TY - JOUR A1 - Eckel, Carsten A1 - Iacovone, Leonardo A1 - Javorcik, Beata A1 - Neary, J. Peter T1 - Testing the Core‐competency Model of Multi‐product Exporters JF - Review of International Economics N2 - We review the implications of the “core‐competence” model of multi‐product firms, including the “market‐size puzzle”: for most countries, the world market is much larger than the home market, while the costs of accessing foreign markets are relatively low; hence the model predicts that most domestic firms should export more of their core products than they sell domestically; yet, in practice, we do not observe this. Extending the model to allow for investment in export market penetration resolves the puzzle and Mexican data confirm its predictions: in particular, only the largest firms exhibit the dominance of exports over home sales. Y1 - 2016 U6 - https://doi.org/10.1111/roie.12234 VL - 24 IS - 4 SP - 699 EP - 716 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Pereira-López, Mariana A1 - Schiffbauer, Marc T1 - Competition makes it better: Evidence on when firms use it more effectively N2 - This paper uses a unique firm-level data set for Mexico, with information never used for research before, to assess how use of information technology (IT henceforth) influences firm performance. Further, the paper explores if, in the context of increasing competition from China, this effect is different for firms more strongly affected by competition where incentives for upgrading and innovation may be more intense. In this perspective, the paper analyzes the complementarity between IT and other changes spurred by competition, taking advantage of the exogenous shock generated by Chinese competition. The results indicate that IT use has higher effects over productivity in the case of firms facing higher competition from China, in the domestic market and in the U.S. market. Furthermore, the paper shows how these changes appear to be driven by complementary investments in innovation and organizational changes. Y1 - 2016 UR - https://openknowledge.worldbank.org/handle/10986/24212 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Pereira-López, Mariana A1 - Schiffbauer, Marc T1 - ICT use, competitive pressures and firm performance in Mexico T2 - Policy Research Working Papers N2 - This paper presents a set of stylized facts on the relation between information and communications technology (ICT) use, firm performance, and competition. Taking advantage of a novel firm-level data set on information and communications technology for Mexico, the study finds that firms facing higher competition appear to have more incentives to increase their use of information and communications technology. Accordingly, although there is indeed a positive relation between information and communications technology use and firm performance, this effect is greater for firms that face higher competition pressures, which is consistent with the theoretical predictions of the trade-induced technical change hypothesis. Y1 - 2016 UR - https://openknowledge.worldbank.org/bitstream/handle/10986/24201/ICT0use00compe0erformance0in0Mexico.pdf?sequence=1&isAllowed=y U6 - https://doi.org/10.1596/1813-9450-7629 ET - April 2016 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Pereira-López, Mariana T1 - ICT Adoption and Wage Inequality: Evidence from Mexican Firms T2 - Policy Research working paper N2 - This paper uses a panel of firms from the Mexican Economic Censuses and analyzes at the microeconomic level how labor markets adapt to the adoption of information and communication technologies. The paper studies the effects of the adoption of information and communication technologies over the labor structure of the firm and wages. Thus, it assesses whether increasing the use of information and communication technologies leads to an increasing demand for skilled relative to low-skilled labor, and, thus, analyzes its effects on the wage gap between the two groups. The results of this analysis show that there is indeed an effect of the adoption of information and communication technologies over the demand for higher-skilled workers. However, for the manufacturing and services sectors, instead of increasing the wage gap between skilled and unskilled workers, the wage gap decreases. The results for the manufacturing sector appear to be driven by an increasing sophistication of blue-collar workers due to the organizational adjustments derived from the adoption of information and communication technologies. Y1 - 2018 UR - http://documents.worldbank.org/curated/en/295511515507675734/ICT-adoption-and-wage-inequality-evidence-from-Mexican-firms CY - Washington, D.C. ET - WPS 8298 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Sanchez-Bayardo, Luis Fernando A1 - Gonzalez, Alvaro T1 - Micro-level analysis of Mexican retail markets and their response to changes in market structure and competition policies T2 - Policy Research working paper N2 - This paper develops the following price indicators to measure the relative efficiency (functioning) of markets: (a) price dispersion, (b) price volatility, and (c) price transmission (speed, completeness, and symmetry). The paper uses these indicators to study trends and conditions of the outlet level in retail prices for common commodities sold throughout Mexico. The analysis examines price patterns for each indicator across commodities, regions, and time. The descriptive results indicate that although there is (expected) heterogeneity in the behavior of these indicators across commodities, location variables explain the most variation in the indicators. There are clear and persistent regional- and commodity-specific effects. Thus, the study concludes that Mexico is not one, well-integrated national market. The study tested whether changes in these indicators (increased efficiency) have the expected correlation with measures affecting the functioning of markets. It considered changes in competition and entry of large retail stores in the local retail market. These changes affect market efficiency in the way theory would predict. The results suggest that these indicators are good measures of the relative efficiency (functioning) of markets. The findings also suggest that efforts to monitor markets using these indicators may be useful. For example, for policy makers who are concerned about the distributional effects of liberalizing trade, the indicators may predict where price impacts will be felt the most and by whom. In addition, the indicators provide preliminary information about relative competition levels, which may be helpful in saving the time and effort of the competition authorities and possibly making them more effective. Y1 - 2018 UR - http://documents.worldbank.org/curated/en/110401515422368009/Micro-level-analysis-of-Mexican-retail-markets-and-their-response-to-changes-in-market-structure-and-competition-policies PB - World Bank Group CY - Washington, D. C. ET - WPS 8294 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Coutino, Pablo Gordillo A1 - Pereira-López, Mariana T1 - Robots at the Tropics N2 - In recent years, a growing concern has emerged regarding the potential effects of Artificial Intelligence (AI) and robotization on firms, and even more specifically on workers and the risks for their displacement (Brynjolfsson and McAfee, 2014; Acemoglu and Restrepo, 2017; Graetz and Michaels, 2015, among others). The emphasis of current research studies has been driven by the rapid decrease in the prices of robots, that according to Graetz and Michaels (2015) fell by 2005 to one fifth of its 1990 level adjusting for quality. Consequently, utilization of robots has increased in a wide range of different industries, with the operational stock of robots doubled between 2005 and 2016, reaching 1,828,024 units by the end of 2016 and expected to reach three millions by 2020 (International Federation of Robotics, 2017). The evidence on the impact of robots on the global economy is still very limited and the results of recent studies exhibit great differences. For example, while Frey and Osborne (2017) indicate that the number of jobs that are in risk of automation could account for around 50%, Arntz et al.(2017) argue that this figure is overestimated due to the fact that the heterogeneity of tasks within occupations is not considered, which would reduce this number to around 9%. Y1 - 2018 UR - http://jobsanddevelopmentconference.org/wp-content/uploads/2018/05/liacovone_s1rB.pdf ER - TY - JOUR A1 - Iacovone, Leonardo A1 - Campos, Francisco A1 - Frese, Michael A1 - Goldstein, Markus A1 - Johnson, Hillary C A1 - McKenzie, David A1 - Mensmann, Mona T1 - Is Personal Initiative Training a Substitute or Complement to the Existing Human Capital of Women? Results from a Randomized Trial in Togo JF - AEA Papers and Proceedings N2 - Personal initiative training—a psychology-based mindset training program—delivers lasting improvements for female business owners in Togo. Which types of women benefit most? Theories of dynamic complementarity would suggest training should work better for those with higher pre-existing human capital, but there are also reasons why existing human capital might inhibit training participation or substitute for its effects. We examine the heterogeneity in treatment impact according to different types of human capital. We find little evidence of either complementarities or substitutability, suggesting this new business training approach can work for a wide range of human capital levels. Y1 - 2018 U6 - https://doi.org/10.1257/pandp.20181026 IS - 108 SP - 256 EP - 261 ER - TY - JOUR A1 - Iacovone, Leonardo A1 - Calderón, Gabriela A1 - MacGregor, Cristina T1 - Participating or Not? Characteristics of Female Entrepreneurs Participating in and Completing an Entrepreneurial Training Program JF - AEA Papers and Proceedings N2 - Who are the female entrepreneurs who end up starting and completing entrepreneurial training programs? In this paper, relying on a large set of baseline characteristics collected before the entrepreneurs are selected into an entrepreneurial training program in Mexico, we analyze how the women entrepreneurs who complete the training program differ from those who do not take it up, as well as how those who take it up but drop off before completing differ from those who do not even start. We uncover large differences in performance and non-cognitive skills but no differences in inputs used. Y1 - 2018 U6 - https://doi.org/10.1257/pandp.20181023 IS - 108 SP - 246 EP - 251 ER - TY - RPRT A1 - Iacovone, Leonardo A1 - Campos, Francisco A1 - Frese, Michael A1 - Goldstein, Markus A1 - Johnson, Hillary A1 - McKenzie, David A1 - Mensmann, Mona T1 - Personal Initiative Training Leads to Remarkable Growth of Women-Owned Small Businesses in Togo T2 - Gender innovation lab policy brief N2 - Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries, by teaching accounting, marketing and other basic business skills. However, research shows limited impacts of this traditional business training approach. Through an experiment in Togo, we introduced the personal initiative training program, a new and effective psychology-based entrepreneurship training that outperforms traditional business training. The personal initiative training increased firm profits in Togo by 30 percent relative to a control group, compared to no significant impacts from a traditional business training. Personal initiative training led to more than just a boost in profits for micro entrepreneurs. After the training business owners were more innovative, introduced new products, borrowed more and made larger investments. The personal initiative training was particularly effective for female entrepreneurs, for whom traditional training has often been in effective. Women who received personal initiative training saw their profits increase by 40 percent, compared to 5 percent for traditional business. This study’s findings make a strong case for the role of psychology in better influencing how small business training programs are taught in West Africa and beyond. It shows the importance of developing an entrepreneurial mindset in addition to learning the business practices of successful entrepreneurs. Based on these promising results, the personal initiative training is being implemented in programs in Mozambique, Mauritania, Ethiopia, Jamaica, and Mexico. Y1 - 2018 UR - http://documents.worldbank.org/curated/en/635311516194319062/Personal-initiative-training-leads-to-remarkable-growth-of-women-owned-small-businesses-in-Togo PB - World Bank Group CY - Washington, D. C. ET - 22 ER - TY - JOUR A1 - Iacovone, Leonardo A1 - Campos, Francisco A1 - Frese, Michael A1 - Goldstein, Markus A1 - Johnson, Hillary C A1 - McKenzie, David A1 - Mensmann, Mona T1 - Teaching personal initiative beats traditional training in boosting small business in West Africa JF - Science N2 - Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed. We tested whether a psychology-based personal initiative training approach, which teaches a proactive mindset and focuses on entrepreneurial behaviors, could have more success. A randomized controlled trial in Togo assigned microenterprise owners to a control group (n = 500), a leading business training program (n = 500), or a personal initiative training program (n = 500). Four follow-up surveys tracked outcomes for firms over 2 years and showed that personal initiative training increased firm profits by 30%, compared with a statistically insignificant 11% for traditional training. The training is cost-effective, paying for itself within 1 year. Y1 - 2017 U6 - https://doi.org/10.1126/science.aan5329 VL - 357 IS - 6357 SP - 1287 EP - 1290 ER - TY - JOUR A1 - Iacovone, Leonardo A1 - Calderón, Gabriela A1 - Juarez, Laura T1 - Opportunity versus necessity: understanding the heterogeneity of female micro-entrepreneurs JF - The World Bank Economic Review N2 - Entrepreneurs that voluntarily choose to start a business because they are able to identify a good business opportunity and act on it -- opportunity entrepreneurs -- might be different along various dimensions from those who are forced to become entrepreneurs because of lack of other alternatives -- necessity entrepreneurs. To provide evidence on these differences, this paper exploits a unique data set covering a wide array of characteristics, including cognitive skills, non-cognitive skills and managerial practices, for a large sample of female entrepreneurs in Mexico. Descriptive results show that on average opportunity entrepreneurs have better performance and higher skills than necessity entrepreneurs. A discriminant analysis reveals that discrimination is difficult to achieve based on these observables, which suggests the existence of unobservables driving both the decision to become an opportunity entrepreneur and performance. Thus, an instrumental variables estimation is conducted, using state economic growth in the year the business was set up as an instrument for opportunity, to confirm that opportunity entrepreneurs have higher performance and better management practices. Y1 - 2017 U6 - https://doi.org/10.1093/wber/lhw010 VL - 30 IS - Supplement 1 SP - 86 EP - 96 ER -