Ann Harrison

Ann E. Harrison is William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the Wharton School, University of Pennsylvania. Prior to joining Wharton, she taught students at the MBA, master's, PhD, and undergraduate levels at various other universities, including Columbia Business School, the University of California, Berkeley, the Kennedy School of Government at Harvard University, and the University of Paris.

Before joining the Wharton School, Professor Harrison spent two years in Washington D.C. as the Director of Development Policy at the World Bank. Prior to that, she served as the head of the research team at the World Bank on international trade and investment. Between 2001 and 2011, she was Professor of Agricultural and Resource Economics at the University of California, Berkeley. Professor Harrison received her PhD in Economics from Princeton University and graduated with highest distinction in Economics and History from the University of California, Berkeley.

Professor Harrison is a Research Associate at the National Bureau of Economic Research, a member of the United Nations Committee for Development Policy, and an affiliate of the International Growth Centre in London. She is on the editorial boards of the Journal of Asian Economics, the Journal of Economic Literature, The World Bank Research Observer, and serves on various advisory committees at the World Bank and elsewhere.

Her research is in the areas of emerging markets, multinational firms, international trade, productivity, and labor markets. Professor Harrison has published in the top journals in her areas of research. Her book, Globalization and Poverty, was published by the University of Chicago Press. She has lectured widely, including at most major US universities and in India, China, Latin America, Europe, the Philippines, and North Africa. Her most recent work evaluates the impact of antisweatshop campaigns and corporate social responsibility; the linkages between globalization of firms, worker wages and employment; the effectiveness of industrial policy; and determinants of productivity growth in China and India.

Lionel Fontagne and Ann Harrison, The FactoryFree Economy (2016)

Jing Cai and Ann Harrison (Working), Industrial Policy in China: Some Unintended Consequences?.

Abstract: We explore the impact of a tax reform in northeastern provinces of China which reduced the valueadded tax on investment goods. While the goal of the reform was to encourage upgrading of technology, our results suggest that there was no significant increase in fixed investment, new product introduction, or productivity. However, we do find that firms shifted the composition of investment towards machinery, and increased the capital intensity of production, which is consistent with a fall in the price of capital relative to labor. As a result, employment fell significantly in the treated provinces and sectors. For domestic firms, employment fell by almost 7.5%. Our results are robust to a variety of approaches, and suggest that the primary impact of the policy has been to induce laborsaving growth. This policy has since been extended to the rest of China.

Ann Harrison, Benjamin Hyman, Leslie Martin, Shanti Nataraj (2015), When Do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India, National Bureau of Economic Research Working Paper 21763.

Abstract: India has a multitude of environmental regulations but a history of poor enforcement. Between 1996 and 2004, India's Supreme Court required 17 cities to enact Action Plans to reduce air pollution through a variety of commandandcontrol (CAC) environmental regulations. We compare the impacts of these regulations with the impact of changes in coal prices on establishmentlevel pollution abatement, coal consumption, and productivity growth. We find that higher coal prices reduced coal use within establishments, with price elasticities similar to those found in the US. In addition, higher coal prices are associated with lower pollution emissions at the district level. CAC regulations did not affect withinestablishment pollution control investment or coal use, but did impact the extensive margin, increasing the share of large establishments investing in pollution control and reducing the entry of new establishments. For reducing SO2 emissions, our results suggest that higher coal prices were more effective in improving environmental outcomes than command and control measures.

Ann Harrison, Leslie Martin, Shanti Nataraj (2014), In with the Big, Out with the Small: Removing SmallScale Reservations in India, National Bureau of Economic Research, NBER Working Papers 19942.

Abstract: An ongoing debate in employment policy is whether promoting small and medium enterprises creates more employment. Do small enterprises generate more employment growth than larger firms? We use the elimination of smallscale industry (SSI) promotion in India to address this question. For 60 years, SSI promotion in India focused on reserving certain products for manufacture by small and medium establishments. We identify the consequences for employment growth, investment, output, productivity, and wages of dismantling India’s SSI reservations. We exploit variation in the timing of dereservation across products; our identification strategy is also robust to measuring the longrun impact of national SSI policy changes using variation in pretreatment exposure at the district level, and to conducting placebo tests using products that were never dereserved. Districts more exposed to dereservation experienced higher employment and wage growth. The results suggest that promoting employment growth in the Indian case was not achieved via SSI reservation policies.

Luosha Du, Ann Harrison, Gary Jefferson (2014), FDI Spillovers and Industrial Policy: The Role of Tariffs and Tax Holidays, World Development, 64 (C), pp. 366383.

Abstract: This paper examines how industrial policy – specifically tariff liberalization and tax subsidies – affects the magnitude and direction of FDI spillovers. We examine these spillover effects across the diverse ownership structure of China’s manufacturing sector for 1998 through 2007. We find that tariff reforms, particularly tariff reductions associated with China’s WTO ascension, increased the productivity impacts of FDI’s backward spillovers. Tax policy – both corporate income and VAT subsidies – has seemingly drawn FDI into strategic industries that spawn significant vertical spillovers. We conclude that liberalization measures during the critical 1998–2007 period on balance served to enhance productivity growth in Chinese industry.

Ann Harrison, Justin Yifu Lin, Lixin Colin Xu (2014), Explaining Africa's (Dis)Advantage, World Development, 63 (C), pp. 5977.

Abstract: Africa’s economic performance has been widely viewed with pessimism. In this paper, firmlevel data for around 80 countries are used to examine formal firm performance. Without controls, manufacturing African firms perform significantly worse than firms in other regions. They have lower productivity levels and growth rates, export less, and have lower investment rates. Once geography, political competition, and the business environment are controlled for, formal African firms lead in productivity levels and growth. Africa’s conditional advantage is higher in lowtech than in hightech manufacturing, and exists in manufacturing but not in services. The key factors explaining Africa’s disadvantage at the firm level are lack of infrastructure, access to finance, and political competition.

Avraham Ebenstein, Ann Harrison, Margaret McMillan, Shannon Phillips (2014), Estimating the Impact of Trade and Offshoring on American Workers using the Current Population Surveys, The Review of Economics and Statistics,, 96 (3), pp. 581595.

Avraham Ebenstein, Ann Harrison, Margaret McMillan, Shannon Phillips (2014), Why Are American Workers Getting Poorer? Estimating the Impact of Trade and Offshoring Using the CPS , National Bureau of Economic Research.

Abstract: We suggest that the impact of globalization on wages has been missed because its effects must be captured by analyzing occupational exposure to globalization. In this paper, we extend our previous work to include recent years (20032008), a period of increasing import penetration, China’s entry into the WTO, and growing US multinational employment abroad. We find significant effects of globalization, with offshoring to low wage countries and imports both associated with wage declines for US workers. We present evidence that globalization has led to the reallocation of workers away from high wage manufacturing jobs into other sectors and other occupations, with large declines in wages among workers who switch, explaining the large differences between industry and occupational analyses. While other research has focused primarily on China’s trade, we find that both imports and offshoring to China have led to wage declines among US workers. However, the role of trade is quantitatively much more important. We also explore the impact of trade and offshoring on labor force participation rates. While offshoring to China has a negative impact on US labor force participation, other factors such as increasing computer use and substitution of capital for labor are significantly more important determinants of US employment rates across occupations.

Ann Harrison, Leslie Martin, Shanti Nataraj (2013), Learning versus Stealing: How important are MarketShare Reallocations to India’s Productivity Growth?, The World Bank Economic Review, 27 (2), pp. 202228.

Abstract: Recent trade theory emphasizes the role of marketshare reallocations across firms (“stealing”) in driving productivity growth, whereas previous literature focused on average productivity improvements (“learning”). We use comprehensive, firmlevel data from India’s organized manufacturing sector to show that marketshare reallocations were briefly relevant to explain aggregate productivity gains following the beginning of India’s trade reforms in 1991. However, aggregate productivity gains during the period from 1985 to 2004 were largely driven by improvements in average productivity. We show that India’s trade, FDI, and licensing reforms are not associated with productivity gains stemming from market share reallocations. Instead, we find that most of the productivity improvements in Indian manufacturing occurred through “learning” and that this learning was linked to the reforms. In the Indian case, the evidence rejects the notion that market share reallocations are the mechanism through which trade reform increases aggregate productivity. Although a plausible response would be that India’s labor laws do not easily permit market share reallocations, we show that restrictions on labor mobility cannot explain our results. JEL Codes: F13, F14, F16, O24, O25.

Ann Harrison (2012), Industrial Policy and Development: The Political Economy of Capabilities Accumulation, Journal of Economic Literature, L.

Abstract: There has been a remarkable convergence over the last several decades in thinking about the building blocks of economic growth. The importance of macroeconomic stability, high rates of physical and human capital investment, a strong rule of law, and capable institutions are generally agreed to be critical components of success. There is one ingredient, however, on which a typical economist in Beijing and a random professor from Harvard or Princeton are likely to disagree: the role for industrial policy.

Past Courses

MGMT205 MULTINATL CORP STRATEG

This course focuses on the creation of competitive advantage in the multinational firm. It examines the nature of global competition by exploring the characteristics of global versus nonglobal industries and firms. We also explore different types of international strategy and structure and examine the specific challenges of managing in multiple countries and markets. Finally, we consider the strategic allocation of resources along the value chain and the role of strategic alliances as a crucial element of an effective global strategy.

MGMT611 MANAGING EST ENTERPRISE

The management of large, established enterprises creates a range of multifacet challenges for the general manager. A general manager needs to understand the internal workings of a firm, how to assess and create a strategy, and how to take into account increasing, globalization. While these issues are distinct, they are very much intertwined. As a result, this course will provide you with an integrated view of these challenges and show you that effective of an established enterprise requires a combination of insights drawn from economics, sociology, psychology and political economy.

MGMT612 MANAGING EMERG ENTRPRSE

Emerging enterprises, the focus in this course, are small, new, fastgrowing organizations. Their founders and managers face multifaceted challenges: how to assess the competitive position of their business model and develop a strategy; how to develop the internal organizational structure, culture, and policies for selecting and managing employees; and how to pursue global opportunities. We cover these challenges in separate modules on strategy, human and social capital, and global issues. The human and social capital module covers classic management challenges of aligning interests of the individual and the organization; managing individual psychological needs and social influences; and developing employee capabilities that provide competitive advantage. Also covered are unique challenges that yound organizations face, i.e. building an effective culture; recruiting, selecting, and retaining talent; building systematic approaches to motivating employees; coping with the stresses of rapid growth; and leveraging the benefits (and avoiding the liabilities) of the founder's powerful imprint. ,The strategy module covers fundamental issues central to the competitiveness of the enterprise. Because the strategy field is broad, MGMT 612 emphasizes topics and frameworks that are most relevant for younger firms, such as innovation, disruption, managing resource constraints, and building capabilities. However, a key insight of the module is the importance of seeing the playing field from the perspective of the competition. Thus, by the end of this section, students will have a robust grounding in strategy that will allow them to succeed, whether their career path leads to a Fortune 100 firm or a garage start up. ,The global module covers the emerging firm's decision about when (and whether) to internationalize. This decision must address which foreign markets to enter; the mode of entry; the sequence of moves to develop capabilities; what organizational form to choose; where to establish HQ; and how to adapt to the unique economic and institutional features of different markets. In all these issues, the emphasis is on how young, resourceconstrained firms can position themselves profitably in globally competitive markets. For the final project, student teams provide integrated analysis across the modules for an emerging enterprise of their choice.

• World Bank Research Grants, 2010
• National Science Foundation Grants, 2009
• UC Berkeley Committee on Research Grants, 2008
• UC Berkeley Committee on Research Grants, 2004
• National Science Foundation Grants, 2004
• Giannini Foundation Grants, 2001
• UC Berkeley Committee on Research Grants, 2001
• Eugene Lang Junior Faculty Research Fellowship, 1999
• Chazen Institute Research Grants, 1998
• Chazen Institute Research Grants, 1995
• World Bank Research Grants, 1993
• Princeton University Teaching Award, 1987
• Sloan Foundation Fellowship, 1987
• Princeton University Fellowship, 1983

Knowledge @ Wharton

• Weighing the Impact of a U.S. Border Adjustment Tax, Knowledge @ Wharton 02/23/2017
• Can Trump – or Anyone – Bring Back American Manufacturing?, Knowledge @ Wharton 11/30/2016
• Is Free Trade Really Free? Why Protectionism Is Alive and Well, Knowledge @ Wharton 02/08/2016
• Will Angus Deaton’s Nobel Help Change Our Approach to Poverty?, Knowledge @ Wharton 10/15/2015
• Emerging Multinationals: The Talent War’s Latest Contenders, Knowledge @ Wharton 09/29/2015
• Is Small Beautiful? Not for Driving Job Growth…, Knowledge @ Wharton 12/03/2014
• As Developing Economies Grow, Global Value Chains Reach a Turning Point, Knowledge @ Wharton 10/21/2013