infonet-economy

We develop a model of foreign direct investment (FDI) in which financially liquid foreign firms acquire liquidity-constrained target firms. Using a large dataset of emerging-market acquisitions, we find evidence supporting three central predictions of the model: (i) firms in external finance dependent and intangible sectors are more likely to be targets of foreign acquisitions; (ii)…

Recent attempts to connect the current ‘next billion’ to the Internet in places such as sub-Saharan Africa have not met expectations. In places where Internet infrastructure has come online and prices have gone down, the expected consequent increase in uptake was not observed. I develop a framework that incorporates language in the the two-sided markets framework, viewing differences…

The paper reviews the latest technological tools that arguably can contribute to reducing the excessively high costs of remittance transactions in Africa. Indeed, despite huge remittance inflows to and within the continent, Africa is the most expensive destination to send money to. As remittances have become more important than Overseas Development Assistance and Foreign Direct…

Does the government control of school systems facilitate equality in school quality? Whether centralized or localized control produces more equality depends not only on what ‘could’ happen in principle, but also on what does happen in practice. We use the Programme for International Student Assessment (PISA) database to examine the association between school sector and the variance…

Countries with weaker domestic investor protection hold less diversified international portfolios. An equilibrium business cycle model of North-South capital flow with corporate governance frictions between outside investors and corporate insiders explains this phenomenon through two channels. First,weak governance leads to concentrated ownership in the South because international…

In 1994, the Zapatistas took up arms claiming for indigenous people rights in Chiapas, Mexico. After 12 days of civil war, the national government called for dialogue. Nevertheless, since then, it has deployed a "low intensity war" over the self-declared Zapatista Autonomous Communities. At the same time, the Zapatistas started to implement a new set of institutions, which have…

This paper proposes novel identification techniques to examine the trade-offs that microfinance institutions face between increasing their profits and their social impact. It uses a quantile regression approach to examine how these trade-offs evolve as institutions become more commercialized. The identification strategy is based on an instrumental variable approach, and also…

We conduct an impact evaluation of the minimum wage legislation for domestic workers that was introduced in four states in India over the period of 2004-2012. Combining the matching and difference-in-difference estimation strategies we estimate both the short-run and long-run impacts of the legislation on real wages and on employment opportunities. Our results show a positive impact…