Informations et ressources scientifiques
sur le développement des zones arides et semi-arides

Accueil du site → Doctorat → États-Unis → 2021 → Three Essays in Development Economics on Rural Firms and Markets

University of California Davis (2021)

Three Essays in Development Economics on Rural Firms and Markets

Rudder, Jessica

Titre : Three Essays in Development Economics on Rural Firms and Markets

Auteur : Rudder, Jessica

Université de soutenance : University of California Davis

Grade : Doctor Philosophy (PhD) in Agricultural and Resources Economics 2021

Résumé partiel
Drawing on theory from development economics and industrial organization, I study the economics of rural firms and markets to understand how different types of shocks affect firm operations. I examine three types of shocks : technology, weather, and prices. I use a combination of randomized experimental variation and quasi-experimental variation to identify the effect of each type of shock on small firm outcomes. The primary outcomes are relational contracting with suppliers and customers, firm performance (sales, profits, hiring of workers), number of competitors, and changes to input and output prices.

In the first essay, I evaluate how a technology shock designed to lower search costs affects how firms interact with their suppliers and customers. For small firms, search frictions interfere with learning about new suppliers in their upstream market, and raise the cost of meeting new customers in their downstream market. Using a randomized experiment of 507 small firms, I study the impact of a digital phonebook that lowers the cost of accessing new business and customer contacts. Participating firms are split into a control and treatment group with two variations : 1) a phonebook listing that is visible to upstream suppliers in urban areas, and 2) a phonebook listing that is visible to downstream customers in rural areas. I find that treated firms increase relational contracting with their suppliers and decrease it with their customers. Yet, there is no strong evidence that the number of new customers or suppliers increases. This pattern suggests that being listed in the phonebook caused firms to update their valuation of relational contracts and respond by negotiating better terms with suppliers and customers.

In the second essay, I study how a weather shock that lowers agricultural production affects rural firms whose customer base experiences crop losses. In the absence of insurance and credit markets, the effect of adverse weather shocks on rural firms is ambiguous because drought shifts both demand and supply curves. I use spatial and temporal variation in the 2016-2017 drought in Kenya to characterize the direct and indirect effects of drought-induced food insecurity on local firm outcomes. Firms in areas directly affected by drought have lower sales, profits, and hire fewer workers than firms in non-drought areas. Firm entry also increases in drought areas compared to non-drought areas, consistent with prior evidence that farming households form new businesses as a coping strategy following shocks. Subsector analysis reveals substantial heterogeneity. Service firms fare better than retail firms. But examining retail sub-sectors shows that firms selling higher-value food products (meat/fish and fruits/vegetables) experience greater declines than staple grain sellers in markets directly affected by drought, while firms selling high-value foods increase sales in non-drought areas. This is consistent with consumers in drought regions decreasing consumption of non-necessities.

Présentation et version intégrale

Page publiée le 25 janvier 2023