The kick-off workshop for the Programme was held in London on 18/19 May 2012.
Increases in productivity stem either from improvements in productivity of existing firms, or from the reallocation of output shares across firms via the exit of low productivity and entry of high productivity firms. In the United States and Europe, data allow a detailed examination of these productivity dynamics. For example, using data from six narrowly defined manufacturing sectors, Foster, Haltiwanger and Syverson (2008) find that the direct effect of entry explains only around one-quarter of productivity growth; with most productivity growth coming from improvements in incumbent firms.
There are few comparable studies of productivity dynamics in developing countries, but recent evidence suggests markets in these countries exert much less pressure on incumbent firms. Bloom and Van Reenen (2010) show there is substantially more dispersion in management practices in India and China than in the United States and northern Europe, and Hsieh and Klenow (2009) show greater dispersion in TFP in India and China, compared with the United States. By either measure, we see a much thicker left-hand tail of lowproductivity firms surviving in China and India. Casual observation suggests that productivity dispersion is also very high in sub-Saharan Africa and other LICs, but the lack of data has made testing this conjecture difficult. The PEDL Initiative aims to encourage researchers to apply state of the art methods for analysing private enterprise dynamics to data from low-income countries.
The PEDL inaugural workshop was a first step in this direction. This two-day workshop brought together researchers who have successfully analysed private sector dynamics in both high- and low-income countries, with researchers and policymakers from low-income countries who are familiar with data sources in these countries.
The workshop had two specific aims:
1) To understand which of the issues being addressed in current research on private enterprise dynamics are most relevant to LICs.
2) To identify LICs where data already exist that would allow use of these analytical tools to address questions of interest to policymakers.
The workshop featured a series of panel sessions that combined presentations by researchers focused on methods, data and results with discussion from individuals knowledgeable about data sources and policy priorities in low-income countries.
The workshop was not intended to be a large scale ‘public’ event but instead was a focused event with approximately 30 active participants. The aim was to develop the PEDL research agenda, by bringing together two key groups:
1) those who have developed and are using the latest tools for data-driven, policy relevant research on enterprise dynamics; and
2) those with a deep understanding of data on the private sector in low-income countries.
The workshop began with an Introduction by Chris Woodruff:
Several presentations were given over the course of the two days by researchers and policymakers:
Miriam Bruhn, an economist at the World Bank, presented on "A Tale of Two Species: Revisiting the Effect of Registration Reform on Informal Business Owners in Mexico"
Ali Choudhary, Senior Lecturer at the Schoold of Economics, University of Surrey, gave a presentation based on his papers "Bank Lending and Monetary Shocks: an Empirical Investigation" and "Price-Setting Discoveries: Results from a Developing Country"
Greg Crawford, Professor of Economics at the University of Warwick, gave a presentation on "Adverse Selection in the Loan Market"
Suresh de Mel, Senior Lecturer at the University of Peradeniya, gave a presentation on "Identifying Constraints to Microenterprise Growth"
Chang-Tai Hsieh, Professor of Economics at the University of Chicago Booth School of Business, gave a presentation on The Life Cycle of Plants in India and Mexico
John Van Reenen, Professor of Economics at the London School of Economics (LSE) and Director of the Centre for Economic Performance, presented on "Competition and Technology Adoption"
Eric Verhoogen, Associate Professor at Columbia University, presented on "Export Destinations and Input Prices: Evidence from Portugal"