Lior Shabtai
I am a PhD candidate in Finance at the Kellogg School of Management, Northwestern University. I work on corporate finance, innovation, climate finance, and labor. I study how firms allocate innovative resources across projects and technologies in response to private and policy incentives, and the implications for innovation quality, productivity, and welfare.
I am on the 2026–27 academic job market.
Working Papers
Generalist Inventors and Induced Innovation
with Yudan Ying
Draft coming soon
Presentations: Kellogg Finance Brownbag (2025, 2026), Kellogg Strategy Brownbag (2026)
The Unintended Consequences of Carbon Markets [SSRN link]
Presentations: CEPR Climate Change and the Environment Symposium (CCES) 2026, BI/NBER/NYU Climate and Nature Finance (2026, poster), MFA (2026), Kellogg Finance Brownbag (2024, 2025)
This paper shows that carbon markets inadvertently weaken incentives for green innovation in hard-to-abate industries by allowing firms to rely on purchasing emission allowances rather than independently decarbonizing. A triple-difference analysis of the European Union Emissions Trading System (EU-ETS) finds that the rise in green patenting is concentrated among easy-to-abate firms, with no comparable increase among hard-to-abate firms. A directed technical change model of a carbon market with sectoral differences in abatement costs shows that carbon markets inefficiently direct most innovation efforts toward decarbonizing the easy-to-abate sector. Socially optimal sector-specific research subsidies redirect innovation to support a clean transition in the hard-to-abate sector and increase welfare by 3.8% in consumption-equivalent terms. These subsidies need to be nearly three times as large (in present value) as those provided to innovators in the easy-to-abate sector.
Work in Progress
The Decline of Productivity Enhancing R&D
with Efraim Benmelech
Unfinished Business: The Long Ascent of Women into Corporate Leadership
with Richard B. Baker, Carola Frydman, Grant Goehring and Eric Hilt
Teaching Experience
Kellogg School of Management, Northwestern University
Managerial Finance I and II (Executive MBA), 2023 – 2026
Teaching evaluations: median 6/6; average 5.61/6.
Hebrew University of Jerusalem
Introductory Microeconomics and Macroeconomics (Economics, Undergraduate), 2018 – 2020