Information Frictions

Digital technologies are increasingly accessible in lower-income countries, potentially offering substantial productivity gains, but there’s a catch.

There is variation in the wages and profits that people earn in different locations, as evidenced by rural-urban wage gaps within low-income countries and income variation between commuting zones in higher income countries.

Search and trust frictions have historically made it hard for small firms in lower-income countries to buy inputs from foreign markets. Consider a clothing wholesaler in Senegal, who wants to start selling high quality European-made jeans.

Search and trust frictions have historically made it hard for small firms in lower income countries to buy inputs from foreign markets. The growth in smartphone ownership and social media usage has the potential to alleviate these barriers.

Addressing firms’ misperceptions about the integrity of public entities boosts participation in Uganda’s public procurement. In contrast, addressing the lack of transparency alone fails to increase competition.

We study whether information frictions and corruption perceptions deter firms from doing business with the government.