Analyzing the Spillover Mechanism on the Semiconductor Industry in the Silicon Valley and Route 128

To understand the impact of science and engineering innovations on economic growth requires relating discoveries to products, and identifying the scientists and engineers who are responsible for the knowledge transfer. Studies reliant on geographic proximity alone can show only that economic activity varies positively with the amount of research being done at a university [David (1992), Nelson and Romer (1996), Jaffe (1989,93)]. These "geographically localized knowledge spillovers" have proved unable to explain what it is about research universities that is crucial for their local economic impact (training, the research findings?) and, therefore, are unconvincing both to policy makers and the public. This paper analyses the spillover mechanism identifying its main components by analyzing the effect of university-based star scientists through explicit and implicit ties, and the effect of other neighbor firms, on the performance of semiconductor enterprises measured with patents. Explicit ties are modeled by the full and part-time job mobility of scientists located in universities; and implicit ties, by the presence of positive externalities or spillover effects to the firms of untied scientists at Universities in the same economic area. Specifically, this study examines the Silicon Valley and Route 128 cases in detail identifying the differences and similarities between these two major semiconductor regions in their spillover mechanisms. Previous research on high-technology industries has demonstrated the importance of geographically localized "knowledge spillovers" by building specific links between university scientists and firms and estimating the local effects of different types of links. This research goes an step forward, by not only measuring the effect of University research through the direct ties to firms (Zucker, Darby, Armstrong; 1998); but also measuring the importance of the inside industry R&D spillovers in the growth of the region.

Potential collusion and trust: Evidence from a field experiment in Vietnam

We conduct framed trust games using contract dairy farmers in Vietnam as first movers to assess the impact of potential collusion on trust. Disaggregated analysis suggests that female farmers are more likely to trust overall, but are also more responsive to the addition of a third party and potential collusion. A third party induces them to trust at higher levels, but potential collusion between the trustee and the third party also induces them to trust at lower levels. Our findings corroborate well with existing studies on gender differences in decision making, which suggest that women's social preferences are more context-specific than men's.collusion, field experiment, Gender, trust game,

Randomizing the "Last Mile": A methodological note on using a voucher-based approach to assess the impact of infrastructure projects

This methodological note discusses the potential and limits of using voucher-based experiments to randomly evaluate the micro-level impact of infrastructures on households' well-being. We argue that such methods are policy relevant, statistically robust, and ethically correct. A number of conditions regarding the vouchers' design and level, as well as allocation methods and household sampling, must be taken into account, however. We illustrate the discussion with an ongoing voucher-based impact evaluation of a rural electrification program in Ethiopia.Impact, infrastructure, vouchers,

Access to dynamic markets for small commercial farmers: the case of potato production in the Peruvian Andes

"The purpose of this study is twofold. On one hand, the objective is to assess the impact of new and more complex contracting schemes, as opposed to traditional marketing channels, on small farmers' welfare. On the other hand, the study explores which may be the critical factors that determine the small farmers' participation in these institutional arrangements. In this context, two critical factors are stressed. The first one has to do with access to credit and the second one is the size of the agricultural plot. In order to examine the decision of farmers to access the dynamic markets, the paper follows the study of Lapar et al (2003). The paper also follows impact evaluation techniques to identify the differences in the performance of farmers with access to dynamic markets and those without access. As it can be seen, in all cases, the difference between farmers with access and those without access is positive. This implies that having access to dynamic markets has positive impacts on the welfare of farmers. The results show that the farmers linked to the dynamic markets gain two cents of a dollar more per kilogram of potato. ...Our simulations showed that increase of their plot size to a minimum of five hectares (optimal size according to the industry) increases their sales to dynamic markets in 16%. However, the impact of new and more complex contracting schemes, as opposed to traditional marketing channels, could reduce significantly the access gap to dynamic markets by reducing transaction costs, increasing productivity, and increasing scale production through coordination of smallholders." Authors' AbstractPotato production, Market access, Small farmers, Contract farming, Access to credit, Dynamic markets, Impact evaluation, income growth, Transaction costs,

Adverse Geography and Differences in Welfare in Peru

regional economics, spatial distribution, welfare, poverty, Peru

Exploring the Price Spike

Agribusiness, I30, O12, Q18,

Physical and virtual global food reserves to protect the poor and prevent market failure:

"The current food crisis has several causes—rising demand for food and feed, biofuels, high oil prices, climate change, stagnant agricultural productivity growth—but there is increasing evidence that the crisis is being made worse by the malfunctioning of world grain markets. Given the thinness of major markets for cereals, the restrictions on grain exports imposed by dozens of countries have resulted in additional price increases. A number of countries have adopted retail price controls, creating perverse incentives for producers. Speculative bubbles have built up, and the gap between cash and futures prices has risen, stimulating overregulation in some countries and causing some commodity exchanges in Africa and Asia to halt grain futures trading. Some food aid donors have defaulted on food aid contracts. The World Food Programme (WFP) has had difficulty getting quick access to grain for its humanitarian operations. Developing countries are urgently rebuilding their national stocks and re-examining the “merits” of self-sufficiency policies for food security despite high costs. These reactions began as consequences, not causes, of the price crisis, but they exacerbate the crisis and increase the risks posed by high prices. By creating a feedback loop with high food prices, they further increase price levels and volatility, with adverse consequences for the poor and for long-term incentives for agricultural production. Because they impede the free flow of food to where it is most needed and undermine the flow of price signals to farmers, these market failures impose enormous efficiency losses on the global food system, hitting the poorest countries and people hardest." from Author's textFood prices, Food policy, Markets,

Information and communication technologies for the poor:

This brief is based on Information and Communication Technologies for Development and Poverty Reduction: The Potential of Telecommunications, ed. Maximo Torero and Joachim von Braun (Johns Hopkins University Press and IFPRI, 2006) "The variety of views about ICTs reveals that their role in development is unclear, especially without convincing evidence of their impact—and little research has been conducted on the direct and indirect links between ICTs and poverty reduction. A new book, Information and Communication Technologies for Development and Poverty Reduction: The Potential of Telecommunications, published by the Johns Hopkins University Press for IFPRI, addresses several pressing questions surrounding ICTs. How do ICTs affect economic development in low-income countries? How do they affect poor people in these countries and in rural areas in particular? What policies and programs facilitate their potential to enhance development and the inclusion of poor constituents? The book presents researchers' findings related to five critical questions. (1) What link exists between ICT growth and economic growth? (2) Do weak institutions block effective use of ICTs? (3) Have ICTs been adapted to low-income countries, and have they had an impact on SMEs? (4) Does household access to ICTs remain constrained? (5) Can ICTs play a role in providing pro-poor public goods and services?" from TextICT, Information technology, Poverty reduction, Development, Telecommunications, Economic development Developing countries, rural areas, Institutions,

Access to Dynamic Markets for Small Commercial Farmers: The Case of Potato Production in the Peruvian Andes

The study has evaluated which are the most relevant factors that determine that a small farmer switch marketing channels in order to enter into a "dynamic" market; that is, into a market signed by more complex contractual relationships that can absorb increasing amounts of its output. The results show that there are a number of producers that currently are not selling to those markets but they may well do so. Restrictions associated to the degree of organization of the producers, their perception of risk and credit market restrictions may prevent these farmers to gain access to the additional benefits that these new market opportunities have to offer.Market participation, Contractual arrangements, Potato Farmers, Peru, Crop Production/Industries, Marketing, Q13, Q16,

On The Preferences of Principals and Agents

One of the reasons why market economies are able to thrive is that they exploit the willingness of entrepreneurs to take risks that laborers might prefer to avoid. Markets work because they remunerate good judgement and punish mistakes. Indeed, modern contract theory is based on the assumption that principals are less risk averse than agents. We investigate if the risk preferences of entrepreneurs are different from those of laborers by implementing experiments with a random sample of the population in a fast-growing, small-manufacturing, economic cluster. As assumed by theory, we find that entrepreneurs are more likely to take risks than hired managers. These results are robust to the inclusion of a series of controls. This lends support to the idea that risk preferences are an important determinant of selection into occupations. Finally, our lotteries are good predictors of financial decisions, thus giving support to the external validity of our risk measures and experimental methods.