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Agriculural Productivity and Industrial Growth: Evidence from Brazil

Productivity growth in agriculture can accelerate industrial growth by: releasing labour from the agricultural sector; raising incomes (which increases demand for manufactured goods); and increasing savings (which provides finance for entrepreneurs in the industrial sector). Some of these positive effects only occur in closed economies, however. In open economies comparative advantage in agriculture may actually retard industrial growth. Estimating the direction and size of these effects is therefore an important issue for designing policy.


Research Project
1 Jan 2014

Raúl Sánchez de la Sierra

University of California, Berkeley

Highways, Firm Productivity, and Allocative Efficiency in India

In this study of a large scale highway upgrade project in India, called the Golden Quadrilateral (GQ), Kerr, Grover and Ghani (2013) find several positive effects on the organized sector for non-nodal districts located in proximity with the GQ vis-à-vis other districts — most notably higher entry

Research Note
3 Jan 2014

The Impact of Management Consulting Services on Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico

Based on a randomized control trial with 432 SMEs in Puebla Mexico, Bruhn et al. (2013) show that providing them with access to consulting services to increase their managerial capital led to better firm performance: within one year after the program treatment, firms reported positive effects on return on assets and total factor productivity. Owners also showed large increases in their entrepreneurial spirit, measured by a managerial confidence index. Further, the researchers find a large increase in the number of employees and total wage bill for the treatment group two to three years after the program. 

3 Jan 2014

Can Basic Entrepreneurship Transform the Economic Lives of the Poor?

Using a large-scale and long-term randomized control trial in Bangladesh, this paper by Bandiera et al. (2013) demonstrates that sizable transfers of assets and skills enable the poorest women to shift out of agricultural labor and into running small businesses.

3 Jan 2014

Video interviews from the December 2013 conference on Firms and Development in London

On December 12-13, PEDL hosted a conference on ‘firms and development’ jointly with the IPA SME Initiative.

3 Jan 2014

Truth-Telling by Third Party Auditors and The Response of Polluting Firms: Experimental Evidence from India

In this two-year field experiment in the Indian state of Gujarat, Duflo et al. (2013) altered the market structure for environmental audits of industrial plants to incentivize accurate reporting and showed that third-party auditors who are chosen and paid by the firms that they audit tend to systematically report plant emissions just below the legal standard. The treatment caused the auditors to report more truthfully and the treatment plants to reduce their pollution emissions.

3 Jan 2014

Taxes, Misallocations, and Productivity

Misallocations of factors of production have the potential to explain a large portion of cross-country differences in productivity (Hsieh and Klenow, 2009). Yet, empirical evidence relating actual differences in firms' productivity to observable policy distortions has been scarce.

Working Paper
5 Jan 2014

Green Microfinance Strategy for Entrepeneurial Transformation: Supporting Growth and Responding Climate Change

Growing evidence suggests that the millions of micro-enterprises that dominate the private sector in low-income countries (LICs) pose a threat to the environment by using inefficient production technologies and adopting unsustainable waste and output management practices. Further, micro-enterprises in LICs tend to be informal businesses, and as such escape the supervision of regulatory and environmental agencies.

Research Project
17 Jan 2014