I estimate the causal effects of demand shocks, stemming from government procurement, on the grow... more I estimate the causal effects of demand shocks, stemming from government procurement, on the growth of small firms in Ecuador. I assemble a unique dataset using several new administrative sources and, as identification strategy, exploit a governmental procurement process that allocates public contracts through a randomized contest. This paper provides three main contributions to the literature. First, it shows the positive and significant effect of demand shocks on firm growth. On average, an increase in demand of 10% will increase wage expenses by 4% and fixed assets by 5% during the year of the shock. Second, it finds no evidence of spill-over effects from demand shocks on sales to the public or private sector. Finally, as in other studies, it is shown that demand positively impacts firm growth but, contrary to other findings, this effect is temporary and only observed during the year of the shock.
This paper provides a method to classify TL3 regions across OECD countries based on their level o... more This paper provides a method to classify TL3 regions across OECD countries based on their level of access to metropolitan areas. TL3 regions are classified as 'metropolitan' if more than half of their population lives in one or more functional urban area (FUA) of at least 250 thousand inhabitants and as 'non-metropolitan' otherwise. The method sub-classifies metropolitan regions into 'large metro' or 'metro' regions based on the population size of the FUAs located within those regions. Non-metropolitan TL3 regions are sub-classified into: with access to a metro, with access to a small/medium city, or remote based on their level of access to a FUA with population above a predetermined threshold. The method relies on publicly available grid-level population data and localised information on driving conditions.
OECD Working Papers should not be reported as representing the official views of the OECD or of i... more OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).
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Papers by Milenko Fadic