Influence of local institutional profile on global value chain participation

2020 ◽  
Vol 14 (3) ◽  
pp. 715-735 ◽  
Author(s):  
Jin Hong ◽  
Chongyang Zhou ◽  
Ruicheng Wang
Keyword(s):  
Value Chain ◽  
Rapid Expansion ◽  
Global Value Chain ◽  
Content Type ◽  
The World Bank ◽  
Matching Technique ◽  
Institutional Profile ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
The Relationship

Purpose The emergence and rapid expansion of global value chains (GVCs) have profoundly changed and reshaped the global trade regime. Although many determinants of GVC participation of enterprises have been discussed extensively in extant literature, the important influence of local institutional profile on GVC participation is often neglected. The purpose of this paper is to investigate the influence of local institutional profile on GVC participation. Design/methodology/approach Taking the World Bank Enterprise Survey as the empirical sample, it is used an econometric method (propensity score matching technique) to test the relationship between local institutional profile and GVC participation. Findings Local institutional quality is positively related to GVC participation. Moreover, GVC participants display better innovation performance than non-participants. Innovation benefit from GVC participation is contingent upon the abilities of the participants, namely, absorptive capacity and research and development collaboration experience. GVC participants who only either export or import is compared with those who export and import; the findings show that the latter benefits more than the former. Originality/value This study offers researchers and practitioners a detailed view of local institutional profile and GVC participation.

Does external auditing combat corruption? Evidence from private firms

2018 ◽  
Vol 33 (3) ◽  
pp. 267-287 ◽  
Author(s):  
Omar Farooq ◽  
Nermeen F. Shehata
Keyword(s):  
Financial Statements ◽  
Total Sample ◽  
Firm Level ◽  
Content Type ◽  
The World Bank ◽  
Level Data ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
The Relationship ◽  
Practical Implications

Purpose This paper aims to document whether firms with audited financial statements pay lower bribes to get contracts than firms without audited financial statements. In other words, this study assesses whether external auditing helps combat corruption. Design/methodology/approach The World Bank Enterprise Survey data covering the period between 2006 and 2014 is used. The total sample comprised more than 50,000 firms in 126 countries. Findings This paper finds that firms with audited financial statements pay significantly lower bribes compared to firms with unaudited financial statements. The results are robust across various estimation procedures, various proxies for bribery and various sub-samples. It is also found that the relationship between audited financial statements and bribery is more pronounced in environments where firms face higher pressure to engage in corrupt practices. Practical implications The results imply that auditing of financial statements can act as a disciplining device to curb bribery in environments that encourage corruption. Originality/value This paper is the first attempt, according to the authors’ knowledge, to examine the relationship between external auditing and corruption using firm-level data that cover 126 countries and is gathered over a 14-year period. Therefore, the results derived from this study are generalizable.

Major obstacles facing business enterprises in an emerging economy: the case of Ghana using the World Bank Enterprise Survey

2021 ◽  
Vol 28 (3) ◽  
pp. 475-487
Author(s):  
Ibrahim Mohammed ◽  
Alhassan Bunyaminu
Keyword(s):  
World Bank ◽  
Emerging Economy ◽  
Probit Regression ◽  
Cross Sectional ◽  
Content Type ◽  
The World Bank ◽  
The World ◽  
Business Enterprises ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey

PurposeThis paper aims at identifying the major obstacles to business enterprise in an emerging economy and how these obstacles are associated with different characteristics of the enterprises.Design/methodology/approachThe study relied on the World Bank Enterprise Survey data on Ghana and applied binary and ordinal probit regression techniques to estimate the associations between the characteristics of the enterprises and the identified obstacles. Significance testing of the associations is also conducted.FindingsThe five main obstacles perceived by most of the enterprises in the study are access to finance, electricity, access to land, customs and trade regulations and tax rates. These obstacles are associated in different ways to growth rate (high vs low growth), scale (small and medium vs large), age, size of employees, the experience of the top manager and ownership (wholly domestic vs foreign ownership).Research limitations/implicationsAs a cross-sectional study focusing on Ghana, the findings are informative about the major obstacles facing business enterprises in an emerging economy; however, the ecological validity of these findings may be limited to factors specific to Ghana.Originality/valueGiven the representativeness of the Enterprise Survey, policymakers can rely on these findings to formulate useful policies to promote the operations of business enterprises.

scholarly journals Employment Growth of Small, Medium, and Large Firms: Evidence from Zambia

2019 ◽  
Vol 11 (3) ◽  
pp. 1
Author(s):  
Yordanos Gebremeskel
Keyword(s):  
World Bank ◽  
Employment Growth ◽  
Strong Relationship ◽  
Full Time ◽  
Large Firms ◽  
The World Bank ◽  
Manufacturing Sectors ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
The Relationship

We have used the World Bank Enterprise Survey data and examined the relationship between size, age and employment growth of 720 small, medium and large firms from four cities in Zambia. These firms have between 1-2010 full-time employees and operate in services, retail, and manufacturing sectors. The employment growth is defined as a difference in logarithm of full-time employees between two years and divided by the age of the firm. Our estimation shows that there is a strong relationship between employment growth, size, and age of firms. We find that younger firms but not smaller size are more important in creating employment growth.

Global value chain linkages and domestic value-added content: Empirical evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bhushan Praveen Jangam ◽  
Badri Narayan Rath
Keyword(s):  
Value Chain ◽  
Least Squares Method ◽  
Value Added ◽  
Value Chains ◽  
Global Value Chain ◽  
Content Type ◽  
Services Sector ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This paper aims to examine the relationship between global value chains (GVCs) and domestic value-added content (DVA) in a panel of 58 countries for the period 2005–2015. Design/methodology/approach First, the authors quantify the refined measures of GVC linkages by using the Borin and Mancini (2019) decomposition technique. Second, the authors apply the feasible generalised least squares method to test the relationship between GVCs and DVA empirically. Findings First, the authors find that GVC links are crucial to the enhancement of DVA. Second, a study at the sectoral level reveals that GVC links in the primary sector raise DVA whilst reducing DVA in the services sector. Third, the authors find that only upstream activities enhance value-added content. Fourth, the authors note the augmenting role played by national policies in mediating the gains associated with GVCs. Finally, the authors note that the outcomes associated with GVCs are consistent when the sample of countries is divided into groups based on income. Practical implications The results lead us to urge policymakers to promote greater integration of business activities into GVCs to reap their benefits. Originality/value This paper contributes to the research on the impact of GVCs on DVA by emphasising the significance of the types of GVC activities and policies that improve DVA.

scholarly journals ICT adoption, competition and innovation of informal firms in West Africa: a comparative study of Ghana and Nigeria

2020 ◽  
Vol 14 (3) ◽  
pp. 397-414 ◽  
Author(s):  
Alhassan Abdul-Wakeel Karakara ◽  
Evans Osabuohien
Keyword(s):  
West Africa ◽  
Positive Impact ◽  
Binary Logistic Regression ◽  
Binary Logistic Regression Analysis ◽  
African Countries ◽  
Content Type ◽  
The World Bank ◽  
Ict Adoption ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey

Purpose This study aims to investigate how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria. Design/methodology/approach The study used the World Bank Enterprise Survey data 2014 for Ghana and Nigeria with binary logistic regression analysis to achieve this. Four different innovations are modelled. They include: first, whether a firm has innovated based on producing a new product or significantly improved product; second, whether a firm has innovated in its methods of production or services; third, whether a firm has innovated in terms of its organisational structure; and fourth, whether a firm has introduced a new and improved marketing method. Findings The results show that the use of email, cellphone and website has a positive impact on the four types of innovations modelled. However, these effects varied markedly between Ghana and Nigeria. Firms’ spending on research and development (R&D), firm giving its employees the chance to develop their ideas and when firm competes with others; all positively impact the four types of innovations. Thus, the study recommends that policies should be geared towards making firms have more access to ICTs to enable them to be more innovative to serve clients and the economy. Originality/value This study differs by concentrating on how the adoption of ICTs could help firms to introduce innovations into their companies in two West African countries, namely, Ghana and Nigeria. Thus, it complements literature on informal firms’ innovation efforts in West Africa.

The role of informal competition in driving export propensity of emerging economy firms

2020 ◽  
Vol 40 (1/2) ◽  
pp. 184-203 ◽  
Author(s):  
Rouhin Deb ◽  
Harsh Vardhan Samalia ◽  
Santosh Kumar Prusty
Keyword(s):  
World Bank ◽  
Emerging Economy ◽  
Data Set ◽  
Content Type ◽  
The World Bank ◽  
The World ◽  
World Bank Enterprise Survey ◽  
Primary Relationship ◽  
Enterprise Survey

Purpose Competitive pressure from informal firms has always been a threat to the formal enterprises. However, the strategic choices a firm makes to deal with such competitive pressures still remain under-explored. The purpose of this paper is to examine the influence of informal competitive pressures in driving export propensity of formal firms. Design/methodology/approach The paper is based on a standard error logistic model, and the model takes into account the contingent relationships along with the primary relationship. The authors draw the sample of 9,812 manufacturing firms spanning across the Indian sub-continent from the World Bank enterprise survey conducted in the year 2014. Findings The empirical results indicated that the level of competition from informal firms is positively associated with the propensity to export. The primary relationship is also affected by various contingent factors such as regulatory obstacles, bribery and new product development. Research limitations/implications Although the World Bank enterprise survey data provide a broad coverage, the study warranted few proxy measures in order to operationalize formal competition as it was not captured directly in the concerned data set. Practical implications The analysis demonstrates that informal competition has direct effect on the firm’s propensity to export. The findings indicate that export is an attractive action alternative for firms facing informal completion in an emerging economy. The results further indicate that this effect strengthens as institutional factors such as regulatory obstacles and bribery increase. Social implications The paper is an attempt to alter the prevailing negative view on informality. The findings indicate that informal competition spurs competitiveness in the formal sector indicating its positive role in the economic growth of the nation. Originality/value The paper takes cue from attention-based view of the firm and the institutional escapism logic to affirm the role of informal competition and various contingent institutional and strategic factors in driving export propensity.

scholarly journals Cross-cultural collaboration for inclusive global value chain: a case study of rattan industry

2019 ◽  
Vol 15 (1) ◽  
pp. 149-170 ◽  
Author(s):  
Aluisius Hery Pratono
Keyword(s):  
Technology Transfer ◽  
Multinational Corporations ◽  
Value Chain ◽  
Cross Cultural ◽  
Global Value Chain ◽  
Social Mechanism ◽  
Content Type ◽  
The Social ◽  
Innovation And Technology

Purpose The purpose of this paper is to understand how the cross-cultural collaboration between developed market and emerging economies promotes an inclusive global value chain (GVC) through innovation and technology transfer. Drawing on global rattan industry, this paper identifies the three typologies and social mechanism of cross-cultural collaboration in GVC. Design/methodology/approach This study uses a qualitative method with a case study of rattan industry. The case study analysis covers the linkages between upstream industries in emerging economies and downstream industries in developed countries. Findings The result shows that innovation and technology transfer play an essential role in the cross-cultural collaboration through presenting the creative value-adding process beyond the simple trade of rattan. This study identifies the social mechanism of cross-cultural collaboration in three GVC typologies of rattan industry. Research limitations/implications The study was undertaken between 2015 and 2017. The observed value chain in rattan industry context demonstrates the selected business network from Indonesia to the European countries. Practical implications There were some activities that worked well for decades, such as creative innovation and technology transfer from multinational corporations to small businesses. The initiative to promote brand seemed to work less well for the local designers in developing countries from being part of the GVC. The creative innovation and technology transfer from multinational corporations to rattan farmers continued to struggle. Originality/value This study draws a distinction between the typologies of GVC, where cross-cultural collaboration has developed slowly and those where it comes about quickly. This extends the discussion about creative value between players in developed and developing countries, including the social mechanism of cross-cultural collaboration in GVC.

Innovation and institutions’ quality: a comparative study between countries

2020 ◽  
Vol 12 (2) ◽  
pp. 169-185
Author(s):  
Marcelo Koji Kawabata ◽  
Alceu Salles Camargo Junior
Keyword(s):  
Foreign Direct Investments ◽  
Content Type ◽  
Government Effectiveness ◽  
Business Environments ◽  
Innovation Activities ◽  
Regulatory Quality ◽  
The World Bank ◽  
Global Innovation ◽  
The Relationship

Purpose Innovation has been considered as an essential activity for companies to compete in modern and dynamic business environments. For the nations, innovation is considered a fundamental key activity for sustaining economic growth and competitive advantage over other countries. This paper aims to achieve a better understanding of the relationship between the quality of a country’s institutions and its levels of innovation activities and results. Design/methodology/approach Controlling for the effects of the efforts and investments in research and development (R&D) and the foreign direct investments (FDI), this work proceeds to regression analysis to obtain the association between the quality of countries’ institutions and their innovation activities. Data was obtained from the Global Innovation Index (GII) for innovation activities and the Worldwide Governance Index, of the World Bank, for the quality of institutions for 127 countries. Findings The results show that the effectiveness of public administration and the regulatory quality are the quality of institution variables associated with the innovation activities. Also, this paper obtained a clustering of countries with a rank regarding not only innovation activities but also the conditions of the institutions’ quality, based on government effectiveness, regulatory quality, R&D, FDI and GII. This new compounded classification divided the 127 countries into three clusters – mature innovators, fresh innovators and structuring for innovation. Originality/value New forms of innovations’ ranking viewing can help to understand the conditionings that enhance countries’ and institutions’ competitiveness.

Empowerment or exploitation: the case of women employment system in India's textile and clothing industry

2014 ◽  
Vol 4 (8) ◽  
pp. 1-10
Author(s):  
Senthil Kumar
Keyword(s):  
Human Rights ◽  
Corporate Social Responsibility ◽  
Value Chain ◽  
Clothing Industry ◽  
Labor Rights ◽  
Employment Practices ◽  
Content Type ◽  
Employment System ◽  
Corporate Social ◽  
The Relationship

Subject area Governance challenges in reverse value chain. Study level/applicability Women employment system in textile and clothing industry. Case overview The textile and clothing firms, often frustrated by frequent labor issues, used an innovative employment scheme – Sumangali scheme – to employ young female workers from poor families in rural areas, aged between 18 and 25 years, as apprentices for three years who would stay in dormitories located in the vicinity of the factories, draw low wages with minimum benefits. But the scheme was criticized by labor unions and Europe- and US-based non-governmental organization (NGOs) on the grounds of alleged violation of labor rights such as freedom of association, freedom of movement, exploitative working conditions, low wages with minimum or no benefits, long working hours and abusive supervisors. Their public campaign against the alleged employment practices has put tremendous pressure on the global buyers to take steps to ameliorate the situation. In the wake of campaign by NGOs, few buyers have even terminated the relationship with the manufacturers. Others have warned action against those erring manufacturers. The actions by global buyers, NGOs against some of the women employment practices raised several questions in the minds of manufacturers. They were wondering why US- and Europe-based NGOs were up in arms to dump an employment scheme unmindful of socio-economic realities in India? Is it a clever ploy that developed nations use some private, voluntary, corporate social responsibility norms to stop companies purchasing textile and clothing products from a developing country like India on the grounds of violation of labor rights? As per the International Labor Organization (ILO) Convention No. 81, it is the responsibility of central/state governments to inspect and monitor labor employment practices in an industry. Then why NGOs and other private groups volunteer to become watch dogs of labor practices and launch campaigns against mills? Would it not undermine the role of government in ensuring industrial harmony? Even if NGOs' actions are justified on the grounds of moral and ethical principles, what role should they play when it comes to management–worker relationship? In the Indian context, only the government can interfere if the relationship turns sour? Should NGOs need to use a different set of ethical standards which are more relevant and contextual to the socio-economic environment in India? Expected learning outcomes To understand evolution of apparel global value chain and workforce development challenges in India; to explore the link between consumer activism and corporate social responsibility; to explore the challenge of addressing issues such as alleged human rights violation and labor exploitation by independent suppliers located in India; to explore the challenges faced by global buyers in contextualizing, operationalizing and realizing certain human rights along the supply chain located in India; and to explore sustainability challenges of women employment in textile and clothing mills in India. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Social implications Sustenance of women employment system in India's textile and clothing industry and its associated challenges.

scholarly journals South African firm-level evidence of the links between finance and efficiency

2012 ◽  
Vol 5 (1) ◽  
pp. 271-286
Author(s):  
Waldo Krugell ◽  
Marianne Matthee
Keyword(s):  
South Africa ◽  
South African ◽  
Access To Finance ◽  
Firm Level ◽  
The World Bank ◽  
Using Data ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
Lower Capacity ◽  
Different Sources

Small and medium-sized enterprises are often seen as drivers of economic growth and development by generating employment opportunities. However, for SMEs to be successful they need finance. Access to finance has been found to be a major obstacle to SMEs’ ability to do business in South Africa. This paper takes a closer look at firms, their access to finance and output per worker in South Africa, by using data from the World Bank Enterprise Survey 2007. The results show that firms that are financially constrained are more vulnerable to shocks and competition, and are weaker contributors to employment creation and growth. These firms are typically small and less established. They hold less inventory, have lower capacity utilisation and are unlikely to be exporters or to introduce new products in response to competition. The results from the regression model confirm that access to finance and different sources of finance are drivers of productivity at firm level.

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