rafmacalaba/datause-encoder-data huggingface dataset:
scale can lead to imperfectly competitive market structures and thereby affect pricing behavior, product diversity, productivity and growth (Roberts and Tybout, 1996).

We use two different measures to examine the effects of scale effects at the industry and urban area levels to explain variations in technical efficiency. The benefits of locating in close proximity to other firms in the same industry are measured through an index of concentration called the location quotient (LQ). as defined below. This index reflects the degree to which an industry is concentrated in the particular region in comparison with the size of the industry in the national economy as a whole.

In the above equation, E represents employment and subscripts K and R represent industry and region respectively (Hoover, 1975; Isard, 1956). An LQ in excess of 1, means that the industry in more concentrated in the region than in the nation. We use this employment LQ in the empirical analysis. Our prior expectation is that as the scale of the industry in a given area increases relative to the nation, we should get net positive and significant localization economies, through increases in both pecuniary and nonpecuniary (i.e. technological) externalities generated by interaction between firms in the same or inter-related industries. Beyond industry level scale effects, variations in urban scale effects are likely to influence efficiency at the plant level. We measure urban scale by the size of the urban population in the district.

# **(c) The Leather Products Industry**<sup>**5**</sup>

The leather products industry is clearly at the low end of the technology-skill spectrum and present in most developing countries on account of roots in pre-industrial society. Despite that, however, it is the fourth largest foreign exchange earner in India, accounting for around 5 percent of the world market for leather products. It occupies a place of prominence in the economy not only on account of its growth and export potential, but also because of its capacity to employ large numbers of people. Currently it employs over 2 million workers. India has a comparative advantage in leather products, deriving from its large bovine population and abundance of low-skilled, inexpensive labor. The data in the sample used for analysis cover 500 plants in 1994, located in sectors ISIC 233 and 8
Through digital satellite image analysis, Ye et al. (2006) find that glaciers in China’s Naimona’nyi region shrank and retreated, shrinking at average rates of 0.17, 0.19 and 0.77 km<sup>2</sup> a<sup>−1</sup> during the periods 1976-90, 1990-99, and 1999-2003, respectively. Similarly, Nie et al. (2010) observe glacier shrinkage in the Preserve at a rate of 15.6% (16.7 km<sup>2</sup> a<sup>-1</sup> ) from 19762006, occurring mainly at elevations of 4700-6800 m. They find shrinkage in this period was higher on southern slopes (16.8%; Poiqu and Gyirong Zangbo) than on northern slopes (14.4%; Pengqu). They note glacial area shrank at the rate of 16.73 Km<sup>2</sup> a<sup>-1</sup> (15.63%) in the Preserve between 1976-2006.

In Nepal, overall glacier area and ice reserve have declined by 21% and 28%, respectively, between 2001 and 2010 (Bajracharya et al., 2011). Bajracharya et al. (2011) also report shrinking (average of 30 km<sup>2</sup> a<sup>-1</sup> for 1977-2009) and fragmentation of glaciers, noting that retreating glaciers were only observed below 5800 masl, with the highest rate of retreat at 50005500 masl; in central Nepal, they report disappearance of glaciers below 3200 masl.

Bolch et al. (2008 a) analyze changes in glacier area in eastern Nepal (Khumbu Himal) using satellite images of the area (1962, 1992, 2001, 2005) and find that, overall, the region lost ice cover for all four periods considered (1962-2005; 1962-1992; 1992-2001; 2001-2005). Considering the 1962-2005 period, the region is losing ice covered areas at an average rate of 0.12% per year with a higher rate of 0.24% per year for clean ice areas (Bolch et al., 2008 a). Over a longer time frame (1962-2007), Kulkarni et al. (2007) report a 21% overall loss of glacial area in the state after analyzing 466 glaciers using remote sensing. Based on satellite imagery, Kulkarni et al. (2011) studied glacier shrinkage of 1868 glaciers in 11 basins in the Indian Himalaya, where they found an overall reduction in glacier area of 16% from 1962-2002, ranging from 2.7-20% among different basins.

# **_Glacier lake expansion_**

One impactof increasing temperature over the last centuries in many mountainous environments is retreat of glaciers and formation of moraine-dammed glacial lakes (Evans and Clague, 1994). Bajracharya and Mool (2010) report that overall area of moraine-dammed lakes is increasing in the Nepalese Himalaya.

7
10 countries which send similar numbers of migrants to both the United States and the OECD. However, for some labor-exporting countries - like Tunisia or Turkey - which send much larger numbers of migrants to the OECD than to the United States, this procedure is likely to be quite problematic. For instance, our procedure will impute to the German Turks the same high level of education as is found in their United States counterparts. This may, in turn, lead to a gross overestimate of the brain drain from a country like Turkey.

The second problem with the OECD data lies in its different way of classifying immigrants. Since United States-born children of immigrants have US citizenship, the United States defines an immigrant as a person who was born abroad to non-US citizens. Most OECD countries, however, follow an ethnicity-based definition of immigration status. This method classifies a person on the basis of the ethnicity of the parent, rather than on place of birth. Thus, a child of Turkish parents bom in Germany is typically classified as an immigrant. This different way of classifying immigrants has the net effect of increasing the stock of immigrants in any particular OECD country, and perhaps biasing our estimates of the educational status of "migrants" who were actually bom, raised and educated in that OECD country.

The third difference between the OECD and the United States data has to do with the number of labor-exporting countries recorded. As noted above, the 2000 U.S. Census data can be used to count the number of migrants from about 50 different labor-exporting countries. By contrast, for each OECD country, OECD data only record the number of migrants from approximately the top fifteen-labor exporting countries. On the one hand, this might not be a significant problem for large labor-exporting countries, like Turkey.
**Table 11**

# **5-year Panel Growth Regressions, Restricted Sample: Non-high-income Economies**

||(1)<br>**OLS**|(2)<br>**IV**|(3)<br>**FE**|(4)<br>**GMM**|(5)<br>**GMM**|(6)<br>**GMM**|(7)<br>**GMM**|(8)<br>**GMM**|
|---|---|---|---|---|---|---|---|---|
|Log of GDP pc, beg. period|-0.015***|-0.029***|-0.043***|-0.029***|-0.016**|-0.024***|-0.031***|-0.019***|
||(0.004)|(0.006)|(0.009)|(0.005)|(0.007)|(0.006)|(0.011)|(0.007)|
|Log of EXPY, beg. period|0.034***|0.079***|0.026*|0.037***|0.033**|0.047***|0.053***|0.041**|
||(0.006)|(0.020)|(0.014)|(0.012)|(0.016)|(0.014)|(0.015)|(0.017)|
|Log of % secund. school att., beg. period|0.006***|0.002|0.001|0.016***|0.009|0.008*|0.018**|0.016|
||(0.002)|(0.003)|(0.004)|(0.004)|(0.006)|(0.005)|(0.009)|(0.012)|
|Constant|-0.168***|-0.442***|0.144|-0.108|-0.161|-0.219*|-0.238|-0.220|
||(0.043)|(0.135)|(0.105)|(0.096)|(0.103)|(0.129)|(0.142)|(0.172)|
|Observations|420|412|420|412|412|412|412|412|
|Number of group(ecode)|||53|53|53|53|53|53|
|Instruments||||91|70|52|31|28|
|R-squared|0.43|0.35|0.49||||||
|First stage F-statistic of excluded instrument p-value<br>(H0: underidentified/weakly identified)||0.000|||||||
|Hansen J statistic p-value (H0:overidentified)||0.086||1.000|0.988|0.814|0.131|0.299|
|Stock-Wright S-statistic p-value (H0: all endogenous<br>regressors==0 and overid. rest. valid, weak-instrument-<br>robust inference)||0.000|||||||
|AB test for AR(2) in first diff. (p-value)||||0.112|0.159|0.358|0.091|0.155|
|Robust standard errors in parentheses<br>* significant at 10%; ** significant at 5%; *** significant at 1%|||||||||

All equations include period dummies. IV regressions use log population and log land area as instruments. FE regressions include dummies for countries. GMM is Blundell-Bond System GMM estimator using lagged growth rates and levels as instruments as well as log population and log land area.

36
Poo, Ph-aidh To encourage investment and savings, policymakers cannot ignore capital mobility even in situations where domestic nationals do not invest abroad and foreign investors do not invest domesticaily. The potential for capital to move across intemational boundaries creates an opportunity cost for investment in a particular country and throughout the world. In determining marginal effective tax rates it is necessary in addition to traditional considerations, such as tax rates and the distribution of the tax base, to incorporate the following factors:

* Source rules (the basis for taxation).

* Nexus rules (which defie who must file and pay income taxes).

* Attribution rules (about accounting methods).

* The scope of bilateral accommodation between countries.

None of these factors i.' supetior economically to the others as a basis for determining tax policy. If tax policy is to encourage intemational capital flows, explicit tradeoffs may have to be made between increased tax revenues and incentives to invest.

In addition, tax policy should be evaluated with respect to _net,_ not gross, capital flows. Tax policy that increases foreign investments in a capital importing country by X percent is poorly designed if it increases the flow of domestic investments abroad by a larger percentage.

International capital mobility provides both costs and opportunides for developing tax policy within a country. Since investors tmat taxes as a cost of doing business, each country's tax price should reflect its opportunity cost of investment (either foreign or domestic). These tax prices will differ between countries. Uniformity of taxes across countries can therefore distort rather than improve investment. As long as there is reasonable competition among the suppliers of capital, tax competition among govemments may make distribution within the system more efficient. In such a context international cooperation may not be the best method for the develoment of tax policy for factors that are internationally mobile.

Equity across countries, however defined, should be measured by how the net benefits of capital investment (including tax revenues) are distributed - _not_ by how the tax base is distributed. In particular, tax treaties should not be evaluated solely on revenue potential nor should they be canceled unilaterally. Instead they should be evaluated on pragmatic grounds in terms of their effects on investor confidence and their administrative costs.

This is a background paper for the 1988 World Development ReporL Copies are available free from the World Bank, 1818 H Street NW, Washington DC 20433. Please contact Lupita Mattheisen, mom S13-067, extension 33757.

The PPR Working Paper Series disseminates the fidings of work under way in the Bank's Policy, Planning, and Research Complex. An objective of the series is to get these findings out quickly, even if presentations are less than fuly polished. The findings, interpretations, and conclusions in these papers do not necessarily represent official policy of the Bank.

Produced at the PPR Dissemination Center
Similarly, the positive effects of GVC integration as a buyer are not associated with social standards. Therefore, the conclusion remains the same here—economic and social upgrading through GVC participation can move hand in hand. In fact, deteriorating social standards can be a stumbling block for economic upgrading and should be prevented.

**Table 10. The role of social standards for economic upgrading through GVCs**

|VARIABLES|(1)<br>_DVA_|(2)<br>_DVA_|(3)<br>_DVA_|(4)<br>_DVA_|
|---|---|---|---|---|
|**Backward links**|||||
|_FVAX_|0.0687***<br>(0.0149)<br>|0.0677***<br>(0.0130)<br>|0.0540***<br>(0.0197)<br>|0.0683***<br>(0.0262)<br>|
|_FVADP_|0.259***|0.246***|0.275***|0.261***|
|_FVAX*Technical ILO conv._|(0.0276)<br>-8.6e-05<br>(0.0003)|(0.0261)|(0.0243)|(0.0278)|
|_FVAX*Unempl. insurance_||0.0001<br>(0.0003)|||
|_FVAX*Pension insurance_|||0.0002<br>(0.0003)||
|_FVAX*Health expenditure_||||-0.0003<br>(0.0022)|
|_Constant_|5.558***|5.781***|5.485***|5.632***|
||(0.171)|(0.168)|(0.167)|(0.178)|
|Observations|7,037|6,918|6,697|6,917|
|R-squared|0.858|0.858|0.858|0.858|
|**Forward links**|||||
|_DVAR_|0.185***<br>|0.186***<br>|0.166***<br>|0.236***<br>|
||(0.0246)|(0.0207)|(0.0262)|(0.0394)|
|_FVADP_|0.239***|0.223***|0.253***|0.240***|
||(0.0264)|(0.0240)|(0.0233)|(0.0267)|
|_DVAR*Technical ILO conv._|-0.0026<br>(0.0018)||||
|_DVAR*Unempl. insurance_||0.0012**<br>(0.0005)|||
|_DVAR*Pension insurance_|||0.0008**<br>(0.0004)||
|_DVAR*Health expenditure_||||-0.0019<br>(0.0031)|
|_Constant_|4.822***|4.990***|4.617***|5.012***|
||(0.173)|(0.161)|(0.166)|(0.185)|
|Observations|7,045|6,926|6,700|6,925|
|R-squared|0.875|0.874|0.876|0.875|

Source: OECD ICIO database. *** p<0.01, ** p<0.05, * p<0.1. Notes: Robust standard errors in parentheses. FVAX and DVAR lagged. All level variables in natural logarithms.

# **_Environmental Standards_**

The final policy area we look at considers environmental standards. Here we find a slightly more differentiated picture. Regarding country-level policies, table 11 indicates a mediating effect for both GVC integration as a seller and a buyer. High air pollution and extensive water usage have negative and significant coefficients for backward links (columns 5 and 6); and heavy pesticide use has a negative and significant coefficient for forward links (column 4). While our firm-level indicator for the stock of ISO certifications related to environmental protection has the positive and significant sign, only for GVC integration as a seller. This is in line with what we found for the previous standards and fits the signaling channel as dominant transmission mechanism between standards and GVC-induced upgrading.

30
Among those firms that did grow between 2000 and 2005 in rural Tanzania, employment growth is systematically higher among smaller and younger firms. The inverse relationship between size and age on growth suggests an important role for these firms in rural Tanzania. Figure 10 predicts enterprise growth as a function of size and age to facilitate interpretation. The estimate is based on coefficients obtained from the regression analysis (table 3).

**Figure 10: Firm Growth, Size and Age in Rural Tanzania**

<!-- Start of picture text --> 7<br>6<br>5<br>4<br>3<br>2<br>1<br> Initial size = 1 Initial size = 5<br>0<br>0 5 10 15 20 25<br>Firm age (years)<br>Source: 2005 Tanzania RICS<br>Employment (number of workers)<br><!-- End of picture text --> The analysis shows that after start-up, one-person rural enterprises in Tanzania will grow (40%) during the first four years and then remain stagnant. The average enterprise size is about 1.4 employees, a number that coincides with descriptive survey data for one-person start-ups. By contrast, a bigger enterprise with an initial start-up size of five employees contracts slightly during the first year, but grows relatively fast for five subsequent years (20% growth). Thereafter, employment growth declines and the firm eventually start to contract.

19
working in agriculture (row 3) separately. We then include all three of those variables together (row 4). Since our estimation sample is restricted to rural households, to examine the hypothesis—albeit in an indirect way—that urban households spend more on tutoring, we also include the distance from the commune to the nearest major city in Vietnam (row 5).<sup>35</sup> Estimation results are qualitatively similar for almost all specifications. The exception is the model specification with all the commune infrastructure and distances variables (row 4); in that case, magnitudes are similar but the coefficients have less statistical significance. This is perhaps unsurprising: the model is over-fitted, with all the distance variables statistically insignificant in both the first-stage regressions (as shown in Table 1.1) and second-stage regressions (not shown).

Our previous study (Dang, 2007) shows that communes with higher levels of education spend more on tutoring and argues that this impact can come from both the demand side (e.g., children have peer pressure to study harder or beneficial interaction with well-educated adults) and the supply side (e.g., communities with higher educational levels may be able to supply more tutors). To check whether the levels of commune education can affect our results, we include in our equation of interest the share of the commune adult population with upper secondary education or higher (row 6). As a further check, using the primary school census (DFA) database, we calculate the commune-averaged shares of teachers with upper secondary education, upper secondary education plus two more years of additional training, two-year teacher training college education, four-year teacher training college education, and student-teacher ratios. These variables are expected to capture teacher and

> 35 These cities are Hanoi and Haiphong in northern Vietnam, Danang in central Vietnam, and Cantho and Ho Chi Minh in southern Vietnam. We also experiment with using the distance to the provincial city instead of the distance to these major cities and obtain similar, albeit slightly statistically weaker, results.

26
However, as discussed above, clauses of the concession affecting the outcome of a potential renegotiation should be treated as endogenous. This endogeneity has two dimensions. First there is a direct self-selection effect. For example, minimum income guarantee clauses are more likely to be introduced in more risky projects. Second, the inclusion of such clauses has a moral hazard effect, in that it may affect the incentive of the firm to behave efficiently as explained above. This implies a countervailing effect on the probability of renegotiation. Ultimately, determining the qualitative impact of such rules requires to take into account both effects, and is an empirical matter.

Also, the choice of a price cap regulation over a cost plus regulation is ambiguous because on the one hand it creates more risk to the firm and therefore more opportunities for renegotiation, but on the other hand more efficient firms select more easily price cap contracts.<sup>2 4</sup>

# 2.7 Impact on the Probability of Renegotiation

Table 1 summarizes the impact of key variables (institutional quality, i.e. rule of law/noncorruption, _0;_ shock e; degree of state capture -y; efficiency of bargaining (arbitration) 3; minimum income guarantee; amount of investment required F; share of private financing K) on the probability of renegotiation, as well as the expected effects of some additional variables that we did not model explicitly (existence of a regulatory body which yields better contract and a stronger commitment of the government to not renegotiate and should obviously decrease the probability of renegotiation, price cap regulation which has an ambiguous effect as discussed above).

Table 1: Impact of key variables on the probability of renegotiation <!-- Start of picture text --> Probability of renegotiation<br>Effect of an increase in:<br>Institutional quality 19<br>Shock E<br>Political capture r +<br>Arbitration +<br>Cost of public funds A +<br>Investment F + / ambiguous<br>Private financing K ambiguous<br>Minimum income guarantee ambiguous<br>Existence of regulatory body<br>Previous experience _ _ _ _<br>Price cap regulation ambiguous<br><!-- End of picture text -->

> 24See Jeon and Laffont (1999).

21
Policy Research Working Paper 7438

# **Abstract**

Drawing on international trade data, this paper uses the product space approach to analyze changes in Morocco’s goods exports in 1990–2010 and future export priorities. The level of Morocco’s gross domestic product and its moderate growth match the predictions of product space analysis, informed by changes in the income potential of Morocco’s export basket, reflecting relatively strong capabilities (a high density) in products with relatively low potentials in income and diversification. Morocco’s peripheral position in the product space map matches its slow growth and points to the difficulty of diversification into more sophisticated products. Encouraging changes since 1990 include the development of a revealed comparative advantage for medium- and hightech manufactures, which in 2010 represented around 40 percent of total goods exports. However, the number of goods involved is relatively small and this transformation has not sufficed to raise per capita growth to the average for middle-income countries. Export projections up to 2025 suggest that future developments will follow the trends of the past. Among sectors, high growth is likely for phosphatebased fertilizer exports. However, like edible oil products, which also may grow rapidly, phosphates are hampered by low income and diversification potentials. Along with various other manufactured products, electronics and the automotive industry are promising sectors that may offer more lasting positive contributions to Morocco’s future development. Beyond goods, Morocco’s policy makers should also consider the potential contributions of service exports, which in recent years have enjoyed rapid growth.

This paper is a product of the Development Prospects Group, Development Economics. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at iosoriorodarte@worldbank.org and hlofgren@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team