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CEP/STICERD Applications Seminars & CEP/STICERD Applications Seminars

Achieving Scale Collectively

Vittorio Bassi

Monday 22 November 2021 16:00 - 17:30

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.


About this event

This paper argues that rental market interactions allow small firms to increase their effective scale and mechanize production, even when each individual firm would be too small to invest in expensive machines. We conduct a novel survey of manufacturing firms in Uganda, which uncovers an active rental market for large machines between small firms in informal clusters. We then build an equilibrium model of firm behavior and estimate it with our data. Our results show that the rental market is quantitatively important for mechanization and productivity since it provides a workaround for other market imperfections that keep firms small. We also show that the rental market shapes the effectiveness of policies to foster mechanization, such as subsidies to purchase machines.

Applications (Applied Micro) Seminars are held on Mondays in term time at 12:00-13:30 in 3.05 in person.

Seminar organiser: Jörn-Steffen Pischke

For further information please contact Lubala Chibwe, either by email: l.chibwe@lse.ac.uk.

Please use this link to subscribe or unsubscribe to our mailing list (applications).

Applications (Applied Micro) Seminars are held on Mondays in term time at 12:00-13:30 in 3.05 in person.

Seminar organiser: Jörn-Steffen Pischke

For further information please contact Lubala Chibwe, either by email: l.chibwe@lse.ac.uk.

Please use this link to subscribe or unsubscribe to our mailing list (applications).