Working papers

• Entry along the supply chain: removing growth restrictions on firms in India

Presentations: EFA Poster session 2023, PSDRN-STEG 2023, AFA 2023, NEUDC 2022, FMA 2022, CEPR WEFIDEV 2022, ENTFIN 2022, TADC 2021

I study the spill-over effects of removing barriers to growth in intermediate input markets on entry and growth of downstream firms. Constrained intermediate input producers produce low quality goods and, in turn, hamper access to high quality domestic inputs for downstream firms. I show that with the repeal of product reservation in India, whereby hundreds of products stop being reserved for exclusive production by small firms, production of high quality intermediate inputs increases. Entry in the downstream product market increases and entrants are not worse on observable characteristics. Downstream incumbents substitute away from imports and invest potentially to upgrade quality. My results imply that business dynamism has positive spill-over effects along the supply chain.

• ESG incidents and fundraising in private equity  (with Teodor Duevski and Tianhao Yao)

Do ESG considerations matter for private markets? We present novel evidence on how ESG incidents aect the capital-raising ability of Private Equity (PE) firms. Using a sample of global buyout investments, we find that PE firms experiencing environmental and social (E&S) incidents in their portfolio companies are less likely to raise a subsequent fund and subsequent funds are smaller. The relative size of subsequent funds is 9%-12% smaller for PE firms experiencing higher-than-median number of E&S incidents. The negative effect is stronger for less reputable PE firms. We do not find similar effects for governance (G) incidents. The decrease in capital commitment does not seem to be related to performance, instead it is consistent with departure of ESG-concerned limited partners with whom the PE firm had a past relationship. Following an incident, PE firms hire more employees with an ESG background and experience fewer incidents in their new investments.

• Creative destruction: Do incumbents continue to innovative?

Presentations: FMA New Ideas session 2022, AFFECT New Ideas session 2022

I study the process of creative destruction to understand how firms respond to being potentially displaced by new technologies. Specifically, I ask whether these firms continue to innovate. Theory predicts that more intense competition induces firms closer to the frontier to catch up but may discourage innovation in firms further away from the frontier. I employ measures of patent text similarity to construct a measure of creative destruction to study this question. The project further aims to understand how firms regain their innovation edge and the stock market implications of displacement risk.