Work in progress

FDI

Multinational Firms and the Origins of the Rise of Market Power, with Stefania Garetto.

We investigate the origins of the rise of market power that recent literature has documented. To do so, we examine differences in firms' market power depending on their exposure to international markets. We find that new multinationals, that is, firms that have expanded in foreign markets during our sample period, account for the majority of the growth in aggregate mark-ups and market concentration in the last two decades. This finding has important consequences for the distribution of the welfare effects of the rise in market power across countries.

Large Firm Dynamics, with Stefania Garetto.

The literature on trade dynamics documents patterns of entry and exit into and out of foreign markets mostly for small firms. This paper documents a similar dynamic behavior for large firms, distinguishing entry via export and via FDI, and switches across different modes of serving foreign markets. Using news information and firm-level data for a sample of U.S.-based, publicly listed manufacturing firms, we find that: 1. the data exhibit significant entry and exit flows also for large firms, both via export and FDI sales; 2. export status is highly persistent, and FDI status is even more persistent. 3. the international status of the firm is linked to stock market-based financial indicators.

REAL ESTATE

Misestimating House Values: Consequences for Household Finance, with Stefano Corradin (ECB) and Carles Vergara-Alert (IESE).

Households often misestimate the market value of their homes. How does such misestimation shape portfolio allocation and consumption? Using household-level panel data, we construct a novel measure of house value misestimation and identify causal effects through a new instrumental variable approach, exploiting exogenous variation in local information flows. Overvaluation increases perceived wealth and housing risk exposure, reducing risky asset holdings, raising consumption, and shifting portfolios toward safe assets. External validation exercises confirm that misestimation reflects meaningful heterogeneity in perceived housing wealth with real financial consequences.

Wired and Leveraged: The Commercial Real Estate Finance of the AI Data Center Boom, with Carles Vergara-Alert (IESE).

The rapid expansion of data center financing, driven by AI and cloud computing, raises questions about credit allocation in commercial real estate markets. We examine whether banks' growing data center exposure crowds out lending to other CRE borrowers. Using comprehensive supervisory loan data, we find that banks with higher data center loan shares significantly reduce lending to non-data center income-producing properties. Construction loans and commercial and industrial lending show no such displacement. We also document that business development companies partially fill the gap when banks pull back. These findings have implications for CRE concentration policy amid the AI infrastructure boom.