Research

Presented at Erasmus University Rotterdam (2023), Advanced Graduate Workshop on Poverty, Development and Globalization 2023 (Bengaluru) and European Trade Study Group 2023 (Surrey).

In many emerging economies, compulsory land acquisition by the government is an integral part of industrial policy. This use of eminent domain, especially in fragmented land markets, ensures private investors are not burdened by potentially prohibitively high negotiation costs in the land acquisition process. While this tool might stimulate industrialisation and bring about allocative efficiency, it comes at a cost: those whose land is expropriated suffer long-term welfare losses. To investigate this trade-off, this paper studies the impact of an increase in land acquisition costs on industrial development using an unexpected reform that placed restrictions on compulsory land acquisition for Special Economic Zones (SEZs) in India. I combine this policy shock with ex-ante variation across Indian states in compulsory acquisition policy for SEZs in a difference-in-differences design. I find that this increase in land acquisition costs reduces the average size of SEZs because its industrial composition changes, with the share of manufacturing decreasing by almost 40 percent. Using novel data on SEZ proposals, I show that this effect is mostly driven by lower intentions to entry, with no significant differences in actual SEZ operations. Moreover, I show using a spatial difference-in-differences design that manufacturing SEZs under the new policy contribute more to local employment than their older counterparts. I reconcile these findings through the Hopenhayn (1992) model, which shows that a higher entry cost reduces entry but induces selection. 

Presented at Erasmus University Rotterdam, ETSG 2018 (Warsaw) and the CEP Junior Trade Workshop 2022 (LSE). 

This paper develops a general equilibrium model of trade intermediation with search frictions and firm heterogeneity. Firms decide whether to export, and if so, whether to use an intermediary. Both firms and intermediaries need to invest in market penetration to reach foreign consumers, but the intermediary can transport multiple goods through the same advertising network. A firm that opts for intermediation saves the cost of market penetration but loses out on demand since the intermediary charges a higher price. The corresponding lost profit increases more quickly in productivity than the optimal investment in advertising. Therefore, the equilibrium exhibits productivity sorting in the export mode: the most productive firms export directly, the least productive do not export and the moderately productive firms use an intermediary. In line with empirical evidence, I find that the resulting trade network is characterized by negative assortative matching both in terms of number of connections and size. Moreover, intermediaries make up a higher share of exports when goods are more homogeneous and when the costs of exporting are higher. Finally, the model predicts that sales of an intermediated firm are less responsive to trade liberalization than direct exporters. Trade liberalization reduces the diversity of intermediated products but increases the number of intermediated firms.

Presented at Erasmus University Rotterdam (2022), Workshop on Causal Inference with Guido Imbens (2022) and ETSG 2022 (Groningen).

This paper investigates the role of domestic trade costs in determining local labor market outcomes after a reduction in international trade costs. We introduce internal geography and limited labor mobility in a Ricardian trade model with sectoral linkages. We establish that the presence of domestic transportation costs ensures that inland regions are more shielded from both the positive and negative effects of trade liberalization than their coastal counterparts. We then aim to provide quasi-experimental evidence for this mechanism using the Indian trade liberalization as a natural experiment. An advantage of our study is that we proxy regional transportation costs using detailed historical information on India's infrastructure, including the rail and road network, international and regional transportation hubs. Our analysis shows that distance to the port indeed reduces the passthrough of the trade shock: intuitively, the greater the distance between a region and the port, the lower the impact of trade liberalisation because of increasing domestic transport costs.