Global Firms and Market
A.Y. 2022/2023
Learning objectives
The course objectives are:
· Help students understand the main features of firms in developing countries and the major determinants of their productivity.
· Guide students in drawing policy implications from the findings of academic research on firms in developing countries.
· Foster the development among students of the ability to critically evaluate the empirical evidence, specifically in terms of causal inference, drawing on a basic knowledge of impact evaluation methodologies.
· Offer opportunities to practice critical thinking and policy evaluation skills through the analysis of empirical data, group discussion and writing of critical reviews of the literature and of independent research proposals.
· Help students understand the main features of firms in developing countries and the major determinants of their productivity.
· Guide students in drawing policy implications from the findings of academic research on firms in developing countries.
· Foster the development among students of the ability to critically evaluate the empirical evidence, specifically in terms of causal inference, drawing on a basic knowledge of impact evaluation methodologies.
· Offer opportunities to practice critical thinking and policy evaluation skills through the analysis of empirical data, group discussion and writing of critical reviews of the literature and of independent research proposals.
Expected learning outcomes
Students will acquire a set of skills that will be useful for their future, both within and outside academia:
· Knowledge on the key institutional, market, infrastructural and social constraints faced by firms in developing countries, which will prove useful in understanding the current debate on development policies, but also on structural reforms in developed countries.
· The focus of the course on methodological aspects will help students acquire the ability to critically evaluate claims of causality and assess the impact of policy interventions.
· The range of assignments for the course will improve students' ability to read critically an academic article, will give them the opportunity to practice their data analysis and writing skills, and will inform their future thesis work by encouraging to think in depth about a topic of their choosing within the course curriculum.
· Knowledge on the key institutional, market, infrastructural and social constraints faced by firms in developing countries, which will prove useful in understanding the current debate on development policies, but also on structural reforms in developed countries.
· The focus of the course on methodological aspects will help students acquire the ability to critically evaluate claims of causality and assess the impact of policy interventions.
· The range of assignments for the course will improve students' ability to read critically an academic article, will give them the opportunity to practice their data analysis and writing skills, and will inform their future thesis work by encouraging to think in depth about a topic of their choosing within the course curriculum.
Lesson period: First trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Responsible
Lesson period
First trimester
Course syllabus
Students will find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
The course will cover the following topics:
Topic 1 - Intro, Development Accounting and Growth Models: We review key results of the development accounting literature and classic growth models. We examine barriers to growth in developing countries.
Topic 2 - Institutions: We discuss the role of institutions in determining investment and productivity. In particular, we will focus on property rights and contract enforcement; corruption and distortions; taxation and entry regulations. When looking at entry barriers and taxes, we will discuss the roots of informality.
Topic 3 - Entrepreneurship and Development: We discuss the basic features of firms in developing countries. We review the evidence on return to capital, ask how market imperfections may limit enterprise growth, and review the micro-level evidence on constraints for firm growth in developing countries.
Topic 4 - Credit Markets in Developing Countries: Financial markets play a crucial role in economic development by allowing those who have talent or skills but limited money to undertake investments. We review theories on how financial market frictions may affect choices and productivity of individuals and firms. We look at evidence on the importance of financial market frictions in developing countries.
Topic 5 - Microfinance: How does the standard microfinance model work, and how did microfinance make lending to the poor a viable and sustainable policy? What is the impact of microfinance on business development and poverty alleviation? How can we improve the access to financial services and increase savings among poor households? What is the role of complementary skills, social networks, cultural and psychological factors?
Topic 6 - Insurance: Risk plays a crucial role in the lives of the poor. We'll review evidence on the determinants of and constraints to insurance take up and the impact of insurance on firms.
Topic 7 - Infrastructure: Access to infrastructure, such as transport, energy and more recently internet, is an important determinant of firm productivity. Studies of developing country settings allow to evaluate and quantify the impact of infrastructure on firms.
Topic 8 - Management: What are the drivers of forms productivity in developing countries? What is the role of management? We review the recent literature on management practices and productivity. We then discuss the role of complementarity inputs, institutional quality and relational contracts in determining firms' productivity.
Topic 9 - Intra-household norms and behavioral issues: Given that much of production in developing countries occurs within the household, it is important to understand how intra-household decisions are made in order to explain firm productivity. Similarly, behavioral issues are particularly binding for the poor, and are another key determinant of entrepreneurs' behavior.
Topic 10 - Empirical methods: The impact evaluation problem and its solutions. Informal overview of empirical methods and their application to development economics papers on firms. This is a cross-cutting topic.
The program may undergo changes depending on students' interests and requests for specific topics relevant to development economics, such as conflict, environmental conservation, Covid-19, etc.
The course will cover the following topics:
Topic 1 - Intro, Development Accounting and Growth Models: We review key results of the development accounting literature and classic growth models. We examine barriers to growth in developing countries.
Topic 2 - Institutions: We discuss the role of institutions in determining investment and productivity. In particular, we will focus on property rights and contract enforcement; corruption and distortions; taxation and entry regulations. When looking at entry barriers and taxes, we will discuss the roots of informality.
Topic 3 - Entrepreneurship and Development: We discuss the basic features of firms in developing countries. We review the evidence on return to capital, ask how market imperfections may limit enterprise growth, and review the micro-level evidence on constraints for firm growth in developing countries.
Topic 4 - Credit Markets in Developing Countries: Financial markets play a crucial role in economic development by allowing those who have talent or skills but limited money to undertake investments. We review theories on how financial market frictions may affect choices and productivity of individuals and firms. We look at evidence on the importance of financial market frictions in developing countries.
Topic 5 - Microfinance: How does the standard microfinance model work, and how did microfinance make lending to the poor a viable and sustainable policy? What is the impact of microfinance on business development and poverty alleviation? How can we improve the access to financial services and increase savings among poor households? What is the role of complementary skills, social networks, cultural and psychological factors?
Topic 6 - Insurance: Risk plays a crucial role in the lives of the poor. We'll review evidence on the determinants of and constraints to insurance take up and the impact of insurance on firms.
Topic 7 - Infrastructure: Access to infrastructure, such as transport, energy and more recently internet, is an important determinant of firm productivity. Studies of developing country settings allow to evaluate and quantify the impact of infrastructure on firms.
Topic 8 - Management: What are the drivers of forms productivity in developing countries? What is the role of management? We review the recent literature on management practices and productivity. We then discuss the role of complementarity inputs, institutional quality and relational contracts in determining firms' productivity.
Topic 9 - Intra-household norms and behavioral issues: Given that much of production in developing countries occurs within the household, it is important to understand how intra-household decisions are made in order to explain firm productivity. Similarly, behavioral issues are particularly binding for the poor, and are another key determinant of entrepreneurs' behavior.
Topic 10 - Empirical methods: The impact evaluation problem and its solutions. Informal overview of empirical methods and their application to development economics papers on firms. This is a cross-cutting topic.
The program may undergo changes depending on students' interests and requests for specific topics relevant to development economics, such as conflict, environmental conservation, Covid-19, etc.
Prerequisites for admission
Propaedeutic exams: Optimization, Research Methods, Advanced Microeconomics.
Teaching methods
Live lectures: lectures will consist of live presentations over slides, with the inclusion of pair or small group discussions; and online polls and quizzes. The lectures will take place in the classroom. Students will be informed of the time of the lectures through announcements on Ariel.
Recorded videos: it is possible that specific topics will be covered by short recorded videos.
Classes: classes for the course will be held by Federico Segato. The initial classes will review the basic usage of Stata. The remaining classes will be devoted to the critical discussion and replication of results from papers covered during the lectures. Finally, one class will be devoted to writing tips. The skills acquired and practiced during the classes - data analysis, critical review of academic paper and writing skills - will be useful for the course assignment: the Stata task will consist in conducting basic replication analysis using Stata, and the critical writing task will ask students to critically review a paper.
Recorded videos: it is possible that specific topics will be covered by short recorded videos.
Classes: classes for the course will be held by Federico Segato. The initial classes will review the basic usage of Stata. The remaining classes will be devoted to the critical discussion and replication of results from papers covered during the lectures. Finally, one class will be devoted to writing tips. The skills acquired and practiced during the classes - data analysis, critical review of academic paper and writing skills - will be useful for the course assignment: the Stata task will consist in conducting basic replication analysis using Stata, and the critical writing task will ask students to critically review a paper.
Teaching Resources
The main material for the course are the lecture slides, which will be regularly uploaded on the course Ariel website.
Students will also find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
In general, there is no required textbook for the course. The main study material are slides and academic papers. Three useful books are:
· Ray, D. Development Economics. Princeton: Princeton University Press, 2008.
· Banerjee, A. V. and E. Duflo. Poor Economics. New York: Public Affairs, 2011.
· Mullainathan, S. and E. Shafir. Scarcity. Henry Holt and Company, 2013.
· Banerjee, A. V. and E. Duflo. Good Economics for Hard Times. New York: Public Affairs, 2019.
In particular, the two books by Banerjee and Duflo are warmly suggested reads for any student to read, beyond their use within the course.
Selected chapters of these books will be assigned as recommended reading for the relevant week's topic.
In addition, articles from academic journals will be assigned as required or recommended reading and reviewed in the lectures and classes.
Students are strongly invited to review the material from the Advanced Computer Skills course before the start of the lectures. The material is available on the Ariel site of the course at http://arossoACS.ariel.ctu.unimi.it.
Students will also find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
In general, there is no required textbook for the course. The main study material are slides and academic papers. Three useful books are:
· Ray, D. Development Economics. Princeton: Princeton University Press, 2008.
· Banerjee, A. V. and E. Duflo. Poor Economics. New York: Public Affairs, 2011.
· Mullainathan, S. and E. Shafir. Scarcity. Henry Holt and Company, 2013.
· Banerjee, A. V. and E. Duflo. Good Economics for Hard Times. New York: Public Affairs, 2019.
In particular, the two books by Banerjee and Duflo are warmly suggested reads for any student to read, beyond their use within the course.
Selected chapters of these books will be assigned as recommended reading for the relevant week's topic.
In addition, articles from academic journals will be assigned as required or recommended reading and reviewed in the lectures and classes.
Students are strongly invited to review the material from the Advanced Computer Skills course before the start of the lectures. The material is available on the Ariel site of the course at http://arossoACS.ariel.ctu.unimi.it.
Assessment methods and Criteria
Evaluation criteria
A combination of assignment methods is planned, in order to evaluate and reward:
· Knowledge of the learning material
· Participation and engagement (for attending students only)
· The ability to assess the empirical evidence critically and to draw policy implications from it
· Data analysis skills
· The ability to ask new questions starting from the learning material
Attending students
· Ongoing evaluation (50% of the final grade): part of the evaluation will involve quizzes on the live lectures, reading material or other teaching material, to be administered throughout the duration of the course. In particular, there will be 4 quizzes, and this component of the grade will be made by the sum of the 3 best scores. In other words, the worst quiz grade will not count for the final grade.
· Assignment (35% of final grade): there will be one group assignment, composed as follows
o Stata task: students will be required to replicate a piece of analysis (e.g., a regression table or a graph) from an academic paper discussed during the lectures and the Stata classes.
o Critical writing: students will be asked to comment critically an academic paper; and to identify potential directions for further research.
o The groups for this assignment will be formed by the instructor.
· Participation (7.5% of the final grade): participation will be monitored during the live lectures, in terms of participation to the group discussions and pertinent interventions (7.5%).
· Attendance (7.5% of the final grade): 70% attendance to the lectures and classes is required. Answers to the online polls will testify attendance to the lectures.
Non-attending students
Oral exam: the oral exam will include short-answer questions, similar to the ones featured in the quizzes for attending students, and more open, discussion-type questions. Some of the questions will cover the topics of the Stata classes, thus they will concern commands, data management and analysis using Stata.
Written exams may be adopted upon request of the totality of students enrolled to an exam session, at discretion of the instructor.
Final grade of the Global Firms and Markets (GFM) course
The GFM course is composed of two parts (taught by Professor Barba and Professor d'Adda). Each part weighs equally towards the final grade. In particular:
· In order to pass the overall course, students need to have passed both parts of the course
· For students who passed both parts of the course, the final grade is the average of the grades they got in each part
· Students do not need to take the two parts of the exam simultaneously (i.e., within the same exam session), but can take each part in a different session, if they so wish. Both parts of the exam must be passed by the November 2022 exam session: after that, students will have to refer to the following academic year syllabus and evaluation method.
A combination of assignment methods is planned, in order to evaluate and reward:
· Knowledge of the learning material
· Participation and engagement (for attending students only)
· The ability to assess the empirical evidence critically and to draw policy implications from it
· Data analysis skills
· The ability to ask new questions starting from the learning material
Attending students
· Ongoing evaluation (50% of the final grade): part of the evaluation will involve quizzes on the live lectures, reading material or other teaching material, to be administered throughout the duration of the course. In particular, there will be 4 quizzes, and this component of the grade will be made by the sum of the 3 best scores. In other words, the worst quiz grade will not count for the final grade.
· Assignment (35% of final grade): there will be one group assignment, composed as follows
o Stata task: students will be required to replicate a piece of analysis (e.g., a regression table or a graph) from an academic paper discussed during the lectures and the Stata classes.
o Critical writing: students will be asked to comment critically an academic paper; and to identify potential directions for further research.
o The groups for this assignment will be formed by the instructor.
· Participation (7.5% of the final grade): participation will be monitored during the live lectures, in terms of participation to the group discussions and pertinent interventions (7.5%).
· Attendance (7.5% of the final grade): 70% attendance to the lectures and classes is required. Answers to the online polls will testify attendance to the lectures.
Non-attending students
Oral exam: the oral exam will include short-answer questions, similar to the ones featured in the quizzes for attending students, and more open, discussion-type questions. Some of the questions will cover the topics of the Stata classes, thus they will concern commands, data management and analysis using Stata.
Written exams may be adopted upon request of the totality of students enrolled to an exam session, at discretion of the instructor.
Final grade of the Global Firms and Markets (GFM) course
The GFM course is composed of two parts (taught by Professor Barba and Professor d'Adda). Each part weighs equally towards the final grade. In particular:
· In order to pass the overall course, students need to have passed both parts of the course
· For students who passed both parts of the course, the final grade is the average of the grades they got in each part
· Students do not need to take the two parts of the exam simultaneously (i.e., within the same exam session), but can take each part in a different session, if they so wish. Both parts of the exam must be passed by the November 2022 exam session: after that, students will have to refer to the following academic year syllabus and evaluation method.
SECS-P/08 - MANAGEMENT - University credits: 6
Lessons: 40 hours
Professors:
Barba Navaretti Giorgio, D'Adda Giovanna
Professor(s)
Reception:
Tuesday 9:30-12:30. Preferably, students are requested to set an appointment by email. Otherwise, they can send an email or a message on Teams during the office hours to check availability.
Room 219, Via Livorno