Essays On Firms In Developing Countries
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Essays On Firms In Developing Countries
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Author : Jie Bai (Ph. D.)
language : en
Publisher:
Release Date : 2016
Essays On Firms In Developing Countries written by Jie Bai (Ph. D.) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This thesis consists of three chapters on microeconomic issues of firms in developing countries and the impact of government policies on business growth. The first chapter examines firms' incentive to establish a reputation for quality. A key problem in developing countries is the lack of reliable provision of high quality goods and services. I designed an experiment to understand this phenomenon in a setting that features typical market conditions in a developing country: the retail watermelon market in a major Chinese city. I begin by demonstrating empirically that there is substantial asymmetric information between sellers and buyers on sweetness, the key indicator of quality for watermelons, yet sellers do not sort and price watermelons by quality. I then randomly introduce one of two branding technologies into 40 out of 60 markets-one sticker label that is widely used and often counterfeited and one novel laser-cut label. I track sellers' quality, pricing and sales over an entire season and collect household panel purchasing data to examine the demand side's response. I find that laser branding induced sellers to provide higher quality and led to higher sales profits, establishing that reputational incentives are present and can be made to pay. However, after the intervention was withdrawn, all markets reverted back to baseline. To rationalize the experimental findings, I build an empirical model of consumer learning and seller reputation. The results indicate that information frictions and fragmented markets lead to significant under-provision of quality in this setting. Though there is a high demand for quality, trust could take a long time to establish under the existing branding technology, which makes reputation building a low return investment. While the new branding technology enhances consumer learning, small individual sellers do not have the incentive to invest in this technology due to their small market size and market competition. The second chapter (co-authored with Seema Jayachandran, Edmund J. Malesky and Benjamin Olken) considers how local governments' bribe extraction could interact with firms' growth. We propose a model in which government officials' choice of how much bribe money to extract from firms is modulated by inter-jurisdictional competition. The model predicts that economic growth decreases the rate of bribe extraction under plausible assumptions, with the benefit to officials of demanding a given share of revenue as bribes outweighed by the increased risk that firms will move elsewhere. A second prediction is that the negative effect of growth on bribery is larger if firms are more mobile. We find empirical support for these predictions. In particular, we employ two instrumental variables strategies-one based on growth in a firm's industry in other provinces within Vietnam and another based on industry growth in neighboring China and find that growth causes a decrease in bribe extraction. Our results suggest that as poor countries grow, corruption could subside on "its own." Consistent with the model's predictions, we find that the effect is for firms whose property rights to their land are transferable and who have operations in multiple provinces, two proxies for geographic mobility. The third chapter examines the impact of internal trade barriers on firms' performance and export activities. It is well known that various forms of non-tariff barriers exist among Chinese provinces. However, empirically, it is difficult to measure these barriers because they can take many forms. I take advantage of an export VAT rebate policy reform in 2004 as a natural experiment to identify the existence of internal trade barriers and study the impact on TFP and resource allocation. In particular, as a result of shifting tax rebate burdens, the 2004 reform leads to a greater incentive for the provincial governments to block the domestic flow of non-local goods related to exporting. I find that foreign trade companies in the coastal region become more "inward-looking" in the years after the reform, consistent with rising local trade barriers. The value of exports through intermediaries grows less in the inland region relative to the coastal region, and the negative effect is larger in inland provinces with greater exposure to the reform, measured using baseline reliance on trade through intermediaries. I extend the standard open-economy heterogeneous firm model by adding an intermediary sector as in Ahn, Khandelwal and Wei (2011) but with a new focus on the intermediary's role of domestic sourcing. The model can be used to analyze general equilibrium effects, examine firms' entry and exit into exporting, and quantify the distortion on TFP.
Essays On Firms In Developing Countries
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Author : Tsogsag Nyamdavaa
language : en
Publisher:
Release Date : 2021
Essays On Firms In Developing Countries written by Tsogsag Nyamdavaa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
Essays On Firms In Developing Countries
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Author : Matthieu Teachout
language : en
Publisher:
Release Date : 2019
Essays On Firms In Developing Countries written by Matthieu Teachout and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
In the model, exporters are described by two parameters: a visibility parameter that impacts their likelihood of being found by foreign buyers and a cost parameter that drives the level of their price quotes and thus their market share with each foreign buyer. Visibility explains an important part of the firm size distribution. On the buyer side, searching for an additional exporter has an estimated cost of about $2,000. Moving to a centralized market would lead to a five percent decrease in transaction prices. Chapter 2 looks at the relationship between firms' output quality and their organizational structure. Using data on the production and transaction chain that makes up Peruvian fishmeal manufacturing, we establish three results. First, firms integrate existing suppliers when the quality premium rises for exogenous reasons. Second, suppliers change their behavior to better maintain input quality when vertically integrated. Third, firms produce a higher share of high-quality output when supplier availability constraints shift them into using integrated suppliers.
Essays On Firms In Developing Countries
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Author : David Alfaro Serrano
language : en
Publisher:
Release Date : 2020
Essays On Firms In Developing Countries written by David Alfaro Serrano and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
There is evidence showing that exporting firms pay higher average wages. However, it is still unclear whether these results are due to to changes in the wage premia or changes in workforce composition. In our study, we use employer-employee and longitudinal plant data from Mexico to address this question. We do so by decomposing plant-level average wages into a component reflecting wage premia and a component reflecting workers' skill composition. Using the late-1994 peso devaluation interacted with initial plant size as a source of exogenous variation in exports, we find that exports have a significant positive effect on wage premia, and that the effect on wage premia accounts for essentially all of the medium-term effect of exporting on plant-average wages.
Essays On Multinational Firms Financial Frictions And Income In Developing Countries
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Author : Yunfan Gu
language : en
Publisher:
Release Date : 2018
Essays On Multinational Firms Financial Frictions And Income In Developing Countries written by Yunfan Gu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
The dissertation contributes to our understanding of how multinational firms and financial frictions affect income in developing countries. From a policy perspective, I find that as developing countries open up to multinational firms, financial reforms become increasingly beneficial to national income in the countries. I also find that the joint ventures of foreign multinational firms with state-owned firms, an industrial policy in China, prevent technology spillovers and suppress industrial output. The dissertation consists of three chapters. Chapter 1: Financial frictions, Multinational Firms, and Income in Developing Countries: Theoretical Analysis Financial frictions create resource misallocation across heterogeneous production units and reduce national income (GNP) in developing countries. Multinational firms, however, can largely circumvent local financial frictions by borrowing from international sources. In this chapter, I theoretically study whether the presence of multinational firms in developing countries alleviates the adverse impact of financial frictions on national income. I show that in a developing economy that is open to multinational firms, if domestic firms produce a sufficiently large (small) share of output, financial frictions will cause a larger (smaller) decline in national income than in an otherwise identical developing economy that is closed to multinational firms. Such result calls for the quantitative analysis in the next chapter. Chapter 2: Financial frictions, Multinational Firms, and Income in Developing Countries: Quantitative Analysis In this chapter, I quantitatively study how the presence of multinational firms in developing countries change the adverse impact of financial frictions on national income. Using a calibrated structural model, I find that when a developing economy is open to multinational firms, a modest financial reform that reduces financial frictions in the developing economy will increase national income by 19%, as opposed to only 11% when the economy is closed to multinational firms. Such result indicates that financial frictions become increasingly costly and financial reforms become increasingly beneficial to national income in developing countries as they open up to multinational production. Chapter 3, Joint Ventures and Technology Spillovers in China Chinese government actively promotes joint ventures of foreign multinational firms with state-owned firms. In this chapter, I study the effects of the joint ventures in promoting technology spillovers. Using firm-level data in China, I find that higher joint venture presence in a sector leads to higher productivity of firms in the upstream of that sector, but lower productivity of firms in the downstream of that sector. A quantitative analysis suggests that the later force will dominate, and joint ventures will on aggregate prevent technology spillovers and cause a significant decline in total industrial output in China.
Essays On Firm Behavior In Developing Countries
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Author : Artur Kolasa
language : en
Publisher:
Release Date : 2014
Essays On Firm Behavior In Developing Countries written by Artur Kolasa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Business Government And Labor
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Author : Linda Y C Lim
language : en
Publisher: World Scientific
Release Date : 2017-12-07
Business Government And Labor written by Linda Y C Lim and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-12-07 with Business & Economics categories.
Business, Government and Labor in the Economic Development of Singapore and Southeast Asia analyzes the inter-linked and evolving roles of private sector business, government public policy, and labor markets in the economic development of Singapore and its Southeast Asian neighborhood. It does this through 16 essays written by Prof. Linda Y C Lim, an early and long-established scholar of these subjects, and published over a 35-year period. For Singapore, often considered the world's most successful economy, the essays highlight the determining role of government's industrial and social policy through to the present day, when the growth model of the past faces many external market and domestic resource constraints. In the rest of Southeast Asia, in contrast, the essays explore how private sector business, dominated by the locally-domiciled ethnic Chinese minority, thrived and drove economic growth in underdeveloped markets with imperfect institutions, and consider if and how this might change with China's increasing presence in the regional economy. A final set of essays analyzes the forces underlying women's employment, from labor-intensive Southeast Asian export factories in the 1980s to Singapore's foreign-labor-dependent economy and its current productivity challenges. Taken together, the essays show how government, business and labor interact in the process of economic development.
Essays On The Performance Of Manufacturing Firms In Developing Countries
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Author : Benjamin Patrick Eifert
language : en
Publisher:
Release Date : 2010
Essays On The Performance Of Manufacturing Firms In Developing Countries written by Benjamin Patrick Eifert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
This dissertation provides a theoretical and empirical investigation of the role of two under-explored factors in the performance of industrial firms in developing countries - one external to the firm in source, electricity service quality, and one internal to the firm, management practices. The first chapter lays out a theoretical framework that illustrates how poor electricity service quality can have particularly negative impacts on industrial productivity, including unexpected consequences like increased market concentration and oligopolistic behavior. The key idea here is that, because firms can produce their own electricity using private generators when the public grid is down, unreliable central power systems translate the substantial economies of scale in where relatively small producers are otherwise cost-competitive. As a result, larger firms can more easily dominate markets, potentially resulting in lower output and slower productivity growth. The second chapter turns to state- and firm-level data from India over the period 1979-2005, providing econometric estimates of the impacts of increases in electricity generation capacity on aggregate manufacturing output, employment and productivity, as well as suggestive evidence on the relationship between electricity shortages and the firm size distribution. The headline result is that a 1% increase in public sector electricity generation capacity is associated with a 0.13-0.26% increase in manufacturing output, about half of which comes from increased employment in the manufacturing sector and the remainder from increased productivity. These results put the present value of investments in public sector electricity generation capacity at roughly 2-4 times their cost. The third chapter turns to management practices, a similarly under-studied determinant of firm performance that lies primarily internal to the firm. Using data from an experiment on the randomized provision of management consulting services to textile manufacturing firms in India, this chapter provides a detailed methodology for measuring management practices on the shop-floor as well as econometric estimates of the impact of improved management practices on firm-level productivity, quality and profitability. The econometric results confirm the commonly held suspicion among businesspeople that the quality of management matters for firm performance; the improvements in management practices induced by the treatment increased the average plant's productivity by about 15% and its profitability by about 24% per year. The chapter also offers some suggestive evidence on why firms do not necessarily rapidly adopt modern management practices despite their benefits for productivity, focusing on the notion of management as a technology which diffuses slowly via knowledge transfer. Together, these three chapters provide a complex picture of the performance of firms in developing countries. External obstacles like poor electricity service quality broadly hinder economic growth and require improvements in state capacity, regulatory quality and the market environment to overcome. However, firms nonetheless can potentially make large gains in productivity and profitability from improving their internal systems and processes, including management practices. This story is consistent with the evidence of great competitive difficulties felt by many Indian firms struggling to compete with Chinese imports on the one hand, and the rise of great Indian multinationals like Tata and Reliance from humble beginnings as family businesses on the other.
Evidence Based Developmental Economics Um Press
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Author : Carlo Pietrobelli
language : en
Publisher: The University of Malaya Press
Release Date : 2012
Evidence Based Developmental Economics Um Press written by Carlo Pietrobelli and has been published by The University of Malaya Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Business & Economics categories.
At a time when governments are looking for new approaches to promote economic development as the free markets paradigm has proved to be neither necessary nor adequate, the pioneering work of Sanjaya Lall offers policy relevant insights. Sharing his epistemological coordinates, the contributors to this volume develop his ideas further by treating the theory, methodology and evidence related to development issues inductively through a dynamic set of lenses.
Essays On Firm Behavior In Developing Economies
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Author : Ama Baafra Abeberese
language : en
Publisher:
Release Date : 2013
Essays On Firm Behavior In Developing Economies written by Ama Baafra Abeberese and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
Using data on Ghanaian manufacturing firms, I find a significant decline in investment in plant and machinery during the electricity rationing period. The decline in investment is more pronounced for firms in electricity-intensive sectors. I explore alternative explanations for the reduction in investment during the electricity rationing period, including a contraction in firm credit access and economy-wide shocks unrelated to electricity constraints, and find no evidence in support of either explanation. The results, therefore, suggest that the reduction in investment during the electricity rationing period was due to the constraints on the availability of electricity. These findings highlight the potentially negative impact of the inadequate provision of electricity that frequently plagues developing countries. These electricity constraints can hinder growth in these countries by curbing investment by firms. In Chapter 3, I turn to the investigation of the effect of a trade-related constraint.