Published Papers
International Spillovers of Quality Regulations, (with Luca Macedoni).
International Economic Review, February 2025
CESifo Working Paper No. 11287
Previously circulated as "Quality Misallocation, Regulations, and Trade", CESifo Working Paper Series 9041 (April 2021)
Firm Resiliency: The Role of Spillovers, (with Meghana Ayyagari and Yuxi Cheng).
Journal of Financial and Quantitative Analysis, 2025.
Internet Appendix available here
SSRN Working Paper 4569288
Trade Liberalization and Chinese Students in U.S. Higher Education, (with Gaurav Khanna, Kevin Shih, Mingzhi Xu, and Miaojie Yu).
Review of Economics and Statistics (forthcoming)
CGD Working Paper Version (WP #536) (February 2021)
Replication Package
Quality Heterogeneity and Misallocation: The Welfare Benefits of Raising your Standards, (with Luca Macedoni)
Journal of International Economics, January 2022, 134:103544
Working Paper Version
Replication Package [Web Appendix: The CES Case] [Web Appendix: Other VES Cases] [Web Appendix: The Planner's Allocation]
Openness and Factor Shares: is Globalization Always Bad for Labor?, (with Asli Leblebicioglu).
Journal of International Economics, January 2021, 128:103406
Working Paper Version
Export Tax Rebates and Resource Misallocation: Evidence from a Large Developing Country, (with Qian Xuefeng and Mahmut Yasar).
Canadian Journal of Economics, November 2021, 54(4).
Markups and Misallocation with Evidence from Exchange Rate Shocks
Journal of Development Economics, September 2020, 146:1024-1094.
Working Paper Version
Credit and the Labor Share: Evidence from U.S. States (with Asli Leblebicioglu).
The Economic Journal, August 2020, 130: 1782–1816.
Web Appendix
Full replication files available on the EJ site
Exporter Heterogeneity and Price Discrimination: A Quantitative View (with Ina Simonovska and Jae Wook Jung).
Journal of International Economics, January 2019, 116:103-124.
Previously NBER Working Paper No. 21408.
WEB APPENDIX (See this appendix for an estimation of various models of monopolistic competition with non-homothetic preferences.)
Working Paper Version
FDI, Productivity and Country Growth: An Overview, 2009, (with Silvio Contessi).
Federal Reserve Bank of St. Louis Review, 91(2):61-78.
International Economic Review, February 2025
CESifo Working Paper No. 11287
Previously circulated as "Quality Misallocation, Regulations, and Trade", CESifo Working Paper Series 9041 (April 2021)
Firm Resiliency: The Role of Spillovers, (with Meghana Ayyagari and Yuxi Cheng).
Journal of Financial and Quantitative Analysis, 2025.
Internet Appendix available here
SSRN Working Paper 4569288
Trade Liberalization and Chinese Students in U.S. Higher Education, (with Gaurav Khanna, Kevin Shih, Mingzhi Xu, and Miaojie Yu).
Review of Economics and Statistics (forthcoming)
CGD Working Paper Version (WP #536) (February 2021)
Replication Package
Quality Heterogeneity and Misallocation: The Welfare Benefits of Raising your Standards, (with Luca Macedoni)
Journal of International Economics, January 2022, 134:103544
Working Paper Version
Replication Package [Web Appendix: The CES Case] [Web Appendix: Other VES Cases] [Web Appendix: The Planner's Allocation]
Openness and Factor Shares: is Globalization Always Bad for Labor?, (with Asli Leblebicioglu).
Journal of International Economics, January 2021, 128:103406
Working Paper Version
Export Tax Rebates and Resource Misallocation: Evidence from a Large Developing Country, (with Qian Xuefeng and Mahmut Yasar).
Canadian Journal of Economics, November 2021, 54(4).
Markups and Misallocation with Evidence from Exchange Rate Shocks
Journal of Development Economics, September 2020, 146:1024-1094.
Working Paper Version
Credit and the Labor Share: Evidence from U.S. States (with Asli Leblebicioglu).
The Economic Journal, August 2020, 130: 1782–1816.
Web Appendix
Full replication files available on the EJ site
Exporter Heterogeneity and Price Discrimination: A Quantitative View (with Ina Simonovska and Jae Wook Jung).
Journal of International Economics, January 2019, 116:103-124.
Previously NBER Working Paper No. 21408.
WEB APPENDIX (See this appendix for an estimation of various models of monopolistic competition with non-homothetic preferences.)
Working Paper Version
FDI, Productivity and Country Growth: An Overview, 2009, (with Silvio Contessi).
Federal Reserve Bank of St. Louis Review, 91(2):61-78.
WORKING Papers
Lobbying for Regulations: When Big Business Says Yes (with Luca Macedoni)
Do firms universally oppose regulations that raise production costs, or do their stances depend on intrinsic characteristics that create uneven outcomes across businesses? This question is vital for understanding firms’ behavior in regulatory lobbying. We extend a standard general equilibrium model with firm heterogeneity in productivity by incorporating two key elements: (1) governments can impose regulations, and (2) firms can lobby for either stricter or more lenient regulations. While regulations aim to address consumption externalities, they also raise both marginal and fixed production costs. This can drive less productive firms out of the market, and leave surviving firms potentially better off. Our model shows that large firms are likely to lobby for stricter regulations when these regulations primarily increase fixed costs. To test these predictions, we use a guided machine learning algorithm to classify US firms’ positions on regulatory issues based on their lobbying reports. Our findings reveal that larger firms, particularly in concentrated industries, tend to support more stringent regulations. Additionally, we identify a negative relationship between capital intensity, leverage, and regulatory support, suggesting that a firm's operational flexibility plays a key role in shaping its stance on regulatory changes.
Prices and Immigration: Firm-Level Evidence (with Ryan Kim and Justin Leung)
This paper studies how firms price their products in response to immigration inflows. We build detailed data that combines product-destination-level scanner prices with the producer's production locations and identify an exogenous immigration inflow using the historical ancestry information of immigrants. We find that the immigration inflows decrease prices. We investigate the underlying mechanism by separating the total immigration effect into two different channels: the increase in product demand and the increase in labor supply. We find that the negative effect of immigration on prices is entirely attributed to the product demand effect, as immigrants search for lower-priced products. On the other hand, the labor supply effect increases prices as immigrants facilitate customer acquisition and retention technology. The structural framework highlights the importance of changes in demand elasticities, price markups, and product appeal in understanding firm pricing conditional on immigration inflows.
Automation Under Constraints: Exchange Rates, Interest Rates, and Firm Investment (with Meghana Ayyagari, Vojislav Maksimovic, and Rodimiro Rodrigo)
new draft coming soon!
A 33% yen depreciation between 2012-15 made imported industrial robots suddenly cheaper for U.S. firms. Paradoxically, automation surged at financially constrained firms—those with high leverage, low cash or text-based debt warnings—while unconstrained firms barely reacted. Matching bill-of-lading records to Compustat, we show that a 10% yen fall raises the probability of robot adoption by 2.3 percentage points overall and by an additional 1.4 percentage points for constrained firms. High-frequency monetary surprises around FOMC announcements reveal the flip-side: a 25 basis point hike in the 1-year Treasury par yield cuts adoption by an additional 2 percentage points for constrained firms. These effects are specific to automation technologies, not general investment activity, highlighting a distinct financing channel behind technological upgrading. A new two-period collateral model — the first to predict this reversal— rationalizes why high-spread borrowers are hypersensitive to both input-price and financing shocks. Our results imply that price channels dominate rate channels in driving technology diffusion and that macro shocks can tilt automation toward firms operating under tight financial constraints.
Vertical Integration and Financial Frictions: Evidence from a Credit Market Reform (with Asli Leblebicioglu)
This paper investigates how financial development affects firms' vertical organization by examining a credit market reform in India. Using staggered implementation of Debt Recovery Tribunals (DRTs) across Indian states, we identify the causal impact of improved credit access on vertical specialization. We construct firm-level measures of vertical span-- a measure capturing the number of production stages performed within firm boundaries-- and analyze how it changes following credit market reforms. We find that firms exposed to DRT implementation significantly reduce their vertical span, increasing their reliance on outsourced inputs. Results show larger effects for bigger firms and those with greater initial input intensity, while effects are smaller for highly leveraged firms. We also show that firms are able to vertically specialize by increasing borrowing and grow their intermediate input shares after reform implementation.
Our findings reveal a novel channel through which financial development contributes to productivity and growth: by enabling vertical specialization and allowing firms to focus on their core competencies while outsourcing peripheral production stages.
Do firms universally oppose regulations that raise production costs, or do their stances depend on intrinsic characteristics that create uneven outcomes across businesses? This question is vital for understanding firms’ behavior in regulatory lobbying. We extend a standard general equilibrium model with firm heterogeneity in productivity by incorporating two key elements: (1) governments can impose regulations, and (2) firms can lobby for either stricter or more lenient regulations. While regulations aim to address consumption externalities, they also raise both marginal and fixed production costs. This can drive less productive firms out of the market, and leave surviving firms potentially better off. Our model shows that large firms are likely to lobby for stricter regulations when these regulations primarily increase fixed costs. To test these predictions, we use a guided machine learning algorithm to classify US firms’ positions on regulatory issues based on their lobbying reports. Our findings reveal that larger firms, particularly in concentrated industries, tend to support more stringent regulations. Additionally, we identify a negative relationship between capital intensity, leverage, and regulatory support, suggesting that a firm's operational flexibility plays a key role in shaping its stance on regulatory changes.
Prices and Immigration: Firm-Level Evidence (with Ryan Kim and Justin Leung)
This paper studies how firms price their products in response to immigration inflows. We build detailed data that combines product-destination-level scanner prices with the producer's production locations and identify an exogenous immigration inflow using the historical ancestry information of immigrants. We find that the immigration inflows decrease prices. We investigate the underlying mechanism by separating the total immigration effect into two different channels: the increase in product demand and the increase in labor supply. We find that the negative effect of immigration on prices is entirely attributed to the product demand effect, as immigrants search for lower-priced products. On the other hand, the labor supply effect increases prices as immigrants facilitate customer acquisition and retention technology. The structural framework highlights the importance of changes in demand elasticities, price markups, and product appeal in understanding firm pricing conditional on immigration inflows.
Automation Under Constraints: Exchange Rates, Interest Rates, and Firm Investment (with Meghana Ayyagari, Vojislav Maksimovic, and Rodimiro Rodrigo)
new draft coming soon!
A 33% yen depreciation between 2012-15 made imported industrial robots suddenly cheaper for U.S. firms. Paradoxically, automation surged at financially constrained firms—those with high leverage, low cash or text-based debt warnings—while unconstrained firms barely reacted. Matching bill-of-lading records to Compustat, we show that a 10% yen fall raises the probability of robot adoption by 2.3 percentage points overall and by an additional 1.4 percentage points for constrained firms. High-frequency monetary surprises around FOMC announcements reveal the flip-side: a 25 basis point hike in the 1-year Treasury par yield cuts adoption by an additional 2 percentage points for constrained firms. These effects are specific to automation technologies, not general investment activity, highlighting a distinct financing channel behind technological upgrading. A new two-period collateral model — the first to predict this reversal— rationalizes why high-spread borrowers are hypersensitive to both input-price and financing shocks. Our results imply that price channels dominate rate channels in driving technology diffusion and that macro shocks can tilt automation toward firms operating under tight financial constraints.
Vertical Integration and Financial Frictions: Evidence from a Credit Market Reform (with Asli Leblebicioglu)
This paper investigates how financial development affects firms' vertical organization by examining a credit market reform in India. Using staggered implementation of Debt Recovery Tribunals (DRTs) across Indian states, we identify the causal impact of improved credit access on vertical specialization. We construct firm-level measures of vertical span-- a measure capturing the number of production stages performed within firm boundaries-- and analyze how it changes following credit market reforms. We find that firms exposed to DRT implementation significantly reduce their vertical span, increasing their reliance on outsourced inputs. Results show larger effects for bigger firms and those with greater initial input intensity, while effects are smaller for highly leveraged firms. We also show that firms are able to vertically specialize by increasing borrowing and grow their intermediate input shares after reform implementation.
Our findings reveal a novel channel through which financial development contributes to productivity and growth: by enabling vertical specialization and allowing firms to focus on their core competencies while outsourcing peripheral production stages.
Work In Progress
Robot Adoption across the Product Life Cycle: Evidence for US Publicly Listed Firms (with Meghana Ayyagari, Vojislav Maksimovic, and Rodimiro Rodrigo)
