rafmacalaba/datause-encoder-data huggingface dataset:
these reasons, in her survey of the literature on gender and labor market outcomes, Bertrand (2011, p. 1544) states, “whether this body of psychological research will be more than just a decade-long fad and have a long-lasting impact on how labor economists think about gender differences will crucially depend on further demonstration of its economic significance in real markets.” When facing competition in doing real-world jobs, for instance, women have much more time to plan, receive feedback, and they may be thoroughly trained in the tasks, and for which they have strong confidence, then the apparent disadvantage of women in confronting competition may disappear (Lavy 2012).

In this paper, we use a worldwide sample of firms to study how female-headed firms fare relative to male-headed firms in productivity and its growth, and how the disparity is related to the underlying cultural, institutional, and business environments. Most of the existing studies focus on developed countries and on outcomes related to accounting and stock market performance, corporate financial structure, and risk taking. However, we know little about how female business leadership affects firms’ productivity levels and growth, and whether female business leadership interacts with the local cultural, institutional and business environment in shaping firm outcomes.

Understanding the role of female business leadership in productivity is important. After all, an economy’s long-term growth depends crucially on its productivity level and its sustainable growth (Syverson 2011). By focusing on productivity, we put our emphasis squarely on the key determinants of long-term prosperity. And by focusing on the role of female business leadership in a developing country, we focus on a key area of untapped potential for long-term growth.

We find a significant female leadership productivity disadvantage: conditional on a rich set of conventional controls, female-headed firms exhibited lower productivity level by around 15 percentage points, and labor productivity growth by around 2 percentage points, and these disadvantages are more pronounced in manufacturing than in services, with complete disappearance in service sectors. The disadvantage is also more pronounced in small and medium enterprises (SMEs). Two contexts amplify the female leadership disadvantage: when personal networks loom large, such as in places that use extensive trade credit networks, where bank credit is important, or that do not have good internet 3
# **1. Introduction**

The Zambian economy has enjoyed rapid economic expansion throughout the last decade, following a long period of low growth and declining per capita income since independence in 1964, with growth cycles driven by international commodity-price fluctuations (World Bank, 2011). After 1996 the economy began to grow again, albeit slowly, as a result of a relatively stable macroeconomic environment and improved macroeconomic policies. The economy grew at a faster pace in the 2000s following the privatization of the mining industry and a return to fiscal discipline and low inflation. However, real GDP per capita in 2010 was still equivalent to just 69% percent of GDP per capita in 1965. In addition, higher recent growth rates have not translated into higher living standards, and Zambia‘s rank in the 2011 UN Human Development Index was 150 out of the 169 countries assessed.

The recent period of sustained economic growth also seems to have had a limited impact on poverty reduction. This is due to the fact that growth has been narrowly focused on capital-intensive industries (especially mining and construction) and on the service sectors (tourism and banking), and has had little impact on employment or wages in the labor-intensive rural economy, where the majority of the poor and very poor are employed (World Bank 2011). However, the moderate reduction in overall poverty observed in the past decade has been accompanied by more substantial improvements in social indicators, though at an uneven pace. There has been continued progress in education indicators, including rising school enrollment rates at the primary and secondary levels, with more modest improvements observed in the youth literacy rate (see Table 1). However, significant challenges still remain, including overcrowded classrooms and limited access to education in rural areas. There have also been some improvements in health outcomes, including a reduction in the under-5 mortality rate and a decline in maternal mortality rates, but Zambia is still not likely to meet the 2015 Millennium Development Goals (MDGs) for the health sector. The prevalence of HIV remains at about 13.5 percent for Zambians aged 15-49.

Table 1: Zambia: Selected Social Indicators

||L|atest single ye|ar|
|---|---|---|---|
||1999-2002|2003-2006|2007-2010|
|Primary school enrollment (% net)|72.5|94.2|91.3|
|Progression to secondary school (%)|55.2|58.3|66.1|

2
67

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Sánchez-Martín, Escribano and de Arce, 2014. “How regional integration and transnational energy networks have boosted FDI in Turkey” energy corridor through Anatolia. Therefore, we argue that the evolution of relations with the EU will affect decisions taken by foreign investors in the energy sector in Turkey. Worsening EU membership prospects may delay domestic reforms and difficult the way to European multinationals trying to participate in the Turkish energy market in the future.

# **6. Conclusion and way forward**

The Turkish economy has been characterized as suffering from difficulties to attract foreign direct investment. Net FDI inflows averaged 2.7 % of the Turkish GDP in 2005-2008, and 1.2% of GDP in 2009-2013, compared to less than 0.5% of GDP in 1990-2004. According to the literature, macroeconomic and political instability were probably discouraging foreign investors, as sudden stops were frequent in the 1990s in a context of capital account liberalization.

How can the boost in FDI inflows observed in 2005 be explained? A recent and increasingly predominant strand of studies argue that, apart from improved economic and political stability achieved over the last decade, the beginning of accession negotiations with the EU in 2005 has significantly contributed to boost FDI. Most of the existing literature tries to "capture" this "EU accession" effect using a dummy variable in cross country regression or gravity models. This paper, in turn, complements existing empirical evidence by opening this "black box" and trying to understand which factors and which concrete policy actions explain the recent increase in FDI.

In this sense, we use the qualitative discussion framework elaborated by Blomstrom and Kokko (1997) to assess the potential implications of free trade agreements on FDI. We argue that the Customs Union Treaty for industrial products, signed between Turkey and the EU in 1996, was successful in achieving its aim of helping increase bilateral trade flows, but did not entail a significant increase in FDI inflows because it did not imply strong environmental and policy changes for investors, and there was a five-year margin for implementation. In turn, the official start of EU accession negotiations in 2005 encompassed a wide set of reforms in a number of chapters of the _acquis communitaire_ that were directly or indirectly affecting the business climate.

In addition, we argue that both developments in accession talks and foreign policy decisions assumed by Turkey will dynamically shape the impact of EU integration on FDI attraction: the same way the beginning of accession negotiations with the EU functioned as a market signal that helped to achieve yearly FDI to GDP inflows six time higher in 2005-2008 than in previous years (Sayek, 2007), the global economic slowdown starting in 2009 and increasing _Euro-skepticism_ may mitigate this "EU effect" in the following years. According to a survey by the International Investors Association (YASED, 2013), local 26
Several reasons have been proposed to explain why the cross-economy and individuallevel studies have not shown a consistently positive causal relationship between life expectancy and years of schooling, despite the positive results for lifetime earnings. One reason is that better child health signaled by increased life expectancy at birth raises the productivity of child labor as well as later adult labor, even without more years of schooling. This is consistent with the positive impact on literacy that Bleakley (2010a), Cutler et al. (2010) and Lucas (2009) find. Another possible reason is suggested by Pitt et al. (2012): In economies where returns to schooling are limited, the positive effect of better health on ability to perform physical labor (“brawn”) is enough to increase lifetime earnings without raising time in school.

Lorentzen, McMillan and Wacziarg (2008) use changes in adult mortality rates rather than in infant and child mortality or life expectancy at birth to measure an economy’s health status. They argue that premature death of an adult destroys that person’s accumulated human capital, incurring a more immediate and significant economic loss than would an infant death. In both their OLS and structural models, the authors find a significant effect of adult mortality on human capital investment, measured as enrollment rates at the secondary level, but the higher enrollment rates do not translate into faster economic growth. To deal with the problem of endogeneity, they use three sets of exogenous variables (malaria ecology, climate variables and geographic features) and a 3SLS methodology which uses excluded variables as instruments.

In contrast, Hazan (2012) found a significant relationship between life expectancy at birth and years of schooling but not between life expectancy at age 5 and years of schooling. In crosseconomy studies, life expectancy at birth is the preferred measure both because mortality rates are higher for newborns and infants than for older children and because declines in infant and child mortality are thought to result more from exogenous health interventions than from 6
Table 12: Simulation Results - Long Run Effects (Percent Change)

||Change in|Wage, _β_ =|0_._90||
|---|---|---|---|---|
||**_Aggr/Cons_**|**_Manuf_**|**_NonTraded_**|**_Traded_**|
|_White Collar_|1.26|0.77|1.44|1.49|
|_Tech/Sales_|1.62|0.89|1.78|1.62|
|_Service_|2.76|0.75|1.96|3.00|
|_Craft_|1.81|0.86|1.77|2.05|
|_Laborer_|2.08|1.16|2.43|2.31|

Change in Welfare, No-College, _<u>β</u>_ = 0 _._ 90

||**_Aggr/Cons_**|**_Manuf_**|**_NonTraded_**|**_Traded_**|
|---|---|---|---|---|
|_White Collar_|1.23|0.99|1.20|1.29|
|_Tech/Sales_|1.24|0.95|1.21|1.24|
|_Service_|1.21|0.85|1.21|1.30|
|_Craft_|1.21|0.76|1.22|1.31|
|_Laborer_|1.23|0.76|1.22|1.31|

Change in Welfare, College, _<u>β</u>_ = 0 _._ 90

||**_Aggr/Cons_**|**_Manuf_**|**_NonTraded_**|**_Traded_**|
|---|---|---|---|---|
|_White Collar_|1.24|0.86|1.24|1.31|
|_Tech/Sales_|1.26|0.86|1.25|1.32|
|_Service_|1.37|0.79|1.30|1.31|
|_Craft_|1.26|0.93|1.26|1.28|
|_Laborer_|1.28|1.02|1.27|1.28|

32
How might one measure the effect of child labor on schooling? A common method is to compare the educational attainments of children who work with those who do not. From such comparisons, Psacharopoulos (1997) concludes that child labor leads to two years less schooling on average (using data for Bolivia and Venezuela). This suggests that child labor entails a large cost to childrens' future welfare. However, the possibility of selection bias through the choices made by parents clouds such comparisons. The parents of children who currently work may well send their kids to school less than do other parents even when work is not an option.

Tf one could do an experiment that created an exogenous increase in schooling, then one could simply see how much child labor fell as a consequence. An exogenous decrease in the price of schooling would qualify for such an experiment. An important element in the price of schooling is the wage rate for child labor. However, this is also the price of leisure (assuming that parents are free to allocate their children's time; we return to that assumption later). Thus disentangling the own price effect from the cross-price effect is problematic using wage data.<sup>6</sup> One might look for other indicators of school price. The presence of a school in the village of residence is one possibility (Rozenzweig, 1982). Another is the distance or travel time to the nearest school (Grootaert, 1998) or average out-of-pocket expenditures on schooling in the area of residence (Cartwright, 1998). On _a priori_ grounds it is unclear just how well such variables measure the price of schooling, and the usual concerns arise about attenuation bias due to the use of weak proxies. The endogeneity of both access and average school expenditures also raises concerns, since these measures may well pick up spurious geographic effects. The existing evidence for effects of school price on child labor is mixed, although it is recognized in the 6 To add to the difficulty, wages for child labor are rarely collected (or at least in the same surveys for which other relevant data are required), or are badly measured.

_5_
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- Kazibwe, J., Gheorghe, A., Wilson, D., Ruiz, F., Chalkidou, K., and Chi, Y.-L. (2022). The use of cost-effectiveness thresholds for evaluating health interventions in low-and middleincome countries from 2015 to 2020: a review. _Value in Health_ , 25(3):385–389.

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- Kroenke, K., Strine, T. W., Spitzer, R. L., Williams, J. B., Berry, J. T., and Mokdad, A. H. (2009). The PHQ-8 as a measure of current depression in the general population. _Journal of Affective Disorders_ , 114(1-3):163–173.

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24
|**Box 11**<br>**Performance agreement for senior civil servants in the United Kingdom**|
|---|
|The annual performance agreement for senior civil servants contains both the following:<br>•<br>Up to four key personal business objectives or targets which clearly reflect departmental<br>priorities for the year ahead and define the in‐year deliverables and the way in which<br>performance against these targets will be measured. Personal business objectives or targets<br>should be stretching, tightly defined and SMART (Specific, Measurable, Agreed, Realistic and<br>Timerelated) with measures for achievement. Where targets extend beyond the appraisal year,<br>appropriate in‐year milestones should be devised. Objectives should anticipate foreseeable<br>change. Amendments in‐year should only be made in the event of significant shifts in business<br>priorities<br>•<br>How the job is to be performed identifying the key competencies, standards and behaviors<br>expected for the individual’s current responsibilities in the year ahead, especially in relation to<br>leadership and broader corporate objectives, including diversity. These should take into<br>account the individual’s development needs.|
|**_Source:_**United Kingdom, Senior Civil Service, Guide to Performance Management and Reward in<br>the SCS, March 2004.|

Finally, there have been a number of innovative proposals to apply tariff regulation to SOEs. This approach, pioneered by Chile, is to subject government‐owned infrastructure and utility companies to the same kind of tariff regulation imposed on privately owned monopolies. Chile corporatized its publicly owned water companies and regulated them as if they were private monopolies beginning in 1989. Chile saw corporatization and regulation as steps to prepare the industry for eventual privatization. The Chilean system of utility regulation is unusual in that the procedures the regulatory agency must use are set out in law at a level of detail similar to a performance contract (for more details, see Gomez‐Ibanez, 2003). Performance improved significantly, but not enough to prevent the government from privatizing the water companies. Chile’s experience inspired the regulation of government‐owned utilities in Australia, Scotland and South Africa. The Scottish case is reported in Box 12.

More generally, monitoring processes that are not backed by an institutional role specifically assigned to that task (i.e., a regulatory body), and so are undertaken within inner‐government, tend not to be as transparent as regulatory processes. It is also easier to apply pressure on utility managers to improve performance if there is clear evidence of declining performance in the provision of operational and maintenance services through time arising from information being available for comparative purposes. The benefits of information and transparency should not be undervalued and can lead to considerable performance improvements.

20
# WPS3623

## **THE IMPACT OF REGULATION ON GROWTH AND INFORMALITY**

**CROSS-COUNTRY EVIDENCE**<sup>*****</sup>

Norman V. Loayza Ana María Oviedo _The World Bank University of Maryland_ Luis Servén _The World Bank_

* This research has been supported by the World Bank’s Latin America Regional Studies Program.  We are very grateful to Basudeb Guha-Khasnobis, Patricia Macchi, Janis Vehmaan-Kreula, and participants in the EGDI-WIDER Conference on the Informal Sector (Helsinki, 2004) for useful comments.
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