This paper uses monthly World Bank project-level data to assess the impact of upcoming elections in recipient countries on loan activity. We analyze the extent to which geopolitics influence both the timing and size of loan commitments and disbursements. While developing countries have better access to new World Bank loans when they vote with the U.S. in the United Nations General Assembly, we do not find that the political cycle plays a role in the timing or size of new loans. For already approved loans, disbursement is faster when countries are aligned with the U.S. in the UN. Furthermore, disbursement accelerates prior to elections if the country is geopolitically aligned with the U.S. but decelerates if the country is not. These disbursement patterns are consistent with global electioneering that serves U.S. foreign policy interests.
How do firm‐specific actions—in particular, innovation—affect firm productivity? What is the role of the financial sector in facilitating higher productivity? Using a rich firm‐level data set, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. The impact of innovation on productivity is larger in less‐developed countries. Evidence of financial sector development influencing the innovation‐productivity link is weak, but the effect is difficult to identify due to correlation between indicators of a country's financial and nonfinancial development. Furthermore, we find evidence that the innovation effect on productivity is more significant for high‐tech firms than for low‐tech firms.
The attraction of foreign direct investment (FDI) is considered to be of particular importance for emerging economies because it represents a channel through which international convergence in standards of living may be achieved. One important effect of FDI is its impact on wages, both within the targeted firm (direct) and the local firms within the
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