENT
dc.subject	STATE BANKS
dc.subject	STATE-OWNED ENTERPRISES
dc.subject	TECHNOLOGICAL DEVELOPMENTS
dc.subject	TELECOMMUNICATIONS
dc.subject	TEMPORARY WORKERS
dc.subject	TOTAL EMPLOYMENT
dc.subject	TOTAL FACTOR PRODUCTIVITY
dc.subject	TRADE UNIONS
dc.subject	TRAGEDY OF THE COMMONS
dc.subject	TRANSACTION
dc.subject	TRANSACTION COSTS
dc.subject	TRANSITION ECONOMIES
dc.subject	TRANSMISSION
dc.subject	TRANSPORT
dc.subject	USE VALUE
dc.subject	USES
dc.subject	WEB
dc.subject	WELFARE EFFECTS
dc.subject	WORKER
dc.subject	WORKING CAPITAL
dc.title	Diagnosing Development Bottlenecks : China and India
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	South Asia
dc.coverage	East Asia and Pacific
dc.coverage	India
dc.coverage	China