rafmacalaba/datause-encoder-data huggingface dataset:
**_25_**

quality of the bankruptcy system, not the laws themselves. Currently, there do not exist cross-country measures of the speed, transparency, and fairness of bankruptcy systems.

The third measure of the legal rights of credits is **SECURED 1,** which equals one if secured creditors are ranked first in the distribution of the proceeds that result from the disposition of the assets of a bankrupt firm. **SECURED I** equals zero if non-secured creditors, such as the government or workers get paid before secured creditors. In cases where SECURED1 equals zero, this certainly reduces the attractiveness of lending secured credit. SECURED **1** should be positively correlated with activities of intermediaries engaged in secured transactions, holding everything else constant.

CREDITOR is a cumulative index of these creditor rights indicators and equals CREDITOR= **SECURED I - AUTOSTAY - MANAGES.** CREDITOR takes on values between 1 (best) and -2 (worst).<sup>2</sup> 1 One would expect countries with higher values of CREDITOR to have stronger creditor rights and better-developed financial intermediaries, all else equal.

Table **6** gives summary statistics on CREDITOR. As shown there is substantial cross-country variation in CREDITOR, where the maximum value is **1,** the minimum value is -2, and the standard deviation is about **1.** Brazil, Colombia, France, Mexico, Peru, and the Philippines (all countries with a French legal origin) are countries where CREDITOR=-2, indicating that their legal systems do not stress the rights of creditors. In contrast, the legal codes of **Egypt,** Hong Kong, India, Indonesia, Israel, Korea, Malaysia, Nigeria, Pakistan, Singapore, Thailand, United Kingdom, and Zimbabwe stress the rights of creditors, such that CREDITOR= 1. CREDITOR is an indicator of legal codes, however, it does not incorporate information regarding enforcement.

_2. Enforcement_

> 21 We could have redefined **AUTOSTAY** and **MANAGES** such that values of one indicated stronger (instead of weaker) creditor rights. This would have produced values of CREDITOR between 0 and **3** and would not have altered the results. We did not do this for consistency: the variables in this paper are defined the same as the variables in LLSV **(1997,1998).**
Garcia, Gillian, 1999, “Deposit Insurance: A Survey of Actual and Best Practices”, IMF Working Paper No. 99/54.

Haber, Stephen, 2006, “Banking With and Without Deposit Insurance: Mexico’s Banking Experiments, 1884-2004”, World Bank mimeo.

Honohan, Patrick and Fernando Montes-Negret, 2006, “Deposit Insurance Experiences: China versus Russia”, World Bank mimeo.

Honohan, Patrick and Daniela Klingebiel, 2003, “ Controlling Fiscal Costs of Banking Crises,” _Journal of Banking and Finance_ 27, 1539-1560.

Hovakimian, Armen, Edward J. Kane, and Luc Laeven, 2003. “How Country and SafetyNet Characteristics Affect Bank Risk-Shifting,” _Journal of Financial Services Research_ 23(3), 177-204.

Huizinga, Harry, 2006, “The EU Deposit Insurance Directive: Does One Size Fit All?” World Bank mimeo.

Kane, Edward J. 1995. “Three Paradigms for the Role of Capitalization Requirements in Insured Financial Institutions.” _Journal of Banking and Finance_ 19, 431-59.

Kane, Edward J., 2000, Designing Financial Safety Nets to Fit Country Circumstances,” World Bank Working Paper.

Kane, Edward J., and Berry K. Wilson. 1998. “A Contracting-Theory Interpretation of the Origins of Federal Deposit Insurance.” _Journal of Money, Credit, and Banking_ 30, 573-595.

Kane, Edward J., and Daniela Klingebiel, 2004. “Alternatives to Blanket Guarantees for Containing a Systemic Crisis,” _Journal of Financial Stability_ , 1(Sept.), 31-63.

Kroszner, Randall, 2006, “Political Economy of Deposit Insurance in the United States,” World Bank mimeo.

Laeven, Luc. 2002. “Bank Risk and Deposit Insurance.” _World Bank Economic Review_ 16, 109-137.

Laeven, Luc. 2004. “The Political Economy of Deposit Insurance”. _Journal of Financial Services Research_ 26, 201-224.

Laeven, Luc, 2006, “Pricing of Deposit Insurance”, World Bank mimeo.

Levine, Ross, 1997, “Financial Development and Economic Growth: Views and Agenda,” _Journal of Economic Literature_ 35, 688-726.

24
# **1. Motivation**

The international community has long recognized the important role of the small and medium enterprise sector (SMEs) in the economies of the developing world. Furthermore, policymakers all over the world worry with how to foster productivity and growth among this group of firms. Moreover, in a modern economy, the investment in human capital is crucial to foster technological adoption and, thus, achieve higher productivity growth. This paper explores a large firm level survey across 99 countries to document the differences in the job training provided by employers across firm size. Our findings show that a strong and positive correlation across the investment in job training and firm size is a robust empirical finding within and across countries with different institutions and income levels. However, our data do not support the view that this difference is fully explained by market imperfections and institutional failures impeding SME development. Rather, they are supportive of SMEs having a smaller expected rate of return from this investment. Finally, our findings call for some caution when designing pro-SME policies tackling these imperfections to effectively remove this investment gap. Policies addressing market imperfections will be most effective when targeting all firms, irrespective of firm size.

The importance of the SME sector throughout the developing world is undeniable. First, SMEs account for more than half of manufacturing employment in many countries (e.g., Ayyagari et al, 2007). Second, there is also a growing recognition of the role that SMEs play in sustained global and regional economic growth, higher employment and poverty alleviation. Moreover, few economists disagree that SMEs face greater constraints to their growth than large firms. Access to finance usually ranks high among these constraints and is often pointed out as the main reason behind SMEs having a smaller capacity to invest. However, there is little systematic research supporting the various policies in support of SMEs primarily because of the lack of data. Nevertheless, documenting and understanding the main binding constraints to firm growth in developing countries is crucial for the design of effective policies that promote long run productivity growth by the private sector.

The investment in human capital has been widely documented as a core component of each individual’s human development, firm growth and aggregate 2
**Table 5. Other measures of formality**

|**Dependent variable**|**Log revenue**|**Years in business**|**Pseudo R2**|**# obs**|
|---|---|---|---|---|
|Permanence of work site|.538<br>(31.3)|.009<br>(4.97)|0.162|6066|
|Families/individuals only main|-.277|.007|0.048|8870|
|clients|(22.9)|(4.63)|||
|Families/individuals only main|-.208|-.001|0.176|8868|
|clients (adding industry<br>dummies)|_(15.1)_|(0.63)|||

Probit regressions. Absolute values of z statistics in parentheses. The standard errors have been corrected for arbitrary forms of heteroskedasticity.

**Table 5.A. Other measures of formality** (difference in probabilities from a one unit change in the regressor)

|**Dependent variable**|**Log revenue**|**Years in business**|
|---|---|---|
|Permanence of work site|.214|.004|
|Families/individuals only main<br>clients|_-.105_|.003|
|Families/individuals only main<br>clients (adding industry dummies)|-.078|-.0004|

30
21

# _2) Second sub-period (7/28/95 to 7/12/96):_

_Sample: 7/28/95 - 7/12/96 Included observations: 51_ _Test assumption: No deterministic trend in the data Series: MEXDISI_ **_POLDIS_** _Lags interval: 1 to I_ Likelihood 5 Percent I Percent Hypothesized Eigenvalue Ratio Critical Value Critical Value No. of CE(s) 0.185747 11.99515 19.96 24.60 None 0.029278 1.515477 9.24 12.97 At most I

## **L.R. rejects any cointegration at 5% significance level**

Unnormalized Cointegrating Coefficients: MEXDISI POLDIS C 0.001493 -0.001499 0.176611 -0.000671 7.73E-05 0.044013 Normalized Cointegrating Coefficients: I Cointegrating Equation(s) MEXDISI POLDIS C 1.000000 -1.003506 118.2626 (0.20818) (93.4870) (Log likelihood -558.2001) _The null hypothesis of cointegration is not rejected in the first sub-sample, but_ **_it_** _is rejected on the second one._ Note also that, for the first sub-sample, the estimated coefficient on POLDIS is significantly greater than one. 21 We can reach two main conclusions from these results: _]) First, comovements were stronger during the high volatility period of the Mexican crisis._ In fact, we reject the null hypothesis of cointegration for the last year, when the crisis was perceived as overcome.

2) Second, the Mexican crisis has caused a change in the mean of the cointegration relation of approximately 550 bs.pts.. That is, _the crisis has had a strong permanent effect on the risk assessment on Mexico._ 21 To confirm the results, we perform the cointegration test on the original variable MEXDIS (instead of MEXDISI). The results of the cointegration tests for the two sub-periods - from 1/20/95 to 7/12/96 (78 observations), and from 7/28/95 to 7/12/96 (51 observations) - confirm that there is strong evidence of cointegration on the whole sample, while the variables are not cointegrated for the period 7/29/94 to 7/12/96 (the last year).
16 A major issue in public sector pay reform is that it influences not only the behavior of incumbent workers, but also the types of workers who select into public service in the future (for example, see Dal Bo, Finan, and Rossi, 2013; Banuri and Keefer, 2016; Hanna and Wang, 2017). The typical trade-off that raises concern is the possibility that higher wages attract more able, but less motivated workers. The same trade-off may emerge when health clinics that pay flat salaries, typical of most public clinics, change to piece rate contracts. We address this issue with an additional treatment, in which we assume that health care workers have a choice of contractual settings (for example, private clinics with variable pay, public clinics that retain flat salaries, and public clinics that shift to variable pay). Subjects can choose to undertake health care tasks under variable or salaried pay regimes. We compare the motivation and ability profile of workers who select one or the other.

One hundred health workers were randomly assigned to a treatment where they selected between one of two pay schemes: (a) a flat contract (salary) of 4,000 CFA, or (b) a variable pay contract (case piece rate) of 650 CFA per case. Health workers could choose the type of contract prior to engaging in the virtual clinic task. Hence, workers were asked to make this decision prior to exerting effort for the poor, but after the ability round. Therefore, workers had been exposed to the type of cases they would be asked to do and given information about the virtual clinic (in terms of differences between type X and type Y cases). They were then asked to choose their own compensation scheme, corresponding to a typical public sector pay scheme (flat salary) or a more high-powered scheme (piece rate). We then observe the motivation and ability profile of workers choosing the variable pay contract.

The overall structure of the experiment is displayed in figure 7. After health workers are given instructions and introduced to the two schools, we obtain incentivized measures of pro-poor preferences, and an incentivized measure of ability in the task. These are explained below. Then, health workers enter the “virtual clinic” with the video vignettes. Finally, an exit survey records health worker demographics and other preferences.

The sessions were conducted in February-March 2014. Each day health workers were invited to participate throughout the day (beginning at 11am). Health workers could participate in the experiment at any time during the day. Hence, our results reported errors clustered by day rather than by session, as sessions were not relevant for our setup.
**Figure 9. Aggregate Consumption Levels Increase as a Result of Higher Oil Revenue Which is Assumed Not To Be Invested**

<!-- Start of picture text --> 0.45 0.48<br>0.46<br>0.46<br>0.45 0.46<br>0.40 0.45<br>0.44<br>0.44<br>0.44<br>0.43 0.44<br>0.35 0.43<br>0.42<br>0.42<br>0.41 0.42<br>0.41<br>0.40<br>0.30<br>0.40<br>0.25<br>0.38<br>Oil revenue as a share of output<br>0.20 0.36<br>2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%<br>Workers' consumption<br>Retirees' consumption<br>Total consumption by period (right axis)<br>Consumption index<br>Consumption index<br><!-- End of picture text --> Source: Author’s simulations based on a general equilibrium OLG model calibrated for Brazil.

The simulations above incorporate an assumption that public saving out of oil revenue is zero. As a result, when oil revenue is transferred for consumption on a fraction of that is saved and invested (i.e. the fraction that workers decide to save out of their additional gross income). This assumption can be compared to a scenario where the government saves for example, 10 percent of its total (including PreSalt) oil revenue. Assuming a 10 percent investment share, and, thus, a 90 percent consumption share, means that the capital stock will not be crowded out — since, as illustrated above in Figure 7, it only takes 1 percent investment share to offset the crowding out of aggregate saving.

When the 10 percent investment share is combined with the share of gross income that workers decide to save out of the, now 90 percent, consumption share enhances overall capital accumulation, then the capital labor ratio will increase and exert upward (downward) pressure on wages (interest rate). As a result, such a government policy will have distributional implications. Workers will gain markedly by such a policy while retirees will gain less in terms of consumption possibilities. Recall that retirees, despite lower returns to their saving, will still receive a large share of the 90 percent of oil revenue that is transferred — and this share will not have to be spent on saving as for workers.

The result, as illustrated in Figure 10, is that workers now experience the largest increase in consumption compared to retirees — which is simply due to an asymmetric impact on wages and interest rates of the investment policy that increases the capital-labor ratio through enhanced capital accumulation. Figure 11 shows, to further substantiate this distributional impact, that income per capita now increases (while it fell with a policy of zero-investment out of oil revenue).

22
market. Therefore, the real exchange rate, or the relative price of exportables to noni-tradable prices are not relevant<sup>in this</sup> equation, since we are disaggregating exportables into different categories of exports. The effective exchange rate should then be employed, since it affects the decision whether to supply<sup>at</sup> home or abroad. There are both theoretical and empirical justification for including the effective<sup>exchange rate in the</sup> exports and import functions.

Furthermore, the homogeneity assumption embodied in the price ratio variables in imports and exports<sup>equations have long been</sup> questioned by various authors [Haynes<sup>and Stone (1983), Wilson</sup> and Takacs (1979)1. The weakness of this assumption is that<sup>it</sup> contains the influence of the two price<sup>variables to be equal in</sup> magnitude but opposite in sign (Murray<sup>and Ginman, 1976).</sup> In **the** study of import demand and export demand functions of 19 industrial countries, Warner and Kreinin<sup>(1983) found that it is</sup> not justified to employ a composite relative price variable; separation into its components yields more accurate results, because import and export unit value indexes and domestic wholesale price index are constructed with<sup>different weights,</sup><sup>**and**</sup> usually different formulas, the homogeneity<sup>constraint would be</sup> inappropriate in practice. In this paper, we choose to test the propriety of the homogeneity constraint by separating the composite relative prices.

The quantity of agricultural exports supplied varies in the opposite direction of the change in the<sup>current domestic price</sup> level of agricultural products. Furthermore, the one year lag of the quantity of agricultural exports supplied<sup>is also included as</sup> an explanatory variable to capture disequilibrium quantity adJustment. The share of agricultural products in GDP<sup>was first introduced in</sup> the agricultural exports supply equation to capture the<sup>output</sup> capacity, but the negative correlation<sup>was observed.</sup> The reason comes from the changing structure of the<sup>Thai economy.</sup> While the share of agricultural products in GDP is declining as Thailand approaches a NIC status, the export values of agricultural products are still increasing.

Instead, the agricultural export production capacity in this sector is represented by the aggregated value added of agricultural products and the value added of the remaining sectors excluding industry and services. While the former is endogenously determined from the production function in the model, the latter is an exogenous variable, representing the effect of the expanding role of the government<sup>in providing basic</sup> infrastructure facilitating the production, transportatiorn,<sup>and</sup> marketing of agriculture products.

Unlike the agricultural exports supply<sup>equation, the production</sup> capacity is represented by the share of industrial<sup>products in</sup> GDP. It should be noted that the high<sup>value of the estimated</sup> 12
29

**TABLE 1**

# **TRADE EXPOSURE AND MARKET SIZE IN COLOMBIA AND CHILE**

|**XYar**|<br>**ImRort S**<br>|**harea **<br>|**Export S**<br>|**hare**b<br>|Total Em<br>|olov.c<br>|<br>Plant S|ize**d**|
|---|---|---|---|---|---|---|---|---|
||Colomki|Chile|Colombia|Chile|Colombia|Chile|Colombi|a Chile|
|1977<br>|<br>.246<br> <br>||.100<br>||402.7||77.0||
|1978<br>|<br>.262<br> <br>||.088||410.7||79.0||
|1979<br>|<br>.250<br> <br>|.528<br>|.092<br>|.086<br>|<br>420.8<br>|229.0|78.7|55.6|
|1980<br>|<br>.328<br> <br>|.600<br>|.108<br>|.105|<br>419.8|209.8|77.2|56.4|
|1981<br>|<br>.363<br> <br>|.762<br>|.055|.060|<br>404.3|194.2|75.0|57.5|
|1982<br>|<br>.375<br> <br>|.758<br>|.053<br>|.088|<br>394.2|155.2|69.9|51.3|
|1983<br>|<br>.329<br> <br>|.637<br>|.047<br>|.088|<br>374.5|147.3|74.6|52.9|
|1984<br>|<br>.297<br> <br>|.762<br>|.047<br>|.081|<br>372.6|164.2|74.4|56.6|
|1985<br>|<br>.264<br> <br>|.701|.051<br>|.072|<br>360.0<br>|174.2|69.7|60.9|
|1986<br>|<br>.289<br> <br>||.061<br>||368.6||68.5||
|1987|<br>.287||.065||397.5||71.0||
|**Ave.**|.299|.678|.070|.083|<br>393.2|182.0|74.1|55.9|

- a Manufactured imports as a share of domestic manufactured output b Marnfactured exports as a share of domestic manufactured output i'otal manufacturing employment, in thousands Average number of workers per plant in the manufacturing sector
Finally, at the analytical stage, it is worthwhile to test several different estimation techniques to verify the robustness of the results. In certain cases, different techniques may potentially generate different results, whereas in other cases results may not differ regardless of the applied method. It is important to maintain flexibility in data collection to permit the application of several analytic techniques. In the case of Tocantins, it was worth the effort to find appropriate instruments to perform the IV estimation, which is based on completely different empirical settings from those of the DID estimators.

The present exercise demonstrated that impact evaluations of transport projects aimed at improving accessibility are feasible but difficult to implement. Looking ahead, the challenge of designing an impact evaluation methodology for projects that seek to improve major existing road works (such as rehabilitation and/or upgrading of national roads, which constitute an important part of the Bank’s portfolio in the transport sector) remains on the agenda.

# 8 Conclusion

Many rural residents still have only limited access to good road infrastructure in the developing world. A wide range of social and economic impacts can emerge from rural road development, from physical connectivity improvements (i.e., shorter distances and travel times) to long-term economic impacts, such as job creation and welfare improvement.

The current paper revisited the question of the economic and social benefits related to rural road development. Using household survey data from the State of Tocantins, Brazil, three different estimation techniques are applied to check the validity of the results: DID matching, DID regression, and IV estimators.

Overall, the analysis shows that improved rural road connectivity changed the population’s choices with respect to modes of transportation. Following the rural road intervention, members of the impacted communities increasingly began to use public buses and individual cars. Furthermore, evidence indicates that the project increased school attendance, particularly by girls. Although statistically weak in relative terms, the evaluation indicates that the project contributed to increasing household income and creating more agricultural jobs in certain regions. Because some impacts require longer gestation periods, follow-up surveys and analyses will be required to more precisely capture the values of the entire set of impacts.

31
bank financial institutions, we use data collected by Beck, Demirguc-Kunt and Levine (2000) on the amount of annual life insurance premiums collected divided by GDP. These data on stock markets and life insurance refer to the year-end 1994. We expect to find positive coefficients for both indicators as the more developed other parts of the financial sector are, the more competitive pressure there will be on the banking system.

We also control for the countries' general economic development, macro-economic stability and institutional framework as these can be expected to affect banking system performance. Others have, for example, found that banking system structure indicators have a less close relationship with competitiveness indicators in more developed countries (DemirgU9-Kunt, Laeven, and Levine 2003). As a proxy for the general level of development of the country, we use the logarithm of per capita GDP in 1995. We also expect that it will be less likely that a banking system will be more competitive when it is subject to high inflation as prices of financial services, such as interest rates, will be less informative. As an indicator for macro-economic stability, we use the inflation rate in 1995. Both per capita GDP and inflation come from the World Development Indicators (WDI). Finally, we want to investigate the role of the quality of the country's overall institutional framework, especially the degree of protection of property rights, which has been found to be an important foundation for a well-functioning financial system. For this, we use an index of property rights from the Economic Freedom Index, used by many others, with lower score indicating better protection of property rights. The index is the average for the period 1995-99 and is obtained from the Heritage Foundation.

Table 3 reports the matrix of correlations between and among the dependent and independent variables. As a start, it is useful to note that many of the correlations are not statistically significant; out of the 55 correlations 21 are significant at the 10% level. Most of these 17