a subsector approach to small enterprise promotion and research abstract this paper introduces a diagnostic research methodology designed to help target small enterprise development efforts in less developed countries it argues that research should focus on commodity specific subsectors which include the competing channels and supporting input and output linkages of small firms using this approach analysts can improve their understanding of small enterprise dynamics interventions that may promote them at low cost and policies that constrain small firm growth

gender differences in trust and reciprocity evidence from a large scale experiment with heterogeneous subjects this article examines gender differences in an experimental trust game recent studies have shown that men trust more and that women are more reciprocal in laboratory experiments participants in these studies however are typically university students who may not be representative of the entire population in this study we use data from a large scale experiment with heterogeneous subjects who are representative of the german population we find that men exhibit not only more trusting behaviour but also more reciprocating behaviour than women moreover our results are indicative of age dependent gender differences for men we find an inverse u shaped relationship between age on the one hand and both trust and reciprocity on the other however we do not find age effects for women

women ask for less only from men evidence from bargaining in the field abstract data from a tv show provide the opportunity to study gender differences and gender interaction effects in bargaining with sizable stakes a proposer and a responder who is selected by the proposer bargain over a fixed pie proposers are in a stronger bargaining position because they have a positive outside option and information on the size of the pie while responders have neither the matching between male proposers and female responders stands as the most favorable for proposers women as responders demand less only from male proposers which explains the difference in earnings

of networks and markets the rise and rise of a south indian town the example of tiruppur s cotton knitwear industry abstract tiruppur town is the center of a tightly clustered range of activities related to the cotton knitwear industry the successful and dramatic expansion which has taken place over the last 15 years has meant many more jobs limited technological improvement improved quality in yarn and fabric and an increasingly diverse range of garments for the larger firms in the industry access to export markets has been the driving force to improving their competitiveness wages remain low and working conditions poor however perhaps partly because capital concentration has not on the whole been accompanied by centralized vertically integrated production nevertheless clustering and dense interfirm networks provide advantages for firms of all sizes since process specialization is spatially divisible

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

from technological catch up to innovation based economic growth south korea and taiwan compared abstract this paper sets out to analyse the divergent models pursued by south korea and taiwan in regard to technological catching up and their ongoing transition towards innovation based economies it is found that south korea s former high debt and chaebol dominated model inclined it to pursue a schumpeterian scale based technological development while taiwan s former pro stability small and medium sized enterprise sme based model tended to favour its emphasis on a neo marshallian network based technological development it will be argued that the state s approach to economic liberalisation and firms demand for capital for technological upgrading are the major factors that have underpinned the adjustment efforts of these two countries

upgrading in global value chains lessons from latin american clusters it has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries nevertheless recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels in this study we contribute to this debate focusing on the analysis of the relationships existing between clustering global value chains upgrading and sectoral patterns of innovation in latin america we find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains

upgrading traditional technologies in small scale industry clusters collaboration and innovation adoption in indonesia there is by now sufficient evidence that small scale industry clusters matter in developing countries this article intends to contribute to the discussion on cluster transformation by focusing on innovation adoption in a roof tile cluster in indonesia clustering allows small scale enterprises to grow in riskable steps by sharing the costs and risks through collaboration using data from longitudinal field surveys we find that technological change is not only a matter of comparing costs and benefits of technologies but also a matter of access collaboration among leaders is crucial in innovation adoption when technological indivisibilities play a role in our case study it appears that joint action should be viewed as a means to an end only it was given up in favour of traditional hierarchies in the cluster as soon as possible

india s industrial development an interpretative survey in recent years there has been a significant shift in indian industrial strategy from a heavily regulated and inward oriented structure toward significant liberalization in both domestic and trade policy at the same time indian industry has sustained its historically impressive growth performance the two waves of liberalization in the 1980s and after 1991 have been associated with significant structural change there is some question however as to whether this change in strategic orientation is consistent with rising per capita incomes this paper reviews these changing strategic perspectives and the economic performance of the industrial sector in the post independence period it concludes that most studies which have been undertaken of indian industrialization have been macroeconomic in nature and that there has been a poor tradition of microeconomic research into the determinants of industrial competitiveness

of contracts and subcontracts small firms in vertically dis integrated production distribution systems in ldcs abstract the increasing complexity in production and distribution which accompanies development provides opportunities for small firms to participate by undertaking a limited range of activities in vertically dis integrated systems through subcontracting arrangements in addition to reducing costs in particular activities this facilitates the growth of production and distribution systems which are more complex than one integrated firm could manage or finance on its own for this pattern to work though contracting difficulties arising from market imperfections must be overcome alternative ways used by third world firms to solve these coordination problems are identified and policy implications suggested

race and gender discrimination in bargaining for a new car more than three hundred paired audits at new car dealerships reveal that dealers quoted significantly lower prices to white males than to black or female test buyers using identical scripted bargaining strategies ancillary evidence suggests that the dealerships disparate treatment of women and blacks may be caused by dealers statistical inferences about consumers reservation prices but the data do not strongly support any single theory of discrimination copyright 1995 by american economic association

education choices and returns on the labor and marriage markets evidence from data on subjective expectations in this paper we analyze the role of expected labor and marriage market returns as determinants of the college enrollment decisions of mexican high school graduates moreover we investigate whether the relative weights of these factors differ by gender we use data on individuals expectations regarding future labor market outcomes which we directly elicited from the youths and two different measures of marriage market returns first marriage market returns are proxied by the net supply of potential partners in the youths local marriage markets second we use data which elicits youths beliefs about their future spouse s earnings conditional on their own education level we find that labor market as well as marriage market returns are important determinants of the college enrollment decision however boys and girls preferences differ in terms of the relative role of the two determinants in that the relative weight of labor market versus marriage market returns is larger for boys than for girls

trade and industrial policy on an uneven playing field the case of the deciduous fruit canning industry in south africa the deciduous fruit canning industry dfci is a resource and labor intensive industry with a high trade ratio it offers the prospect of being a significant source of employment and export earnings for a number of southern hemisphere countries which enjoy a considerable comparative advantage market distortions severely constrain this outcome however most importantly a combination of protection and subsidies in the industrially advanced countries in addition as in other sectors globalization is increasingly associated with processes in which value added activities are located in the major markets of the industrialized countries this paper examines the dfci in south africa and explores the consequences of market distortions and the shifting location of profitable activities for both industrial and trade policy in that country

are women more risk averse we find that single women exhibit relatively more risk aversion in financial decision making than single men using u s sample data we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking as wealth increases the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men gender differences in financial risk taking are also influenced by age race and number of children greater financial risk aversion may provide an explanation for women s lower levels of wealth compared with men s jel j16 d81 g11

knowing when to ask the cost of leaning in women s reluctance to negotiate is often used to explain the gender wage gap popularizing the push for women to lean in and negotiate more examining an environment in which women achieve positi

the transition to flexible specialisation in the us film industry external economice the division of labour and the crossing of industrial divides there is increasing evidence that mass production methods are losing their dominance in the advanced industrial economies and that various forms of flexible production organization are on the rise the transition from mass production organization to flexible specialization is analyzed in detail through a case study of the film industry where it is shown that a system of production once based on product standardization high levels of vertical integration and stable oligopolistic market structures has after a period of vertical disintegration given way to a production system based on a deep division of labor between firms and high levels of flexibility in both product design and output levels the transition may be the result of increasing external economies of scale stemming from the development of the industry s social division of labor copyright 1989 by oxford university press

industrial districts old wine in new bottles harrison b 1992 industrial districts old wine in new bottles reg studies 26 469 483 according to the theory of industrial districts a new wave of economic growth is being led in a number of regions in europe north america and east asia by spatially concentrated networks of mostly small and medium sized enterprises often using flexible production technology and characterized by extensive local interfirm linkages does this amount to a re emergence of the dominance of what urban and regional economists call agglomeration economies over the well known pressures on business to spatially disperse its operations neoclassical economic theorizing from marshall to perroux provides one perspective on the contemporary industrial district phenomenon another is afforded by granovetter s more recent elaboration of the ideas of embedding under and over socialization confronting each of these theoretical approaches with the other leads me to conclude that the industrial district prototypes involv

agglomeration advantages and capability building in industrial clusters the missing link accumulation of technological capability is crucial for industrial growth and competitiveness of firms particularly in the context of liberalisation and increasing international economic integration the article sheds new light on the forces driving capability building by complementing the micro economic perspective on learning with a meso economic perspective that takes account of interaction effects arising from firms embeddedness in regional networks the missing link at the interface between the two levels is explored by means of a taxonomy linking various agglomeration advantages to investments in technological effort the framework results in new policy relevant insights about the factors underpinning the acquisition of capabilities in comparison to conventional studies a case study about farm equipment manufacturing in pakistan s punjab province is used as an empirical illustration

gender differences in time preferences this paper reports the results from a large online experiment in which we examine gender differences in time preferences subjects choose in different situations between receiving an immediate payment and receiving a different sum later we find that more men than women are impatient and choose to receive the immediate payment at least if the implicit interest rate of the late option is neither too high nor too low

what s in a picture evidence of discrimination from prosper com abstract we find evidence of significant racial disparities in a new type of credit market known as peer to peer lending loan listings with blacks in the attached picture are 25 to 35 percent less likely to receive funding than those of whites with similar credit profiles despite the higher average interest rates charged to blacks lenders making such loans earn a lower net return compared to loans made to whites with similar credit profiles because blacks have higher relative default rates these results provide insight into whether the discrimination we find is taste based or statistical

the visible hand race and online market outcomes we examine the effect of race on market outcomes by selling ipods through local online classified advertisements throughout the us each advertisement features a photograph including a dark or light skinned hand or one with a wrist tattoo black sellers receive fewer and lower offers than white sellers and the correspondence with black sellers indicates lower levels of trust black sellers outcomes are particularly poor in thin markets suggesting that discrimination may not survive competition among buyers and those with the most racial isolation and property crime consistent with channels through which statistical discrimination might operate economic outcomes in the us are highly correlated with race but the causal mechanisms underlying these correlations are not well understood in particular it remains unclear how much of the correlation is due to discrimination and how much is due to other characteristics that are correlated with race such as education there is an extensive literature on the effect of race on market outcomes focusing on both labour and goods including housing markets however discrimination is not a monolithic phenomenon and it is important to investigate its extent and causes in a variety of different contexts across which they may differ our study asks the following question when the typical person engages in a consumer transaction usually as a buyer does he or she try to avoid dealing with minority sellers and does she treat minority sellers differently

equilibrium in a market with sequential bargaining this paper considers a market where pairs of agents who are interested in carrying out a transaction are brought together by a stochastic process and upon meeting initiate a bargaining process over the terms of the transaction the basic bargaining problem is treated with the strategic approach the paper derives the steady state equilibrium agreements analyzes their dependence on market conditions such as the relative numbers of agents of different types and discusses their relations with the competitive equilibrium outcome and other results in the search equilibrium literature this paper considers a market that operates in the following way pairs of agents who have mutual interest in carrying out a transaction are brought together by a stochastic process when two agents meet they initiate a bargaining process over the terms of the transaction if two agents reach an agreement a transaction takes place and they leave the market of course the bargaining positions and hence the agreement reached in any particular meeting will be affected by the conditions prevailing in the market these will include the chances that each of the negotiating parties have of meeting other partners in the event that the agreement in the current negotiations is delayed also the expected length of time required to achieve an alternative transaction and the expected behavior of alternative partners the study of such a market mechanism is of interest for two reasons firstly it captures some realistic aspects of the trade in certain specific markets e g asset markets such as housing and some labor markets secondly it contributes to an understanding of the micro mechanisms of price formation and their role in shaping market outcomes in both cases the features studied are largely neglected in the traditional market equilibrium analyses the related literature includes the articles by diamond 4 5 diamond and maskin 6 mortensen 8 9 and zusman and bell 13 these articles consider markets of the type described above in which transactions are concluded at pairwise meetings of agents the major difference between our work and these articles is in the approach to the basic bargaining problem in the cited articles it is assumed that a meeting is concluded with an instantaneous agreement which divides the associated surplus in an arbitrary predetermined way when the surplus is assumed to be divided equally the division rule is in fact nash s axiomatic bargaining solution in contrast the present paper treats the basic bargaining problem with the strategic approach see rubinstein 19 which constitutes an attempt to look into the bargaining black box this approach explicitly models the time dimension of the bargaining process describes in detail the bargaining procedure and justifies the agreement as a perfect equilibrium in

an inquiry into the development process of village industries the case of a knitwear cluster in northern vietnam abstract while village industries are known to have high potential to grow their growth process has seldom been analysed this study explores the development process of a rapidly growing village based garment cluster in northern vietnam we found that both the human capital and social capital measured by the kinship ties with overseas vietnamese traders of the proprietors facilitated their innovative entry into new export markets furthermore general human capital acquired by schooling and specific human capital acquired by management experience are found to have contributed to the adoption of a vertically integrated production system which in turn contributed to enhanced enterprise performance

of age sex and money insights from corporate officer compensation on the wage inequality between genders this paper shows that the gender and age of the wage setter are crucial determinants of the disparity in wages between sexes we document our findings using a data set on compensation of corporate officers that is uniquely suited for this analysis because officer wages are set by chief executive officers ceos we show that ceos pay officers of the opposite gender less than officers of their own gender even when controlling for job characteristics older and male ceos exhibit the greatest propensity to differentiate on the basis of sex female officers receive smaller raises if the firm is headed by a man our results suggest that ceo gender and age are economically more important determinants of officer compensation than are firm stock performance stock volatility or return on assets this paper was accepted by uri gneezy behavioral economics

path dependence in regional development persistence and change in three industrial clusters in santa catarina brazil abstract the concept of path dependence is useful to understand why economic actors who face a fundamental change in the overall incentive structure behave in a way that would appear irrational to the external observer industrial clusters in the southern brazilian state of santa catarina gave an impressive performance in the closed market of the past it was perfectly rational for individual firms to try to internalize as many activities as possible for various reasons thus emerged an extremely noncooperative business culture which does not change easily even under the new conditions of an opening market and increasing competitive pressure firms try to adjust to the new conditions based on their established practices yet the comparison between different clusters reveals that under certain conditions the behavior of firms can change profoundly toward cooperation and collective efficiency these conditions include an existential crisis the presence of change agents and the existence of organizations they can use and the existence of a role model that shows a possible alternative path for the adjustment process the most important changes are attempts to stimulate cooperation between firms and attempts to shape the supporting environment most changes occur inside the business community the political administrative system at the municipal and state levels is much more resistant to change

do women shy away from competition do men compete too much we examine whether men and women of the same ability differ in their selection into a competitive environment participants in a laboratory experiment solve a real task first under a noncompetitive piece rate and then a competitive tournament incentive scheme although there are no gender differences in performance men select the tournament twice as much as women when choosing their compensation scheme for the next performance while 73 percent of the men select the tournament only 35 percent of the women make this choice this gender gap in tournament entry is not explained by performance and factors such as risk and feedback aversion only playa negligible role instead the tournament entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition the result is that women shy away from competition and men embrace it

prejudice and wages an empirical assessment of becker s the economics of discrimination we test the predictions from becker s 1957 seminal work on employer prejudice and find that relative black wages a vary negatively with the prejudice of the marginal white in a state b vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state and c vary negatively with the fraction of a state that is black our estimates suggest that one quarter of the racial wage gap is due to prejudice with nontrivial consequences for black lifetime earnings

what drives taxi drivers a field experiment on fraud in a market for credence goods credence goods are characterized by informational a symmetries between sellers and consumers that invite fraudulent behavior by seller s this paper presents the results of a natural field experiment on taxi rides in athens g reece set up to measure different types of fraud and to examine the influence of passengers p resumed information and income on the extent of fraud results reveal that taxi drivers c heat passengers in systematic ways passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system l eads to manipulated bills higher income seems to lead to more fraud

can industrial outwork enhance homeworkers capabilities evidence from clusters in south asia summary there has been an increasing informalization and feminization of the labor force in developing countries over the past few decades one aspect of these twin phenomena is the growth of subcontracted homework in manufacturing homework has a dual and contradictory character it can be the source of exploitation of workers but under some conditions it can foster human development and the emergence of microenterprises and promote local development this paper draws on surveys carried out in two low income south asian countries india and pakistan where homework is widespread it examines the social protection needs of these women workers and also argues for public action to promote such work as a possible new labor intensive growth strategy in developing countries

the triple c approach to local industrial policy abstract in both developed and developing countries there is mounting evidence that clustering and networking help small and medium sized manufacturers to raise their competitiveness the role of public policy in this process is less clear the european experience suggests that local and regional government can play an important role equally if not more interesting experiences can be found in developing countries their analysis constitutes the core of this paper the lessons can be summarized as the triple c which stands for customer oriented collective and cumulative

gender economics an assessment concerns about gender equality have jumped to the forefront of public debate in recent years and gender economics is slowly affirming its place as a major field of study this assessment examines where we are in terms of gender equality it reviews the theoretical foundations that can explain existing inequalities and documents the empirical findings supported by the theories identifying avenues for future research and providing a fruitful framework to think about the effectiveness of policies and interventions targeting gender inequality in doing so i provide the foundations against which the contributions in this issue can be placed

dealer price discrimination in new car purchases evidence from the consumer expenditure survey this paper documents the variation in dealer discounts for new cars using transactions price data from the consumer expenditure survey consumer specific characteristics fail to explain dealer discounts whereas model market specific and purchase transaction variables e g first time purchase trade in and financing through dealer do explain them the results contradict earlier findings of race and gender discrimination based on a controlled experiment this contradiction is reconciled by examining the higher moments of the empirical discount distribution while mean and median markups do not vary by race and gender minority purchases are characterized by higher dispersion this may rationalize the disparate treatment of minorities by dealers documented in the controlled experiment

incomplete information bargaining with outside opportunities we consider two kinds of outside opportunity that a seller of an indivisible good might have selling to a different buyer and consuming the good herself in both models the seller is uncertain about the buyer s valuation and becomes more pessimistic over time when the seller becomes sufficiently pessimistic she prefers the outside opportunity so she will not bargain indefinitely with the current buyer despite the resulting finite horizon nature of negotiations the link between the buyer s willingness to accept an offer and the seller s eagerness to go outside generates multiple equilibria

learning adjustment and economic development transforming firms the state and associations in chile abstract this article views learning processes as key to successful economic adjustment it discusses results of research conducted in chile focused on the agroindustry and footwear sectors it identifies specific problems that large and small firms face to upgrade production and stresses the limits of focusing exclusively on market reforms for achieving growth the article discusses how institutions reshape to facilitate learning and improve performance in chile particularly the relations between firms the reorientation of trade associations and the state s role as facilitator of collective learning processes

gender effects in the credence goods market an experimental study abstract in this paper we offer further explanation for differences in earnings across genders we investigate difference in preferences in payment systems for credence goods we find that women were no less likely to select variable rate payment schemes as compensation for providing credence goods than men however overall earnings remained higher for men than for women disaggregating behavior by type of payment and gender reveals that women who chose fee for service provided significantly fewer units of services paid for than men who chose fee for service this difference accounts for the lower overall earnings for women in our experiments

gender differences in bargaining outcomes a field experiment on discrimination abstract relying on a commonly used fixed offer bargaining script we examine gender differences in bargaining outcomes in a highly competitive and frequently used market the taxi market in lima peru our bargaining script secures that only the seller can change prices and terminate negotiations thus we are able to examine differences in the seller s entire path of negotiation and in the reservation price at which they are willing to trade we find that male and female passengers who use the same bargaining script are not treated equally men face higher initial prices final prices and rejection rates these differences are consistent with male drivers being more reluctant to give in to demanding negotiations by male passengers and with male passengers being perceived as having high valuations to identify whether taste based or statistical discrimination drives the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating the signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination thus in the limiting case of a highly competitive market with experienced traders we do not find evidence of taste based discrimination the differential observed is however consistent with statistical discrimination

trust social capital and economic development many argue that elements of a society s norms culture or social capital are central to understanding its development however these notions have been difficult to capture in economic models here we explore ap ossible role for trustworthiness as corresponding to social capital individuals are trustworthy when they perform in accordance with promises even if this does not maximize their payoffs the usual focus on incentive structures in motivating behaviour plays no role here instead we emphasize more deep seated modes of behaviour and consider trustworthy agents being socialized to act as they do to model this socialization we borrow from a process of preference evolution pioneered by bisin and verdier 2001 the model developed endogenously accounts for social capital and explores its role in the process of economic development it captures in a simple formal way the interaction between social capital and the economy s productive processes the results obtained caution against rapid reform and provide an explanation for why late developing countries may not easily be able to transplant the modes of production that have proved useful in the west

globalisation of knowledge production and regional innovation policy supporting specialized hubs in the bangalore software industry abstract this paper is concerned with the changing role of regional innovation systems and regional policies in supporting the transition of indigenous firms in developing countries from competing on low costs towards becoming knowledge providers in global value chains special attention is paid to policies supporting the emergence and development of the regional innovation system in this transition process regional innovation systems in developing countries have very recently started to be conceptualised as specialized hubs in global innovation and production networks asheim b coenen l vang lauridsen j 2007 face to face buzz and knowledge bases socio spatial implications for learning innovation and innovation policy environment and planning c government and policy 25 5 655 670 chaminade c vang j 2006a innovation policy for small and medium size smes in asia an innovation systems perspective in yeung h ed handbook of research on asian business edward elgar cheltenham maggi c 2007 the salmon farming and processing cluster in southern chile in pietrobello c rabellotti r eds upgrading and governance in clusters and value chains in latin america harvard university press a specialized hub refers to a node in a global value chain that mainly undertakes one or a few of the activities required for the production and development of a given good or service or serves a particular segment of the global market in global value chains firms in developing countries have traditionally been responsible for the lowest added value activities however a few emerging regional innovation systems in developing countries are beginning to challenge this scenario by rapidly upgrading in the value chain there is however still only a poorly developed understanding of how the system of innovation emerges and evolves to support this transition process and what the role of regional innovation policy is in building the regional conditions that support indigenous small and medium size enterprises smes in this transition process this paper aims at reducing this omission by analyzing the co evolution of the strategies of indigenous smes and the regional innovation system of bangalore india

collective effects in italian and mexican footwear industrial clusters the focus of this article is on the analysis of the collective economic effects deriving from the intense set of backward forward labor horizontal and institutional linkages existing within clusters of enterprises among the economic effects two main categories are distinguished external economies which are the spontaneous by product of economic activities undertaken within the clusters and cooperation effects which are the results of explicit and deliberate cooperative behaviors of the economic actors

infrastructure and cluster development a case study of handloom weavers in rural ethiopia abstract clustering is an important structure of production in the rural nonfarm sector based on a primary survey of rural handloom clusters in ethiopia this article examines the mechanism and performance of clustering given weak financial institutions clustered producers and traders use trade credits to ease working capital constraints moreover geographical clustering enables entrepreneurs with limited capital to enter the business through shared workspaces and fine division of labour an improvement in infrastructure can further enhance firm performance in a cluster in towns with electricity access producers work longer hours by sharing lit workspaces at lower rental cost

virtual incubation in industrial clusters a case study in pakistan abstract in industrial clusters transaction costs are kept low and free riding is discouraged by a community mechanism developed through dense and repeated interactions among entrepreneurs in such environments new entrants without established reputations and connections are put at a distinct disadvantage this negative effect on new entry must be neutralised for an industrial cluster to expand using enterprise level data from pakistan this study finds that personal networks are indeed important for successful enterprise operation which works to the advantage of incumbents but that subcontracting plays the role of virtual incubation in nurturing new enterprises reinforcing the cluster s dynamism

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

gender differences in willingness to guess we present the results of an experiment that explores whether women are less willing than men to guess on multiple choice tests our test consists of practice questions from sat ii history tests we vary whether a penalty is imposed for a wrong answer and the salience of the evaluative nature of the task we find that when no penalty is assessed for a wrong answer all test takers answer every question but when there is a penalty for wrong answers women answer significantly fewer questions than men we see no differences in knowledge of the material or confidence in the test takers and differences in risk preferences explain less than half of the observed gap making the evaluative aspect of the test more salient does not impact the gender gap we show that conditional on their knowledge of the material test takers who skip questions do significantly worse on our test data as supplemental material are available at http dx doi org 10 1287 mnsc 2013 1776 this paper was accepted by uri gneezy behavioral economics

trust and inter firm relations in developing and transition economies the role of trust in facilitating economic growth has been highlighted in previous contributions to this journal in order to take this debate forward this article argues 1 that more attention needs to be given to the relationship between sanctions and trust and 2 that it is worth distinguishing between the minimal trust for making markets effective and the extended trust required for deeper kinds of inter firm co operation to work the article goes on to ask why minimal trust is lacking and so hard to construct in the republics of the former soviet union it then examines how extended trust grows or can be made to grow in industrial supply chains and clusters in developing countries

discrimination nepotism and long run wage differentials the wage discrimination model developed by becker has been criticized for predicting that competitive forces will lead to the disappearance of racial discrimination in the long run we have reformulated the model in terms of nepotism toward white workers rather than discrimination against black workers in this new framework both nepotistic and taste neutral firms are expected to survive the competitive struggle in the long run therefore the new framework is consistent with long run as well as short run racial wage differentials

pay differences among the highly paid the male female earnings gap in lawyers salaries this article uses very detailed information on graduates of the university of michigan law school to examine male female pay differences in that population men and women in this population have virtually identical human capital on graduation from law school allowing us to examine carefully the different impact of children and work history on men s and women s careers and earnings taking time from work in order to care for children reduces wages significantly but a rich set of controls including childcare work history school performance and job setting measures still leave one fourth to one third of the earnings gap unexplained

selective spatial closure and local economic development what do we learn from the argentine local currency systems summary this paper discusses local currency systems as an instrument of selective spatial closure to mitigate impacts of externally induced changes and to promote endogenous local economic development drawing on data collected in argentina it was found that local currency systems provided relatively protected economic spaces thus enabling poor households and especially women to launch micro enterprises and diversify income sources they also supported existing enterprises by offering an emergency market outlet and when combined with other measures by building local trading and production networks following recent theory on local economic development the argentine case represents an example of local economic regeneration

the role of large producers in industrial districts a case study of high technology systems houses in southern california scott a j 1992 the role of large producers in industrial districts a case study of high technology systems houses in southern california reg studies 26 265 275 a generalized concept of industrial districts is proposed the concept hinges on the intertwined notions of the social division of labour external economies and locational agglomeration it is argued that large production units often play an important part in sustaining the growth and development of industrial districts and that such districts need not be composed solely of small production units the argument is illustrated by means of a case study of the role of large systems houses within the high technology industrial districts of southern california it is concluded that neither large establishments nor the internationalization of the economy necessarily threaten the continued viability of industrial districts it is also suggested that industrial districts represent a very widely developed phenomenon in time and space scott a j

do women avoid salary negotiations evidence from a large scale natural field experiment one explanation advanced for the persistent gender pay differences in labor markets is that women avoid salary negotiations by using a natural field experiment that randomizes nearly 2 500 job seekers into jobs that vary important details of the labor contract we are able to observe both the extent of salary negotiations and the nature of sorting we find that when there is no explicit statement that wages are negotiable men are more likely to negotiate for a higher wage whereas women are more likely to signal their willingness to work for a lower wage however when we explicitly mention the possibility that wages are negotiable these differences disappear completely in terms of sorting we find that men in contrast to women prefer job environments where the rules of wage determination are ambiguous this leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous this paper was accepted by gerard p cachon behavioral economics

how to promote clusters policy experiences from latin america abstract in this paper we propose to differentiate between three types of clusters when it comes to formulating cluster oriented policies in latin america survival clusters of micro and small scale enterprises owe their existence more to unfavorable macroeconomic conditions and less to entrepreneurial competence and dynamism their competitive potential is limited support measures should mainly aim at improving the conditions for survival since these clusters are important in creating employment opportunities the impetus should be to break through the low skills low investment vicious circle more advanced and differentiated mass producers have been flourishing in the import substitution era but are coming under enormous pressure with the transition to open economies in these clusters the main challenge is to create an environment that stimulates and supports learning innovation and constant upgrading clusters of transnational corporations are typically dominated by foreign firms not only at the final assembly stage but also in parts production these clusters often are showcases of best practice manufacturing this can be used to stimulate the upgrading of domestic firms notably by involving them in the supply chain of transnationals

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

formation of foreign direct investment clustering a new path to local economic development the case of qingdao jun yeup kim and le yin zhang formation of foreign direct investment clustering a new path to local economic development the case of qingdao regional studies this paper investigates the clustering of chinese electronics manufacturers large and small alongside established foreign producers in qingdao north china it examines how the supplier buyer linkages between foreign invested enterprises fies and local firms have driven the development of a successful electronic industry cluster around development zones established by the local authority underpinning the success of the large domestic firms both at home and abroad it also analyses how fies collaboration with local firms fosters local economic development in qingdao by integrating the theoretical perspectives of the hub and spoke model from economic geography and flagship and five partner s model in the science of strategic management it develops its own theoretical lens to investigate the inter firm network between the fies and local fir

bargaining theory inflation and cyclical strike activity in manufacturing this paper presents a theoretical and empirical analysis of cyclical movements in strike activity the first part of the paper develops a bargaining model that demonstrates the crucial role of limi

technique and system the spread of japanese management techniques to developing countries in this paper a distinction is drawn between the isolated use of individual japanese management techniques and their adoption in an integrated package as part of a production system although the use of individual techniques does confer significant benefits to innovating firms it is clear from international experience that the major gains arise from systemic application the central objective of this paper is to explore whether there are obstacles specific to less developed countries ldcs in the systemic application of japanese management techniques the major forces driving the adoption of these new management techniques are reviewed based upon research in latin america india and zimbabwe then three major ldc specific factors affecting systemic adoption are considered human resources interfirm cooperation and management

gender differences in experimental wage negotiations i introduction gender wage gaps have been the subject of extensive research in labor economics although this gap has narrowed in the last decades blau and kahn 2003 report that women still receive lower wages than men in many countries traditionally differences in the accumulation of human capital and discrimination are seen as the main factors responsible for this wage gap bertrand 2011 however even after controlling for various measures of human capital the wages of men and women differ significantly and this wage gap persists over time recently alternative explanations have been analyzed more closely such as gender differences in preferences croson and gneezy 2009 risk attitudes eckel and grossman 2008 and responses to competitive situations gneezy leonard and list 2009 in many labor relationships wages are determined by bilateral bargaining hence another source of the persistent gender wage gap could be differences in bargaining behavior between women and men babcock and laschever 2003 find that 57 of male graduate business students bargain over their starting salaries while only 7 of women do so consequently male starting salaries are 7 6 higher than those obtained by women investigating the salary negotiating behaviors and starting salary outcomes of graduating master of business administration mba students gerhart and rynes 1991 find that women obtain lower salary increments when negotiating than men wood et al 1993 report significant male female pay differences of law school graduates both 1 year and 15 years after graduation apart from wages team production hiring and promotion decisions are further domains where significant gender differences emerge sutter et al 2009 at least some of these differences might also be related to differences in the bargaining behavior of men and women this paper studies whether men and women behave differently in wage negotiations 1 the analysis is based on a laboratory experiment with face to face alternating offers wage bargaining allowing experimental subjects to see each other in face to face negotiations and thus to easily identify their bargaining partner s gender allows us to analyze gender differences our results suggest that gender and gender pairing play an important role in bargaining processes in our experimental wage negotiations male employees are able to negotiate higher wages than female employees moreover male employers pay lower wages to female employees than female employers pay to male employees we find that men acting as employees achieve more favorable outcomes than female employees because they already demand a larger share for themselves when making their first offers when acting as employers we do not find behavioral differences between men and women overall these results provide further evidence that part of the gender wage gap can be attributed to behavioral differences in wage negotiations the paper is organized as follows section ii provides a brief review of the literature on gender differences in bargaining experiments in section iii we present our experimental design section iv discusses the effects of gender and gender pairing in the bargaining process section v concludes ii gender differences and bargaining a number of studies have examined differences in the behavior of women and men in bargaining situations in a controlled field study ayres and siegelman 1995 analyze the bargaining outcomes of men and women negotiating the price of a new car they report that car sellers offer male buyers lower prices than female buyers ayres 1991 finds that women obtain worse bargaining outcomes than men negotiating with a female seller save soderbergh 2009 finds that female university graduates propose lower wage bids than male university graduates and also receive lower wage offers than male students conducting field experiments in lima peru castillo et al

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

wages employment and statistical discrimination evidence from the laboratory i introduction while taste based discrimination becker 1957 is driven by prejudice research on statistical discrimination attempts to explain differential treatment of individuals unrelated to prejudice in essence statistical discrimination results when the actual or assumed statistical properties of a group are applied to anyone belonging to that group differential treatment based on lower average outcomes of one s group e g minorities females was considered a starting point for modeling of statistical discrimination see phelps 1972 however labor market researchers then considered that statistical discrimination could result from measures other than the average outcomes of one s group see aigner and cain 1977 lundberg and startz 1983 theoretical models have explored various reasons why statistical discrimination might arise in varied contexts most notable are the models based on differential screening or communication costs cornell and welch 1996 lang 1986 noisier productivity signals see discussion in aigner and cain 1977 or incomplete information lundberg and startz 1983 1 field studies some of which involve experimental manipulations have uncovered evidence of statistical discrimination in mortgage lending ladd 1998 auto sales ayers and siegelman 1995 goldberg 1996 harless and hoffer 2002 sports card price negotiations list 2004 law enforcement decisions applebaum 1996 exam grading hanna and linden 2012 taxi fare negotiations castillo et al 2013 and vehicle repair estimates gneezy and list 2006 in labor markets some discrimination may be due to factors other than productivity characteristics neumark 1999 but the evidence for statistical discrimination based on race has been elusive see altonji and pierret 2001 identifying statistical discrimination from field data is complicated by the fact that it may arise as first moment or second moment statistical discrimination and they are difficult to disentangle empirically more controlled laboratory studies have also examined statistical discrimination anderson and haupert 1999 castillo and petrie 2010 davis 1987 dickinson and oaxaca 2009 fershtman and gneezy 2001 masclet peterle and larribeau 2012 2 findings from these laboratory studies indicate that statistical discrimination may result from aversion to risk mistaken stereotypes biased probability assessments or incomplete information the benefit of the laboratory approach is our ability to control and cleanly identify the source of the discrimination if it exists whether taste based or statistical discrimination is most always measured along a single dimension such as vehicle pricing labor market wages group choice or job assignments 3 however in many instances multiple avenues for discrimination exist simultaneously and to focus on only one may produce a systematically biased view of the prevalence of statistically based discrimination 4 in this paper we examine statistical discrimination in a controlled experimental environment statistical discrimination in our study can only be based on productivity distribution risk attached to worker groups we not only cleanly separate taste based from statistical discrimination but we also cleanly isolate second moment statistical discrimination in a way not possible from field data building on dickinson and oaxaca 2009 our key contribution is to examine an environment in which discrimination may be exercised simultaneously along the dimensions of both wages and employment rates this more closely approximates the field environments we hope to study where discrimination may exist in terms of labor market wages and or hiring practices auto sales prices and or sales rates mortgage rates and or home sales as in dickinson and oaxaca 2009 subjects negotiate in a simulated labor market where worker subjects are given an induced common knowledge productivity distribution

competition cooperation and the neighboring farmer effect abstract in this paper we propose a model that explains how cooperation can emerge spontaneously between firms in a highly competitive market environment the basic idea is that the more competitive is the market the less costly it is for firms to help each other like good neighbors cooperation takes the form of sharing technical know how which speeds up the adoption of new technologies normally developed elsewhere that spur industrial development the model comports with the development history of japan s first example of successful industrial development its cotton spinning industry whose conditions match those of firms in small open economies today

economic and social upgrading in global value chains and industrial clusters why governance matters the burgeoning literature on global value chains gvcs has recast our understanding of how industrial clusters are shaped by their ties to the international economy but within this context the role played by corporate social responsibility csr continues to evolve new research in the past decade allows us to better understand how csr is linked to industrial clusters and gvcs with geographic production and trade patterns in many industries becoming concentrated in the global south lead firms in gvcs have been under growing pressure to link economic and social upgrading in more integrated forms of csr this is leading to a confluence of private governance corporate codes of conduct and monitoring social governance civil society pressure on business from labor organizations and non governmental organizations and public governance government policies to support gains by labor groups and environmental activists this new form of synergistic governance is illustrated with evidence from recent studies of gvcs and industrial clusters as well as advances in theorizing about new patterns of governance in gvcs and clusters

shopping while female who pays higher prices and why i estimate gender price discrimination in the ugandan antimalarial drug market with an audit study to determine whether results are consistent with statistical or taste based discrimination i contrast gender results with results by ethnicity tribe vendors initially offer women prices that are 0 12 3 percent higher however women are 16 percentage points more likely to successfully bargain for a discount resulting in no differential in price paid results are stronger among majority tribe females i find no differences in drug quality both women and minorities report better service quality offer price differentials suggest statistical discrimination there is no differential for prices paid

growth constraints on small scale manufacturing in developing countries a critical review abstract the question raised in this review is whether small scale producers in developing countries can expand or whether they are up against constraints which stunt their growth most of the literature has been optimistic on this score while internal constraints e g lack of managerial ability or external constraints e g discrimination from government are identified expansion is seen as an open ended process in other contributions this view has been severely criticized some allege that the small producers are exploited through various mechanisms others suggest that their road to expansion is blocked as a result of factors such as the pre existence of very advanced technology the control of large firms over product markets or difficulties in access to raw materials in discussing the arguments put forward in the debate an attempt is made to assess their theoretical bases and examine the extent to which they are supported empirically while most studies express explicitly or implicitly a definite view on the growth potential of small producers such judgement is rarely based on a comprehensive examination of the context which determines this potential

how significant are externalities for development if one man starts a new idea it is taken up by others and combined with suggestions of their own and thus it becomes the source of further new ideas and presently subsidiary trades grow up in the neighbourhood supplying it with implements and materials marshall 1920 p 225

experimental research on labor market discrimination understanding whether labor market discrimination explains inferior labor market outcomes for many groups has drawn the attention of labor economists for decades at least since the publication of gary becker s the economics of discrimination in 1957 the decades of research on discrimination in labor markets began with a regression based decomposition approach asking whether raw wage or earnings differences between groups which might constitute prima facie evidence of discrimination were in fact attributable to other productivity related factors subsequent research responding in large part to limitations of the regression based approach moved on to other approaches such as using firm level data to estimate both marginal productivity and wage differentials in recent years however there has been substantial growth in experimental research on labor market discrimination although the earliest experiments were done decades ago some experimental research on labor market discrimination takes place in the lab but far more of it is done in the field which makes this particular area of experimental research unique relative to the explosion of experimental economic research more generally this paper surveys the full range of experimental literature on labor market discrimination places it in the context of the broader research literature on labor market discrimination discusses the experimental literature from many different perspectives empirical theoretical and policy and reviews both what this literature has taught us thus far and what remains to be done

african enterprise clusters and industrialization theory and reality abstract using six case studies from africa this paper examines the theoretical argument that geographic and sectoral clustering enables enterprises to overcome constraints to growth and development findings were both theoretical and practical theoretically the study underscored the strength of the collective efficiency framework but found that certain anomalies could only be explained by other contextual variables grouping the six case studies revealed important differences among them and showed that each group plays its own part in the industrialization process groundwork clusters prepare the way industrializing clusters begin the process of specialization differentiation and technological development and complex industrial clusters produce competitively for wider markets the paper concludes with practical implications for african governments donors and the business community

disagreement in markets with matching and bargaining this paper develops an explanation of why bargainers often terminate negotiations in disagreement in spite of positive expected gains from continued negotiation the key to the analysis is a model which embeds bargaining activity within a market agents are continually faced with the choice between continuing to bargain with an existing partner or searching for a new partner bargainers may then terminate negotiations without an agreement in spite of positive expected gains from continued bargaining because seeking a new bargaining partner promises a higher return

gender bias and credit access we extract an exogenous measure of gender bias from survey responses by descendants of u s immigrants on questions about the role of women in society we then use data on around 6 000 small business firms from 17 countries and find that in high gender bias countries female entrepreneurs are more likely to opt out of the loan application process and to resort to informal finance even though banks do not appear to actively discriminate against them these results are not driven by credit risk differences between female and male owned firms or by any idiosyncrasies in the set of countries in our sample

bargaining as search behavior under mutual uncertainty this paper presents a model of bargaining and strikes that differs from much of the existing literature it is based on the proposal by hicks 4 that a strike is a mistake the bargaining process is therefore conceived in this paper as a bilateral search problem in which both labor envisaged here as the union or union leadership and management seek the best possible position that is acceptable to the opposition a strike results when neither party makes an acceptable proposal before the end of the existing contract most previous models can be classified as either bargaining models that employ nash s assumption of pareto efficient outcomes or strike models that follow the ashenfelter johnson framework 8 1 in the latter framework the firm is viewed as an omniscient profitmaximizer that faces a constraint imposed by the concession schedule of the union this schedule as farber notes may not reflect economically rational choices of wage increases and strikes by workers 2 262 thus while the ashenfelter johnson model may serve as a reduced form representation of bargaining outcomes it fails to provide a price theoretic model of the structure of the bargaining process hayes attempts to reconcile the ashenfelterjohnson model with price theoretic behavior by viewing strikes as an optimal contracting process when labor lacks information possessed by the firm 3 hayes however retains the notion of profit maximization subject to a concession curve by assuming that the union presents ex ante a menu of wage strike combinations to the firm the basic structure of the bargaining process that both parties make and respond to offers is therefore ignored as in kaufman 5 this model stresses the bilateral nature of bargaining unlike kaufman emphasis is placed on the structure and object of the search process it is assumed that both parties formulate reservation positions wages above or below which continued conflict is preferred bargaining represents the attempt by each side to find or influence the reservation position of the opposition in the next section the formulation and revision of reservation positions is explored these positions need not move in a specific direction for either party unless assumptions are made regarding the values of specific variables the smoothly declining concession schedule

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

firm level knowledge accumulation and regional dynamics two bodies of literature have contributed significantly to our insight into the forces driving competitiveness and economic growth regional agglomeration studies emphasise the favourable impact of geographical proximity on regional economic performance particularly through knowledge spillovers however the firms that constitute those agglomerations largely remain black boxes in contrast studies dealing with technological learning explain economic performance at firm level without systematically taking account of the effects of geographical proximity the aim of the paper is to propose a possible way to bridge this gap this contributes to our understanding of the determinants of economic growth in industrial clusters an empirical illustration of a capital goods cluster is elaborated

what ever happened to poverty alleviation abstract the failure of many programs directed toward alleviating poverty is better understood than the successes this paper identifies the traits that characterize several better performing programs funded by the ford foundation traits that are not commonly found in such programs all focused narrowly on a particular trade or activity in the beginning used credit as an entry point started by brokering loans rather than lending directly and had leadership linked to powerful institutions participants were already engaged in the economic activities supported by the programs marketing channels existed and powerful consumer groups were often in favor of production by beneficiary groups though these findings seem obvious few programs funded by donors display these characteristics suggesting that donors choose programs and organizations more carefully and not limit their funding to the nongovernmental sector

small firms and their helpers lessons on demand abstract small enterprise se programs are currently the rage because of their potential to create employment they are typically supply driven providing standardized training technical assistance credit but most cases of se based growth have involved demand driven support provided by large customers firms traders government agencies state enterprises this article argues that such inherently customized support constitutes a better way to deliver services to ses and is more likely to stimulate sustained se growth with respect to se favoring procurement by government in particular we show that this can be done without running up against the problems of similar attempts in the past and in a way that also reduces the costs of running government we draw for illustration from a successful case of se favoring procurement in the brazilian state of ceara

competitive pressure widens the gender gap in performance evidence from a two stage competition in mathematics in two stage elimination math contests participants from four different age groups compete to pass from stage 1 to stage 2 and later to be among the winners although female participants have higher maths grades at school the gender gap reverses in the two stages of the contests more importantly following the same individual participant across different stages we find that the gender gap in performance increases from stage 1 to stage 2 the increase in female underperformance is attributed to higher competitive pressure and alternative explanations based on selection discrimination and differences in reaction to increasing difficulty are ruled out

acting wife marriage market incentives and labor market investments do single women avoid career enhancing actions because these actions signal undesirable traits like ambition to the marriage market while married and unmarried female mba students perform similarly when their performance is unobserved by classmates on exams and problem sets unmarried women have lower participation grades in a field experiment single female students reported lower desired salaries and willingness to travel and work long hours on a real stakes placement questionnaire when they expected their classmates to see their preferences other groups responses were unaffected by peer observability a second experiment indicates the effects are driven by observability by single male peers

from ascribed to earned trust in exporting clusters abstract this paper is concerned with the role of trust in export manufacturing it asks how trust has developed in two industrial clusters which are located in developing countries and export most of their output to north america and europe the main conclusion is that trust was based initially on socio cultural ties between clustered firms and later on conscious investments in inter firm relationships