Recent updates:
New paper alert: Identifying Relationship-level Effects Using Covariance Restrictions (UPDATE JANUARY 2026)
in which we (with Daniel Lewis) propose a new model in which relationship-specific effects or shocks are identified in a bipartite network under mild covariance restrictionn. For example, separate demand shocks are identified for each bank from which a firm borrows. .We show that a simple estimator is consistent, derive its limiting distribution, and illustrate its performance in simulations. We document considerable bias in Abowd et al. (1999) style estimates and associated regressions, while finding significant deleterious effects of the post-2022 monetary contraction on exposed firms. We highlight novel heterogeneity in the transmission of monetary policy.
New paper alert: The Supply Chain Spillovers of Private Equity Buyouts
in which we (with Cédric Huylebroek) examine how supply chains contribute to PE investors’ ability to create and extract value. Leveraging unique production network data, we show that, during normal times, suppliers of PE-backed firms outperform their peers due to increased demand for inputs from PE-backed customers. However, during economic downturns, while PE-backed firms outperform their peers even more strongly, their suppliers show no signs of outperformance. Finally, we also show that PE buyouts, beyond their impact on suppliers, create crowding-out effects for competitors that rely on common suppliers.
New paper alert: Collateral and Credit
in which we (with Hans Degryse, Luc Laeven and Tong Zhao) study the role of collateral using the euro area corporate credit registry, AnaCredit. We first document key facts about the importance, distribution, and composition of collateral, including its presence, types, and values. In the second part of the paper, we examine the collateral channel in bank credit using the actual value of individual collateral. By exploiting within-firm across banks and withinbank across-firm variations for newly issued secured loans, we find that the elasticity of collateral value to loan commitment amounts is around 0.7´0.8. This collateral value elasticity exhibits substantial country and time heterogeneity, which can be explained by legal, financial, and macro conditions.