Research

Working Papers

Passive Common Ownership and Firm Markup: Market Power or Efficiency? - Job Market Paper

Presented at: HEC Montreal (Montreal, CA), Monash Business School (Melbourne, AUS), SFI Job Market Workshop (Zurich, CH), FMA (Chicago, US), AFA PhD poster session (New Orleans, US), Boston College - PhD Seminar (Boston, US), USI Brown bag Seminar (Lugano, Ch), SFI-USI Summer school (Lugano, CH), WFBS (Miami, US), SWFA (Houston, US);

Abstract: This paper provides empirical evidence that passive common owners facilitate information exchange across companies, resulting in increased productivity, investment efficiency, and markups. I highlight the pivotal role of active engagement by passive investors as a key mechanism in the information dissemination process. Importantly, firms achieve these gains without reducing output and R&D. This supports the notion that markup increases result from improved efficiency rather than from exploiting market power. This research sheds light on a novel positive impact of common ownership in public markets.

How do firms choose between growth and efficiency?, 

with Laurent Frésard, Loriano Mancini and Enrique Schroth 

Presented at: EFA (Amsterdam, NL)*, SFI Research Days (Gerzensee, CH)*, BI Oslo (Oslo, NO)*, HEC - EPFL (Lausanne,CH)*, University of Bonn (Bonn, GE)*, Collegio Carlo Alberto (Torino, IT)*;

Abstract: This paper explores the relationship between firms’ growth and efficiency. To measure it, our approach treats productive efficiency as a deliberate choice made by firms, as opposed to taken as given by the firm and estimated as a residual. In our model, firms choose capital and labor jointly with effort to make these inputs more productive. Using this model, we estimate firms’ unobservable efficiency effort from the data and find that young firms prioritize growth, while older firms focus more on efficiency. Over time, firms tend to shift their emphasis towards efficiency. Among young firms, those that pursue high growth tend to achieve higher markups, but also face a greater risk of failure. Our analysis sheds light on the factors that influence firms’ growth and efficiency strategies and their implications. 

Debt and Equity Crowdfunding in the financial growth cycle 

with Markus Lithell, Matteo Pirovano, Trang Q. Vu

Presented at:  SFI Research Days (Gerzensee, CH)*, Norwegian School of Economics (Bergen, NO)*, Università della Svizzera italiana (Lugano, CH);

Abstract: Since 2016, US firms can offer securities to retail investors via crowdfunding platforms. We argue that crowdfunding, by hybridizing design elements of public and private securities, provides unique financing opportunities. We investigate firms’ choice between issuing crowdfunded debt and equity and relate this to their stage in the financial growth cycle and access to bank financing. Firms that are less profitable, are in an earlier developmental stage, and have stronger ties to the banking system are more likely to issue crowdfunded equity than debt. Successful crowdfunding is associated with increases in firm size, revenue, and profitability for early-stage firms, but not late-stage ones. Our findings are consistent with crowdfunding alleviating capital constraints for startups with less access to traditional financing. 

Work in Progress

Measuring Resiliency

with  Loriano Mancini 

*Coauthor