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This paper addresses several shortcomings in the productivity and markup estimation literature. Using Monte-Carlo simulations, the analysis shows that the methods in Ackerberg, Caves and Frazer (2015) and De Loecker and Warzynski (2012) produce biased estimates of the impact of policy variables on markups and productivity. This bias stems from endogeneity due to the following: (1) the functional form of the production function; (2) the omission of demand shifters; (3) the absence of price information; (4) the violation of the Markov process for productivity; and (5) misspecification when marginal costs are excluded in the estimation. The paper addresses these concerns using a quasi-maximum likelihood approach and a generalized estimator for the production function. It produces unbiased estimates of the impact of regulation on markups and productivity. The paper therefore proposes a work-around solution for the identification problem identified in Bond, Hashemi, Kaplan and Zoch (2020), and an unbiased measure of productivity, by directly accounting for the joint impact of regulation on markups and productivity.

Competition Policy --- Enterprise Development and Reform --- Legal Regulation and Business Environment --- Markov Process --- Markups --- Private Sector Development --- Production Function --- Productivity --- Quasi-Maximum Likelihood --- Regulation

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In most countries in Africa, the informal sector is large and exhibits low levels of productivity compared to the formal economy: informal firms are typically small, inefficient, and run by entrepreneurs with low levels of education. This paper presents novel representative firm-level data collected on informal firms in the three largest cities of Mozambique, as well as data of microenterprises, formally registered businesses with less than 5 employees, the segment of the private sector that compares best to informal firms. Compared to formal microenterprises, informal firms sell about 14 times less, make 17 times lower profits and are 2-3 times less productive. Almost two-thirds (61 percent) of these performance gaps can be explained by differences in firm characteristics: informal firms are smaller and have limited skills, adapt fewer good business practices, use less capital and production inputs and are less likely to have access to finance. The rest of the productivity gap is explained by differential returns. Despite this "duality" between formality and informality, there is nevertheless a small but significant group of informal enterprises (7.6 percent of informal firms, representing 10.6 percent of employment in the informal sector) that in their characteristics and productivity levels are similar to formal microenterprises. Policies should take this heterogeneity into account.

Access To Finance --- Business Registration --- Enterprise Development and Reform --- Informal Sector --- Informality --- Legal Regulation and Business Environment --- Private Sector Development --- Private Sector Economics --- Small and Medium Size Enterprises --- Taxation

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This paper investigates to what extent media impacts political decisions. A viable practical approach to test the relationship between mass media and political actions is through the use of the World Bank's Doing Business data, specifically, by assessing local media coverage of Doing Business and implementation of business regulatory reforms. The tested hypothesis is that countries with higher media coverage of Doing Business tend to carry out more business regulatory reforms, assuming one- and two-year lags between media coverage and reform implementation. To achieve this objective, the study put together a comprehensive data set that encompasses country-specific local media coverage of the Doing Business report in 190 economies. The study finds that local media coverage of Doing Business has a significant influence on regulators' actions. First, the analysis shows that the number of local media articles tends to increase the probability of whether a country does any reform. Second, countries with greater media coverage of Doing Business indicators tend to have higher numbers of implemented reforms.

Broadcast and Media --- Business Environment --- Business Reform --- Corruption Perception Index --- Development --- Doing Business --- Enterprise Development and Reform --- Firm Entry --- Freedom of the Press --- Information and Communication Technologies --- Legal Regulation and Business Environment --- Media --- Media Coverage --- Political Action --- Private Sector Development --- Private Sector Economics --- Public Sector Development --- Regulation