Background Reading for Eric Verhoogen's Lectures at CEPR/BREAD/Verona Summer School
June 30-July 4, 2008
Readings marked with an asterisk (*) are especially important and will be discussed in the lectures. Non-starred readings are
for background, or students who are particularly interested in a topic.
I. Firms and Contracting Problems
* Jean Tirole. 1996. “A Theory of Collective Reputations (With Applications to the Persistence of Corruption and to Firm
Quality).” Review of Economic Studies v. 63 no. 1, pp. 1-22.
* John McMillan and Christopher Woodruff. 1999. “Interfirm Relationships and Informal Credit in Vietnam.” Quarterly
Journal of Economics v. 114 no. 4, pp. 1285-1320.
* Abhijit Banerjee and Esther Duflo. 2000. “Reputation Effects and the Limits of Contracting: A Study of the Indian
Software Industry,” Quarterly Journal of Economics v. 115 no. 3, pp. 989-1017.
Abhijit Banerjee and Esther Duflo. 2004. “Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed
Lending Program.” Unpub. paper, MIT.
Abhijit Banerjee and Kaivan Munshi. 2004. “How Efficiently is Capital Allocated? Evidence from the Knitted Garment
Industry in Tirupur.” Review of Economic Studies v. 71, pp. 19-42.
Avner Greif. 1993. “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders’ Coalition.”
American Economic Review v. 83 no. 3, pp. 525-548.
Dilip Mookherjee. 1999. “Contractual Constraints on Firm Performance in Developing Countries.” Unpub. Paper, Boston
University.
James Tybout. 2000. “Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?” Journal of
Economic Literature v. 38 no. 1, pp. 11-44. Read pp. 15-30.
II. Trade and Heterogeneous Firms
* Marc Melitz. 2003. “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity.”
Econometrica v. 71 no. 6, pp. 1695-1725.
* Eric Verhoogen. 2008. “Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector:” Quarterly
Journal of Economics, v. 123, no. 2, pp. 489-530.
* Maurice Kugler and Eric Verhoogen. 2008. “The Quality-Complementarity Hypothesis: Theory and New Evidence from
Colombia.” Unpub. Paper, Columbia University. (To be posted online by June 20.)
Andrew Bernard and J. Bradford Jensen. 1999. “Exceptional Exporter Performance: Cause, Effect or Both?” Journal of
International Economics v. 47, pp. 1-25.
Clerides, Sofronis, Saul Lach and James Tybout. 1998. “Is Learning by Exporting Important? Micro-Dynamic Evidence
from Colombia, Mexico and Morocco.” Quarterly Journal of Economics v. 113, pp. 903-47.
Robert Feenstra and Gordon Hanson. 1996. “Foreign Investment, Outsourcing and Relative Wages.” In Robert Feenstra and
Gene Grossman eds. Political Economy of Trade Policy: Essays in Honor of Jagdish Bhagwati, Cambridge MA: MIT
Press. Working paper version: NBER Working Paper #5424.
Katayama, H., S. Lu, and J. R. Tybout (2006): "Firm-Level Productivity Studies: Illusions and a Solution," Unpub. paper,
The University of Sydney, Charles River Associates and Pennsylvania State University.
Nina Pavcnik. 2002. “Trade Liberalization, Exit and Productivity Improvements: Evidence from Chilean Plants.” Review of
Economic Studies v. 69, pp. 245-276.
John Sutton. 2000. “The Indian Machine-Tool Industry: A Benchmarking Study.” Unpub Paper, LSE.
John Sutton. 2004. “The Auto-component Supply Chain in China and India: A Benchmarking Study.” Unpub. Paper, LSE.
James Tybout. 2003. “Plant and Firm-Level Evidence on ‘New’ Trade Theories.” In K. Choi and J. Harrigan eds., Handbook
of International Trade. Oxford: Basil-Blackwell.