Industrial Economics: 040557 UK The Industrial Sector in Developing Countries ao. Prof. Dr. B. Burcin Yurtoglu Erstmals am: MO, 10.03.2008 Mo 10:00‐12:00 Seminarraum 2 Hohenstaufengasse 9, 1.Stock Online‐Anmeldung Beschränkte Teilnehmerzahl, max. 30 Description: This course offers an introduction to selected issues on the industrial sector in developing countries. Its focus is on recent empirical micro‐level studies. The course will also introduce students to some of the relevant methodological and theoretical advances in the recent Industrial Organization literature. The course is designed for master level students and the goal is to prepare students to conduct independent research in this area. While lectures are around one particular topic, the readings address three broad themes: First, how do the specific institutional features of the business environment in developing countries affect the industrial sector, and how do firms respond to the resulting incentives and constraints? Second, what is the impact of the industrial sector on its environment, e.g. on wages and employment? Third, what can we learn about developing countries and the development process more generally by studying the industrial sector? Requirements: One presentation (20 %), one term paper (not to exceed 10 pages on the presented paper, 20%) and a final exam on the 23rd of June, 2008 (60%). Attendance is required. The papers suited for student ∙
presentations are marked with a ( ) below. Topics: March 10th, 2008 (Introduction: stylized facts and constraints) & (Regulation of Entry) Tybout, James (2000): Manufacturing Firms in Developing Countries: How Well Do They Do and Why? Journal of Economic Literature 38 (1), 11‐44. Batra, Geeta, Daniel Kaufmann, and Andrew Stone (2003): The Firms Speak: What the World Business Environment Survey Tells Us about Constraints on Private Sector Development. World Bank. Djankov, Simeon, Rafael La Porta, Florencio Lopez‐de‐Silanes and Andrei Shleifer (2002): The Regulation of Entry. Quarterly Journal of Economics 117 (1) 1‐37. Aghion, Philippe, Robin Burgess, Stephen Redding and Fabrizio Zilibotti (2005): Entry Liberalization and Inequality in Industrial Performance. Journal of the European Economic Association 3 (2‐3) 291‐302. •
Sivadasan, Jagadeesh (2003): Barriers to Entry and Productivity: Micro‐Evidence from Indian Manufacturing Sector Reforms. Manuscript, University of Michigan. 1
March 30th, 2008 (Financial markets I: Overview) Rajan, Raghuram and Luigi Zingales (1998): Financial Dependence and Growth. American Economic Review, 88 (3), 559‐586. Levine, Ross (1997): Financial Development and Economic Growth: Views and Agenda. Journal of Economic Literature, 35 (2), 688‐726. April 7th – April 28st , 2008 (Financial Markets II: Cross‐country / cross‐industry / firm level evidence for financing constraints Overview and methodological issues Fisman, Ray and Inessa Love (2003): Trade Credit, Financial Intermediary Development, and Industry Growth. Journal of Finance, 58(1) 353‐374. Schiantarelli, Fabio (1996): Financial Constraints and Investment: Methodological Issues and International Evidence. Oxford Review of Economic Policy, 12, 2, 70‐89. Bond, Stephen and Costas Meghir (1994): Dynamic Investment Models and the Firm's Financial Policy. Review of Economic Studies 61, 197‐222. Measurement •
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Fazzari, Steven, Glenn Hubbard and Bruce Peterson (1988): Financing Constraints and Corporate Investment. Brookings Papers on Economic Activity 141‐195. Kaplan, Steven and Luigi Zingales (1997): Do Investment‐Cash Flow Sensitivities Provide Useful Measures of Financing Constraints? Quarterly Journal of Economics 112 (1) 169‐215. Bigsten, Arne, Paul Collier, Stefan Dercon, Marcel Fafchamps, Bernard Gauthier, Jan Willem Gunning, Abena Oduro, Remco Oostendorp, Cathy Patillo, Måns Söderbom, Francis Teal, and Albert Zeufack (2003): Credit Constraints in Manufacturing Enterprises in Africa. Journal of African Economies 12 (1) 104‐125. Gelos, Gaston and Alejandro Werner (2002): Financial Liberalization, Credit Constraints, and Collateral: Investment in the Mexican Manufacturing Sector. Journal of Development Economics 67, 1‐27. Quantifying financing constraints •
Schündeln, Matthias (2005): Modeling Firm Dynamics to Identify the Cost of Financing Constraints in Ghanaian Manufacturing. Manuscript. •
Banerjee, Abhijit and Esther Duflo (2004): Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed Lending Program. Manuscript, MIT. May 5th, 2008 (Stock market liberalization) Henry, Peter Blair (2000). Stock Market Liberalization, Economic Reform, and Emerging Market Equity Prices, Journal of Finance, 55(2), 529‐564. •
Henry, Peter Blair (2000): Do Stock Market Liberalizations Cause Investment Booms? Journal of Financial Economics, 58(1‐2), 301‐334. 2
May 19th & May 26th 2008 (Corruption) Fisman, Ray (2001): Estimating the Value of Political Connections, American Economic Review, 91 (4) 1095‐1102. •
Fisman, Ray and Shang‐Jin Wei (2004): Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China. Journal of Political Economy 121 (21) 471‐496. •
Svensson, Jakob (2003): Who Must Pay Bribes and How Much? Evidence from a Cross ‐section of Firms. Quarterly Journal of Economics 118 (1): 207‐30. Svensson, Jakob (2005): Eight Questions about Corruption. Journal of Economic Perspectives 19 (3) 19‐
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Olken, Ben (2005): Monitoring Corruption: Evidence from a Field Experiment in Indonesia. NBER Working Paper #11753. •
Faccio, Mara (2006): Politically connected firms, American Economic Review, 96(1), March, 369‐
386. June 2nd , 2008 (State ownership and privatization) La Porta, Rafael and Florencio López‐De‐Silanes (1999): The benefits of privatization: evidence from Mexico. Quarterly Journal of Economics, 114 (4) 1, 1193‐1242. William L. Megginson and Natalie L. Sutter, Privatisation in Developing Countries, Corporate Governance: an International Review, 14 (4), 234‐265. June 9th & June 16th , 2008 (Uncertainty) Pindyck, Robert (1991): Irreversibility, Uncertainty, and Investment. Journal of Economic Literature 29, 3 1110‐1148. Pattillo, Catherine (1998): Investment, Uncertainty, and Irreversibility in Ghana. IMF Staff Papers, 45 (3) 522‐553. •
Serven, Luis (2003): Real‐exchange‐rate uncertainty and private investment in LDCS Review of Economics and Statistics, 85 (1) 212‐218. Svensson, Jakob (1998): Investment, property rights and political instability: theory and evidence. European Economic Review 42 (7) 1317‐1341. •
Fafchamps, Marcel, Jan Willem Gunning and Remco Oostendorp (2000): Inventories and Risk in African Manufacturing. Economic Journal, 110(466) 861‐893. Le Khuong Ninh, Niels Hermes and Ger Lanjouw. (2004): Investment, uncertainty and irreversibility. Economics of Transition 12 (2) 307‐332. Roe, Mark J. and Siegel, Jordan I., "Political Instability and Financial Development" (October 9, 2007). Available at SSRN: http://ssrn.com/abstract=963214 3