My research centers on Applied Microeconomics. Primarily, I work in the fields of Development and Organizational Economics. My research focuses on the behavior of small firms in developing countries, using both theoretical insights from contract and organizational theory along with econometric methods. It can be classified into three areas of interest: (1) applications of organizational economics in developing economies, and barriers to small firms’ growth such as (2) lack of access to credit and (3) lack of access to markets.

Research Statement (PDF version)

Job Market Paper

“Coordination and Gains from Relational Contracts: Evidence from the Peruvian Anchovy Fishery” (Link)

Long-term relationships and relational contracts are important means to improve upon market outcomes when formal contracts are not available. However, measuring their impact is challenging and evidence is scarce. This paper empirically examines the efficiency gains coming from the use of informal agreements. I use a unique dataset in which I observe a compelling set of production and operational choices that precede each transaction in the Peruvian anchovy fishery. First, I provide evidence that in a context of highly variable supply conditions, commercial partners draw upon relational contracts to effectively exchange supply and demand assurance. Next, I show that the use of these informal agreements imposes positive net externalities on those agents operating without them. This paper is the first to document spillover effects of long-term relationships. Results suggest that the fraction of transactions mediated by relational contracts is privately but not socially efficient. I quantify gains in revenues of $208,000 per year as a result of increasing the share of sellers with relationships in one standard deviation.

Working Papers

“Does women’s banking matter for women? Evidence from urban India” (Link)
(with Erica Field and Rohini Pande) . IGC Working Paper

In many developing countries, women are prevented to take full advantage of the benefits of living in an urban area. In India, while one of every two men participates in the labor market, it is the case just for one of every six women. In this context, it is thought that access to microfinance is key to bridge the gap and to introduce women into the labor force. This is the first project to rigorously evaluate the long term impact of increasing access to microcredit on female labor force participation. In this study, we exploit quasi-experimental variation in women access to microfinance generated by a unique expansion strategy adopted by the oldest Women Bank in the world. From 1999 onward, the “ Shri Mahil Self Employment Women Association Sahkari (SEWA) Bank” massively introduced the use of loan collection officers which dramatically reduced the transaction cost of getting a loan in Ahmedabad, urban India. Our findings support the hypothesis that access to microfinance integrate women into the labor force in the long run. Even more, our results suggest that this effect is driven by a greater participation of women in household business activity. It does not seem to be associated to a sustainable change in female empowerment. This increase in female labor force participation is accompanied by an increment in the share of household income produced by women. However, this effect fades out in time. Finally, our results also suggests that as a consequence of increasing participation in the labor force, a greater access to micro-finance reduce fertility in the long run.

“Expansion of formal financial services and inter-household transfers: Side effects of the entrance of Azteca Bank in Mexico” (Link). Bank of Mexico Working Paper

The expansion of formal financial services is an ongoing phenomenon in low income countries. Nowadays, it is common that retail companies decide to open a commercial bank with branches within each of its multiple stores. The retail-store banks are characterized by its vast geographical expansion and because their products target low-income households. In this study, I take advantage of the unique characteristics in the opening strategy of the first retail-store bank in Mexico (Azteca Bank) and the comprehensive panel data in the Mexican Family Life Survey (MxFLS) to estimate the impact of formal financial services expansion on the shape and use of the local safety net. In order to overcome potential doubts on the common time trend assumption among municipalities in the treatment and control group, this project carefully implements a Matching Difference-in-Difference empirical strategy. The main results are in order: Expansion of formal financial services weakens the local safety net for households with low per capita expenditure (PCE). Concretely, as a consequence of Azteca Bank entrance, the probability of receiving/giving transfers has decreased by at least 22% for these households. Even more, I show that, as a consequence of the Azteca Bank entry, households in the low PCE group rely less on their local safety net to deal with idiosyncratic shocks.

Work in Progress

“Exploring Barriers to SME International Market Access through E-commerce” (with Pamela Medina and Daniel (Yi) Xu)

“Digital trade credit adoption and its impact on the business growth of micro and small merchants in Peru” (with Erica Field)

Other Research Projects

“The impact of negative shocks: Heterogeneous ability to smooth consumption among Peruvian households” (with Verónica Montalva) CIES/ACDI-IDR Working Paper. (Link to version in Spanish)