“Rule of Law and Female Entrepreneurship”, with Nava Ashraf (LSE) and Edward Glaeser (Harvard University). NBER Working Paper No. 26366
Commerce requires trust, but trust is difficult when one group consistently fears expropriation by another. If men have a comparative advantage at violence and there is little rule-of-law, then unequal bargaining power can lead women to segregate into low-return industries and avoid entrepreneurship altogether. In this paper, we present a model of female entrepreneurship and rule of law that predicts that women will only start businesses when they have both formal legal protection and informal bargaining power. The model's predictions are supported both in cross-national data and with a new census of Zambian manufacturers. In Zambia, female entrepreneurs collaborate less, learn less from fellow entrepreneurs, earn less and segregate into industries with more women, but gender differences are ameliorated when women have access to adjudicating institutions, such as Lusaka's “Market Chiefs” who are empowered to adjudicate small commercial disputes. We experimentally induce variation in local institutional quality in an adapted trust game, and find that this also reduces the gender gap in trust and economic activity.
“Value Dissonance at Work”
Draft available upon request
Shared values can mitigate the adverse consequences of incomplete contracts and reduce coordination costs. Misalignment in values - either actual or perceived by the employees - could make such inefficiencies worse, reducing productivity and creating resistance to change. We provide evidence by means of a survey that measures the perceived and actual value misalignment between employees, their colleagues, and top management in a multinational bank. The data reveals that value dissonance is negatively correlated with individual and team level productivity, as well as with self-reported trust in the bank’s executives and intent to stay. Within countries, we show how bankers’ values compare with the ones listed by World Value Survey respondents and find that employees whose values are further from common citizens perform better. We conclude by showing how aggregate shocks to societal perceptions of banking, such as the 2008 financial crisis, might shape organizational culture.
Research in progress
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