Business Environment and Sectoral Productivity in Côte d'Ivoire

Abstract

Improving the business environment is a priority for countries seeking to create an attractive framework for private investment and foster private sector competitiveness. This paper investigates the effect of business environment on sectoral productivity in Côte d'Ivoire. We use sectoral Productivity per worker as measure of productivity and the Economic Freedom of the World index of Fraser Institute as measure of business environment in this study. Using data for the period 1991-2018 and the Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) estimation methods, the results indicate that improvement in the business environment in Cote d'Ivoire has a positive effect on productivity in agricultural, industry and services sectors. However, the effect is much stronger in the services and industrial sectors.