Marcos Vera-Hernández
Emla Fitzsimons
José V. Rodríguez Mora
Tomasa Rodrigo
Álvaro Ortiz
Stephen Hansen
Vasco Carvalho
Gergely Buda
Gabriel Zucman
Anders Jensen
Matthew Fisher-Post
José-Alberto Guerra
Myra Mohnen
Christopher Timmins
Ignacio Sarmiento-Barbieri
Peter Christensen
Linda Wu
Gaurav Khatri
Julián Costas-Fernández
Eleonora Patacchini
Jorgen Harris
Marco Battaglini
Ricardo Fernholz
Alberto Bisin
Jess Benhabib
Cian Ruane
Pete Klenow
Mark Bils
Peter Hull
Will Dobbie
David Arnold
Eric Zwick
Owen Zidar
Matt Smith
Ansgar Walther
Tarun Ramadorai
Paul Goldsmith-Pinkham
Andreas Fuster
Ellora Derenoncourt
Golvine de Rochambeau
Vinayak Iyer
Jonas Hjort
Elena Simintzi
Paige Ouimet
Holger Mueller
Pablo Garriga
Gabriel Ulyssea
Costas Meghir
Pinelopi Koujianou Goldberg
Rafael Dix-Carneiro
Alessandro Toppeta
Áureo de Paula
Orazio Attanasio
Seth Zimmerman
Joseph Price
Valerie Michelman
Camille Semelet
Anne Brockmeyer
Pierre Bachas
Santiago Pérez
Elisa Jácome
Leah Boustan
Ran Abramitzky
Jesse Rothstein
Jeffrey T. Denning
Sandra Black
Wei Cui
Mathieu Leduc
Philippe Jehiel
Shivam Gujral
Suraj Sridhar
Attila Lindner
Arindrajit Dube
Pascual Restrepo
Łukasz Rachel
Benjamin Moll
Kirill Borusyak
Michael McMahon
Frederic Malherbe
Gabor Pinter
Angus Foulis
Saleem Bahaj
Stone Centre
Phil Thornton
James Baggaley
Xavier Jaravel
Richard Blundell
Parama Chaudhury
Dani Rodrik
Alan Olivi
Vincent Sterk
Davide Melcangi
Enrico Miglino
Fabian Kosse
Daniel Wilhelm
Azeem M. Shaikh
Joseph Romano
Magne Mogstad
Suresh Naidu
Ilyana Kuziemko

Informational barriers to market access: experimental evidence from Liberian firms

What is this research about and why did you do it?

A huge challenge for research and policy efforts to accelerate economic development is that firms in poor countries grow surprisingly slowly, making job creation in the “Global South” difficult to achieve. We don’t know why: the existing literature has mostly focused on production constraints—the cost firms incur to produce goods and services—but these appear to have modest explanatory power. Recent evidence suggests that many firms in poor countries stagnate because they cannot access growth-conducive markets. A natural way forward is then to ask why some firms are better able to access desirable markets than others.

How did you answer this question?

Existing research considers infrastructure, tariffs, and other traditional market access barriers whose impact in large part depends on a firm's location and “type” (such as e.g. its sector or size). However, ability to market products appears to vary substantially even across quite similar firms that are located near each other. This suggests that overlooked categories of access barriers may “bind” for some firms.

We hypothesized that informational barriers distort market access. To investigate we gave a random subset of medium-sized firms in Liberia vouchers for a week-long program that exclusively teaches "sellership": how to sell to corporations, governments, and other large buyers that acquire inputs through formal contracts.

What did you find?

Firms that participate in the training win three times as many formal contracts a year later. The impact is heterogeneous: informational sales barriers bind for about a quarter of firms. Three years post-training, these firms continue to win desirable contracts, are more likely to operate, and employ more workers.

What implications does this have for the research on wealth concentration or economic inequality?

We asked if large buyers' complex, unfamiliar input procurement procedures and the pure marketing ability they necessitate on suppliers' side of the market exclude firms in poor countries from growth-conducive value chains. In doing so we build on research documenting how complex application procedures and knowledge barriers constrain qualified-but-underrepresented individuals’ educational, labor market, and social assistance choices. Our findings add to growing evidence that informational barriers can be surprisingly costly to overcome also for disadvantaged firms.

What are the next steps in your agenda?

We hope to investigate how firms’ and individuals’ de facto ability to acquire production inputs and sell output is influenced by overlooked economic, political, and social factors along the various stages of the production process and to inform policy responses.


This paper can be cited as follows: Hjort, J., Iyer, V., and de Rochambeau, G. (2020) "Informational barriers to market access: experimental evidence from Liberian firms." NBER Working Paper no. 27662.

About the authors

Vinayak Iyer
Golvine de Rochambeau

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