Firm Foundations of Growth (e-book) (used book) | bookbook.eu

Description

Productivity growth in the East Asia and the Pacific (EAP) region has slowed during a period of rapid global technological change. The most productive firms in EAP -- "the national frontier" -- are falling further behind the most productive firms in the world -- "the global frontier" -- in the digital-intensive sectors which are at the forefront of innovation. The poor performance of the national frontier matters because these firms account for a large share of output and jobs, and facilitate the diffusion of better technologies to other domestic firms. Firm-level analysis reveals that impediments to competition are inhibiting the incentive to innovate, especially for the frontier firms, and preventing the reallocation of resources towards more productive firms. And weaknesses in human capital and infrastructure are limiting the capacity to innovate. Policy makers must first stop doing harm and eliminate the impediments to competition. They must also support the general good by encouraging investment in human capital and infrastructure. Synchronizing reforms will help reap the synergies between enhanced human capital, infrastructure and competition.