Internationally Linked Firms, Integration Reforms and Productivity : Evidence from Pakistan
This paper examines productivity dynamics and drivers for Pakistani firms listed in the stock exchange (publicly listed firms) over 2012-17. It relies on policy and outcome measures of integration in upstream merchandise and services sectors, to as...
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/441121596474893570/Internationally-Linked-Firms-Integration-Reforms-and-Productivity-Evidence-from-Pakistan http://hdl.handle.net/10986/34281 |
| Summary: | This paper examines productivity
dynamics and drivers for Pakistani firms listed in the stock
exchange (publicly listed firms) over 2012-17. It relies on
policy and outcome measures of integration in upstream
merchandise and services sectors, to assess their impact on
productivity downstream. The paper presents three main
findings. First, the productivity of publicly listed firms
remained stagnant over the period, in line with macro-level
indicators for Pakistan. Second, foreign-owned or exporting
firms are more productive than domestic-owned or
domestic-oriented firms. Foreign investors target more
productive firms, and their productivity grows after being
acquired. Exporters tend to exhibit productivity growth
after becoming exporters. Third, increased import duties on
intermediates, or reduced levels of foreign direct
investment in upstream services sectors, are associated with
decreases in the total factor productivity of firms
downstream. Gains from lower input tariffs accrue to those
that do not secure duty exemption schemes --
domestic-oriented firms or smaller exporters. Gains from
upstream services foreign direct investment accrue mostly to
firms that are further from the productivity frontier. Taken
together, these results suggest that productivity growth in
Pakistan would benefit from increased exposure of upstream
sectors to global markets. |
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