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Small Business Index

Small and young businesses are essential for job creation, innovation, and economic growth. This suggests the need for frequent and real-time monitoring of the small business sector’s health, yet this has been made difficult due to lack of appropriate data.  In partnership with Intuit Quickbooks, Akcigit, Chhina, Cilasun, Miranda, Ocakverdi, and Serrano-Velarde (2023) fills this important gap by developing a new “Intuit QuickBooks Small Business Index” for the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada.  The Index aggregates a sample of anonymous QuickBooks Online Payroll subscriber data (QBO Payroll sample) from 333,000 businesses in the US, 66,000 in Canada, and 25,000 in the UK. 

Publications

• "Cheap Trade Credit and Downstream Competition", joint with M. Giannetti and E. Tarantino, Journal of Political Economy, 2021, Issue 6, pp. 1744-1796.

Idea: Using a dataset with information on inter-firm transactions, we provide evidence that suppliers offer cheap trade credit to ease competition in downstream markets.

• "Back To Basics: Basic Research Spillovers, Innovation Policy and Growth", joint with U. Akcigit and D. Hanley, Review of Economic Studies, 2021, Issue 1, pp. 1-43.

Idea: We introduce a model of endogenous growth through basic and applied research. Our key finding is that standard R&D policies can accentuate the dynamic misallocation in the economy.

Cited in the Economic Report of the President 2016

• "Marketplace Lending, Information Aggregation, and Liquidity." Joint with J. Frank,s and O. Sussman, Review of Financial Studies, 2021, Issue 5, pp. 2318-2361.

Idea: If auctions enhance information efficiency, why were they abandoned by lending marketplaces?

• "Lending Standards Over the Credit Cycle.” Joint with G. Rodano, and E. Tarantino, Review of Financial Studies, 2018, Volume 31, Issue 8, pp. 2943-2982. 

Idea: Using a discontinuity in the allocation of firms into credit risk categories we empirically identify the lending standards applied by banks to small and medium firms over the cycle. 

Winner of the 4Nations Cup Competition 

• “Bankruptcy Law and Bank Financing”, joint with G. Rodano and E. Tarantino, Journal of Financial Economics, 2016, Volume 120, Issue 2, pp. 363-382. 

Idea: Using a unique loan-level dataset, we provide empirical evidence on how firms' funding contracts depend on reorganization and liquidation in bankruptcy.

• "CEO Identity and Labor Contracts: Theory and Evidence from CEO Transitions", joint with Laurent Bach, Journal of Corporate Finance, 2015, Volume 33, pp. 227-242.

Idea: We argue that family links between a new CEO and his predecessor act as a commitment device for upholding implicit contracts with the workforce. 

• "The Deep-Pocket Effect of Internal Capital Markets", joint with X. Boutin, G. Cestone, C. Fumagalli and G. Pica, Journal of Financial Economics, 2013, Volume 109, Issue 1, pp. 122-145.

Idea: We provide evidence suggesting that incumbent firms' access to group deep pockets has a negative impact on entry in product markets.

Work in Progress

• "Committing to Grow:  Size-Dependent Regulations and Firm Dynamics in East Germany", joint with U. Akcigit, H. Alp, A. Diegmann.

Idea: We study the implications of employment targets on firm dynamics during the privatization of the East German economy. 

• "Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK", joint with U. Akcigit, R. Chhina, S. Cilasun, J. Miranda, E. Ocakverdi.

Idea: We develop a new small business index for the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada.  The Index aggregates a sample of anonymous QuickBooks Online Payroll subscriber data (QBO Payroll sample) from 333,000 businesses in the US, 66,000 in Canada, and 25,000 in the UK. 

• “Investment Dynamics in Italy: Financing Constraints, Demand and Uncertainty”, joint with S. Bond and G. Rodano, Bank of Italy Occasional Paper No. 283.

Idea: We investigate the most important factors leading to the decline in Italian manufacturing firm investment since 2008.

Media and Citations

• Article in the The Telegraph by Richard Tyler on "The Deep-Pocket Effect of Internal Capital Markets"

• Article in the Daily Pennsylvanian by Kurt Mitman on "Back To Basics"

• Article in US Chamber of Commerce Foundation by Mathew Jensen on "The Simple Economics of Basic Scientific Research"

• Article in Le Monde by Thibault Gajdos, "Menace sur la recherche publique"