Research

Working Papers

Estimating the Effects of Industrial Regulation when Treated and Control Firms Compete: A New Method with Application to the EU ETS, Co-authored with Helene Ollivier, Martin Jegard, and Raphael Calel

This paper presents a method for estimating treatment effects of regulations when treated and control firms compete. Difference-in-differences (DD) estimators fail to identify effects when outcomes at regulated firms influence outcomes at unregulated firms, as they do in models of imperfect competition. To overcome this limitation, we posit a structural model of differentiated product markets that generalizes previous work and show how to estimate treatment effects for multi-plant firms. We recover unbiased estimates of treatment effects in Monte Carlo experiments, while DD and other available methods do not. We apply our method to study the European carbon market's effects on French manufacturers. We find that this regulation reduced emissions of regulated plants, increased sales of regulated firms, and decreased emissions in aggregate, relative to an unregulated counterfactual

Production Function Estimation with Multi-Destination Firms, Co-authored with Helene Ollivier and Ariell Reshef

We develop a procedure to estimate production functions, elasticities of demand, and productivity when firms endogenously select into multiple destination markets where they compete imperfectly, and when researchers observe output denominated only in value. We show that ignoring the multi-destination dimension (i.e., exporting) yields biased and inconsistent inference. Our estimator extends the two-stage procedure of Gandhi et al. (2020) to this setting, which allows for cross-market complementarities. In Monte Carlo simulations, we show that our estimator is consistent and performs well in finite samples. Using French manufacturing data, we find average total returns to scale greater than 1, average returns to variable inputs less than 1, price elasticities of demand between -21.5 and -3.4, and learning-by-exporting effects between 0 and 4% per year. Alternative estimation procedures yield unrealistic estimates of returns to scale, demand elasticities, or both.

The Health Costs of Coal-Fired Power Plants in India, Co-authored with Akshaya Jha and Teevrat Garg

This paper estimates the effect of coal-fired power plants on infant mortality in India. We find that a one GW increase in coal-fired capacity corresponds to a 14% increase in infant mortality rates in districts near versus far from the plant site. This effect is 2-3 times larger than estimates from the developed world. Our effects are larger for: (1) older plants, (2) plants located in areas with higher baseline levels of pollution, and (3) plants burning domestic rather than imported coal. The environmental benefits from policy aimed at the power sector are thus likely to be substantially higher if targeted at older plants located in more polluted areas tailored to burn domestic rather than imported coal.

Do Entrepreneurship Policies Work? Evidence From 460 Start-up Program Competitions Across the Globe 

Many organizations around the world implement programs designed to encourage entrepreneurship, including grant prize awards, accelerator programs, incubators, etc. The goal of these programs is to supply entrepreneurs with early-stage support and visibility to help develop ideas and attract capital; but, if capital markets are efficient, good business ideas should find funding anyways. In this paper, I present evidence from the first global scale, quasi-experimental study of whether entrepreneurship programs improve outcomes for start-up firms. I employ a regression discontinuity design to test whether winners of start-up program competitions perform better ex-post than losers, where the threshold rank for winning the competition provides exogenous variation in program participation. With 460 competitions across 113 countries and over 20,000 competing firms, I find that winning a competitions increases the probability of firm survival by 64%, the total amount of follow-on financing by $260,000 USD, and total employment by 47%, as well as other web-based metrics of firm success. Impacts are driven by medium-size prize competitions, and are precisely estimated both in countries where the costs of starting a business are low and where these costs are high. These results suggest that capital market frictions indeed prohibit start-up growth in many parts of the world.

Work in progress

Estimating the Effects of Local Supply Shocks When Regions Trade: A New Method with Application to Climate Change, Co-authored with Helene Ollivier, Jeanne Astier, and Raphael Calel

Trade-Induced Spillovers from Natural Disasters, Co-authored with Helene Ollivier and Raphael Calel

Export Competition, Product Mix, and Productivity: Evidence from India's Experience under the MFA, Co-authored with Helene Ollivier

While a large literature investigates the impact of low-cost exports to the developed world on developed-world manufacturing sales, employment, productivity, and innovation, the corresponding impact on competing low-cost suppliers elsewhere in the developing world has gone unexamined. We study the impact of the liberalization of US import quotas in textile and apparel in 2005 with various developing countries on production outcomes in India. In a difference-in-difference framework, we find that Indian firms facing tougher competition as a result of US quota liberalization with other developing countries both dropped products newly exposed to export competition, and expanded sales and offerings of products that were previously unconstrained by quotas. These product-mix effects then generated heterogeneous impacts on firm-level sales, employment, labor productivity, and total factor productivity. For firms operating in product codes previously lightly constrained by US-Rest-of-World quotas, liberalization increased sales and productivity without increasing employment. Conversely, for firms operating in product codes previously heavily constrained by US-Rest-of-World quotas, liberalization increased employment, but lowered productivity, without increasing sales. The results indicate that efforts to escape competition are not always successful.

Published Articles

Foreign Demand, Developing Country Exports, and CO2 Emissions: Firm-Level Evidence from India.   Journal of Development Economics, 2021. Co-authored with Helene Ollivier 

Cleaner Firms or Cleaner Products? How Product Mix Shapes Emission Intensity from Manufacturing.  Journal of Environmental Economics and Management, 2018. Co-authored with Helene Ollivier

Working Paper version: Emission intensity and firm dynamics: reallocation, product mix, and technology in India

The Impact of Agricultural Biotechnology on Supply and Land-Use. Environment and Development Economics, 2014. Co-authored with Steven Sexton and David Zilberman

Agricultural Biotechnology: The Promise and Prospects of Genetically Modified Crops. Journal of Economic Perspectives, 2014. Co-authored with Steven Sexton and David Zilberman

Agricultural Biotechnology: Economics, Environment, Ethics, and the Future. Annual Review of Environment and Resources, 2013. Co-authored with Alan B. Bennett, Cecilia Chi-Ham, Steven Sexton, and David Zilberman

Testing the Theory of Trade Policy: Evidence from the Abrupt End of the Multifiber Arrangement. Review of Economics and Statistics, 2009. Co-authored with James Harrigan