Firm Performance and Development - Rémi Bazillier

Dec 14, 2017 - What are the possible explanations for the lack of significance for some coefficients in column [8]? (1 point). 3. Management quality is not ...
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Université Paris 1 Panthéon-Sorbonne Master 2 Development Economics « Firm Performance and Development » Rémi Bazillier

Thursday, December 14th, 14h – 17h Exercice 1 (7 points) The following table is taken from Soderbom and Teal (2004, JDE) on Ghanean firms.

1. Comment the main results. What is the main source of inefficiency identified in the paper? (2 point) 2. What are the possible explanations for the lack of significance for some coefficients in column [8]? (1 point) 3. Management quality is not observable here. Can we control for the potential effect of management quality in these estimates? Under which assumption? (1 point) 4. A recent literature has shown how management quality is likely to affect productivity. Why bad management quality is likely to be a serious concern in developing countries? Detail your answer (3 points).

Exercice 2 (6 points) The following table is from Eskeland and Harrison (2003).

1. From this regression table, what can you say on the Pollution Haven Hypothesis (PHH) in Côte d’Ivoire Morocco, Venezuela and Mexico? (2 points) 2. Is it consistent with the rest of the literature on the PHH? Summarize the main insights of this literature. (3 points). 3. Why environmental regulations, in some specific context, may increase competitiveness? (1 point)

Exercice 3 “Labor market policies-minimum wages, job security regulations, and social security - are usually intended to raise welfare or reduce exploitation. But they actually work to raise the cost of labor in the formal sector and reduce labor demand, increase the supply of labor to the rural and urban informal sectors, and thus depress labor incomes where most of the poor are found" (World Bank, 1990, p.63) 1. This is a quote from the 1990 World Development Report. What is the theoretical underpinning of such statement? (2 points) 2. What are the three main theories justifying labour regulations according to Botero et al. (2004). Explain briefly. (3 points). 3. In their estimate of the impact of labor regulation on economic performance, Botero et al. (2004) propose to use legal origins as an instrument. What can you say about such index? (2 points)