Sindy Li is a PhD candidate in economics at Stanford University. In her PhD dissertation she examines the role of information sharing in shaping trade credit relationships among Kenyan retail shops, and how electoral incentives drive the allocation of public funds in Kenya. She is currently working as a research fellow in the economics department at Warwick and collaborating with the International Growth Centre on a series of research projects in Myanmar on industrial relations and migrant worker living conditions.
In developing countries firm growth is hindered by credit constraints, which result from poor contract enforcement and asymmetric information. One solution is to provide infrastructure for lenders to share information on borrowers’ credit history, which can mitigate adverse selection and moral hazard. I investigate the barriers to and impact of introducing an information sharing service for small Kenyan retail shops and their trade credit providers (suppliers), by means of randomized information intervention and subsidy of takeup. I examine businesses’ decisions to share information, the impact of the service on information asymmetry and repayment, buyer-supplier relationships and spillover among retail shops.