03. Journals
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These are journal articles published in World Bank journals as well as externally by World Bank authors.
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Publication
The Role of Social Ties in Factor Allocation
(Published by Oxford University Press on behalf of the World Bank, 2019-10)We investigate whether social structure helps or hinders factor allocation using unusually rich data from the Gambia. Evidence indicates that land available for cultivation is allocated unequally across households; and that factor transfers are more common between neighbors, co-ethnics, and kinship-related households. Does this lead to the conclusion that land inequality is due to flows of land between households being impeded by social divisions? To answer this question, a novel methodology that approaches exhaustive data on dyadic flows from an aggregate point of view is introduced. Land transfers lead to a more equal distribution of land and to more comparable factor ratios across households in general. But equalizing transfers of land are not more likely within ethnic or kinship groups. In conclusion, ethnic and kinship divisions do not hinder land and labor transfers in a way that contributes to aggregate factor inequality. Labor transfers do not equilibrate factor ratios across households. But it cannot be ruled out that they serve a beneficial role, for example, to deal with unanticipated health shocks. -
Publication
Networks and Manufacturing Firms in Africa: Results from a Randomized Field Experiment
(Published by Oxford University Press on behalf of the World Bank, 2018-10)We run a novel field experiment to link managers of African manufacturing firms. The experiment resembles the many forms of interaction that business and community organizations offer to their members. The design features exogenous link formation, exogenous seeding of information, and exogenous assignment to treatment and placebo.We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find significant diffusion of business practices in terms of VAT registration and having a bank current account. This diffusion is a combination of diffusion of innovation and simple imitation. At the time of our experiment, all three studied countries were undergoing large changes in their VAT legislation. -
Publication
Identifying Gazelles: Expert Panels vs. Surveys as a Means to Identify Firms with Rapid Growth Potential
(Published by Oxford University Press on behalf of the World Bank, 2017-10-01)We conduct a business plan competition to test whether survey instruments or panel judges are able to identify the fastest growing firms. Participants submitted six- to eight-page business plans and defended them before a three- or four-judge panel. We surveyed applicants shortly after they applied and one and two years after the competition. We use follow-up surveys to construct measures of enterprise growth and baseline surveys and panel scores to construct measures of enterprise growth potential. We find that a measure of ability correlates strongly with future growth, but that the panel scores add to predictive power even after controlling for ability and other survey variables. The survey questions have more power to explain the variance in growth. Participants presenting before the panel were given a chance to win customized management training. Fourteen months after the training, we find no positive effect of the training on growth of the business. -
Publication
Risk Sharing in Labor Markets
(Washington, DC: World Bank, 2003-09)Empirical work in labor economics has focused on rent sharing as an explanation for the observed correlation between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries, Authors find strong evidence of risk sharing. Workers in effect offer insurance to employers: when firms are hit by temporary shocks, the effect on profits is cushioned by risk sharing with workers. Rent sharing is a symptom of an inefficient labor market. Risk sharing; by contrast, can be seen as an efficient response to missing markets. Authors evidence suggests that risk sharing accounts for a substantial part of the observed effect of shocks on wages.