Productivity, firm heterogeneity, and policy reforms in Latin America

PhD ceremony: Mr. G.J. de Vries, 16.15 uur, Academiegebouw, Broerstraat 5, Groningen

Thesis: Productivity, firm heterogeneity, and policy reforms in Latin America

Promotor(s): prof. M.P. Timmer

Faculty: Economics and Business

The thesis by Gaaitzen de Vries studies the relation between policy reforms and productivity performance in Latin America using firm-level data for the retail services sector. In the aftermath of the 1982 debt crisis, the role of the government was dramatically reduced and replaced by the competitive forces of the free market. Unfortunately, the reforms did not live up to expectations regarding growth. Low productivity growth in post-reform Latin America has been of profound concern to policymakers, because it determines the ability of people to improve their standard of living. This thesis aims to add various pieces to solving the puzzle why growth in Latin America did not accelerate despite wide-ranging reforms. It analyzes alternative policy strategies to speed up growth, arguing that taking into account the diversity of firms is at the core of understanding the relation between policy and productivity.