Gains from Patent Protection: Innovation, Market Power and Cost Savings in India, with Apoorva Gupta (Reject & Resubmit at AEJ: Economic Policy). 

This paper uses the implementation of a TRIPS compliant patent regime in India to study the effect of stronger patent protection on innovation and market power. Exploiting cross-industry variation in the importance of patents, we find that the reform led to more patent applications and higher investment in research and development for firms more exposed to the reform. We also estimate an increase in average firm-product level markups which can be mainly attributed to lower marginal costs, not higher prices. Our results indicate that process innovations and output expansion have contributed to these cost savings.

Horizontal Mergers and Market Power in India, with Nesma Ali.

This paper analyzes the effects of horizontal mergers in Indian manufacturing. Detailed information on prices and quantities at the level of narrowly defined product categories allows us to identify merger-pairs with product overlap and non-merging rival firms across a broad set of industries. We apply recent methodological advances in the estimation of production functions to estimate markups, marginal costs and proxies for product quality. Our results indicate that, on average, mergers are associated with increases in prices and markups within the merged entity and its competitors while there is little evidence for cost savings. Further, average product quality seems to increase within merging firms.

Vertical Integration, Customer Access, and Spillovers in Production Networks, with Katharina Erhardt and Giulia Sabbadini

This paper analyses how vertical mergers affect non-integrating firms in the production networks of merging entities. Using novel data across a wide range of industries and countries, we document that following a vertical merger, non-integrating suppliers experience a drop in revenues and the number of customers, as well as a reduction in the probability of selling to the vertically integrating firms. Furthermore, we show that the probability of acquiring new customers and the overall profitability of non-integrating firms decrease post-merger. Importantly, these effects are observed not only among rival suppliers but also among other non-integrating suppliers. This suggests that vertical mergers can trigger substantial restructuring within firm-to-firm networks. We also provide evidence that merging firms experience higher revenue productivity and margins post-merger, while their customers seem to lose from vertical integration.

Work in progress

Estimating Productivity Gains from Vertical Mergers, with Scott Orr

Responses to Nutrition Fact Label Changes with Simon Martin, Emmanuel Paroissien and Johannes Kandelhardt

Corporate Taxation, Investment, Quality, and Productivity, with Alexandra Gibbon and Andreas Lichter