Deep Blue Collection: International Policy Center (IPC) - Working Paper Series

Firms’ Exporting Behavior under Quality Constraints

Tue, 24 Nov 2009 19:36:04 GMT

Title: Firms’ Exporting Behavior under Quality Constraints

Authors: Sivadasan, Jagadeesh; Hallak, Juan Carlos

Abstract: We develop a model of international trade with export quality requirements and two dimensions of firm heterogeneity. In addition to "productivity", firms are also heterogeneous in their "caliber" — the ability to produce quality using fewer fixed inputs. Compared to single-attribute models of firm heterogeneity emphasizing either productivity or the ability to produce quality, our model provides a more nuanced characterization of firms’ exporting behavior. In particular, it explains the empirical fact that firm size is not monotonically related with export status: there are small firms that export and large firms that only operate in the domestic market. The model also delivers novel testable predictions. Conditional on size, exporters are predicted to sell products of higher quality and at higher prices, pay higher wages and use capital more intensively. These predictions, although apparently intuitive, cannot be derived from single-attribute models of firm heterogeneity as they imply no variation in export status after size is controlled for. We find strong support for the predictions of our model in manufacturing establishment datasets for India, the U.S., Chile, and Colombia.

Effects of Privatization and Ownership in Transition Economies

Thu, 08 Oct 2009 17:58:31 GMT

Title: Effects of Privatization and Ownership in Transition Economies

Authors: Estrin, Saul; Hanousek, Jan; Kocenda, Evzen; Svejnar, Jan

Economic Effects of “Leveling the Playing Field” in International Trade

Thu, 10 Sep 2009 18:18:25 GMT

Title: Economic Effects of “Leveling the Playing Field” in International Trade

Authors: Deardorff, Alan

Abstract: This paper uses simple economic theory to examine the effects of various policies that are intended to level the playing field in international trade. That is, when foreign producers are given advantages over domestic producers by government subsidies or other interventions that lower their costs, domestic firms may argue that their own governments should either provide comparable assistance or should protect them from competing with the foreign firms on grounds of fairness. Economic analysis easily shows that granting these requests is usually harmful for the domestic economy as a whole, but that may not prevent such policies from being implemented. Therefore this paper examines what the further effects of such policies may be. The main conclusion that emerges is that policies to level the playing field most often overcompensate those who request them, making them better off than if the playing field had not be tilted against them in the first place.

Self-Employment in Household Enterprises and Access to Credit: Gender Differences during India’s Rural Banking Reform

Thu, 10 Sep 2009 18:02:57 GMT

Title: Self-Employment in Household Enterprises and Access to Credit: Gender Differences during India’s Rural Banking Reform

Authors: Meulen Rodgers, Yana van der; Menon, Nidhiya

Abstract: This study uses use four cross sections of household survey data collected by India’s National Sample Survey Organization between 1983 and 2000 to examine the role of credit in encouraging small-scale entrepreneurship among men and women in rural labor households. Results from two-stage probit least squares estimations indicate that land ownership, a key means of providing collateral, serves one of the strongest predictors of men’s and women’s self-employment. However, women’s self-employment exhibits a substantially stronger and more positive response to having a loan compared to men. Results also point to interesting class differences within the lowest tier of India’s social class system: self-employment is less likely for members of scheduled castes (who may be pressured by upper castes to remain employed by others), but higher for members of scheduled tribes (who tend to rely on their own skills to make a living).