Publications
Longevity and the Value of Trade Relationships (with Ryan Monarch)
Accepted at the Journal of International Economics
New Version September 2020, download; Presentation Slides download.
(previously circulated under the title "Learning and the Value of Trade Relationships")
Abstract: 80 percent of U.S. imports occur in preexisting firm-to-firm relationships, so disruptions to them can have large and long-lasting effects. Using U.S. Census data, this paper shows that as importers and their suppliers transact repeatedly, traded quantities and survival probabilities rise. We develop a general equilibrium trade model with relationship dynamics that is consistent with these facts. The quantification implies that long-term relationships are substantially more valuable than new relationships, with wide variation across source countries. The model shows that losing relationship capital is costly for an economy, with disruptions to relationships causing sizable drops in welfare and substantially lower levels of consumption and trade in the short- to medium term.
Institutional Investors, the Dollar and U.S. Credit Conditions (with Friederike Niepmann)
Journal of Financial Economics, January 2023 link; Latest Version: September 2020 download; VoxEU column
Abstract: A strong dollar has been shown to reduce capital flows and lending at the global level. This paper documents significant adverse effects on credit also in the U.S. economy: a one-point appreciation in the U.S. broad dollar index reduces U.S. banks’ corporate loan originations by 4 percent. These effects have emerged with the shift of traditional financial intermediation from banks to less regulated entities, especially CLOs and mutual funds, which are more sensitive to global developments and active in the secondary market. When the dollar strengthens, demand for loans on the secondary market falls, with prices declining and liquidity worsening.
Foreign Currency Loans and Credit Risk: Evidence from U.S. Banks (with Friederike Niepmann)
Journal of International Economics, March 2022 link; Latest Version: December 2019, download.
The Effect of U.S. Stress Tests on Monetary Policy Spillovers to Emerging Markets (with Friederike Niepmann and Emily Liu)
Review of International Economics, IBRN Special Issue, February 2021 link; Version October 2019, download.
International Transfer Pricing and Tax Avoidance: Evidence from the linked Tax-Trade Statistics in the UK (with Li Liu and Dongxian Guo)
Review of Economics and Statistics, October 2020 link; Version September 2018, download; Presentation Slides download
No Guarantees, No Trade: How Banks Affect Export Patterns (with Friederike Niepmann)
Journal of International Economics, September 2017 link; Presentation Slides download
Coverage: VoxEU; Wall Street Journal Blog
International Trade, Risk and the Role of Banks (with Friederike Niepmann)
Journal of International Economics, July 2017 link; Presentation slides download
Coverage: Liberty Street Economics Blog: Part I ; Part II and VoxEU.
Data on LC and DC intensities: data set.
Wages and International Tax Competition (with Sebastian Krautheim)
Review of International Economics, November 2016, link
Payment Choice in International Trade: Theory and Evidence from Cross-country Firm Level Data (with Andreas Hoefele and Zhihong Yu)
Canadian Journal of Economics, February 2016 link; Presentation Slides download
Towards a Theory of Trade Finance
Journal of International Economics, September 2013 link; Presentation Slides download
Bank Bailouts, International Linkages and Cooperation (with Friederike Niepmann)
American Economic Journal: Economic Policy, November 2013 link
Heterogeneous Firms, ‘Profit Shifting’ FDI and International Tax Competition (with Sebastian Krautheim)
Journal of Public Economics, February 2011 link
The EU Commission's Proposal for a Financial Transaction Tax (with John Vella and Clemens Fuest)
British Tax Review, December 2011; CBT Working Paper 11/17 (December 2011) download