Do Business-Friendly Reforms Boost GDP?
11T12:05:31Z February 2020
We use the time series variation in the World Bank’s “distance to frontier” estimates of the ease of doing business to assess the effects of changes in this variable on real GDP per capita. The use of Vector Autoregression techniques allows us to identify shocks to the ease of doing business that are initially uncorrelated with GDP, thus addressing an important endogeneity problem that affects the cross-sectional literature on this topic. The results are surprising. We report a robust finding that improvements to the ease of doing business have at least a temporary negative impact on GDP and find little evidence for a positive effect in the years following these improvements.
Type of Material
University College Dublin. School of Economics
UCD Centre for Economic Research Working Paper Series
Copyright (Published Version)
2019 the Authors
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License