Dollar Movements, Borrowing Constraints, and Firm Investment (Job Market Paper)

Abstract: 

How do firms in emerging markets respond to global financial tightening? This paper shows that their responses depend on how they borrow. When the U.S. dollar strengthens, indicating financial tightening, firms that borrow against collateral face tighter credit because the local-currency value of their assets falls. Firms that borrow against earnings are less affected, since their borrowing capacity depends on operating cash flows rather than asset valuations. Using bond issuance data from LSEG’s SDC Platinum, I classify each issue by whether repayment relies on assets or on earnings, and link these classifications to firm–quarter financial statements from Worldscope for publicly listed non-financial firms in eighteen emerging market economies between 2001 and 2019. Three facts emerge. First, when the dollar appreciates, investment declines among collateral-based borrowers but remains stable for earnings-based borrowers. Second, within the earnings-based group, the decline in investment is smaller for firms with higher export intensity. Third, new borrowing shifts toward earnings-based contracts as the dollar strengthens, showing a change in financing composition. The aggregate effect of global financial tightening therefore depends on the composition of borrowing types and the distribution of export intensity. 

Capital Controls, Risk, and Firm Performance: Cross-country Evidence from Corporate Bond Issuance 

(with Andrés Fernández Martin and Andrea Fabiani) IMF Working Paper

Abstract: 

We study how controls on capital inflows impact firms’ financing and real outcomes in emerging markets using a novel dataset that merges firm-level bond issuance and balance sheet data with granular measures of capital controls. We uncover a bond channel whereby a tightening of controls on nonresident purchases of domestically issued corporate bonds reduces the likelihood of subsequent bond issuance by about one-third of the historical average. This effect operates through two distinct channels linked to the heterogeneous impact of these policies across firms’ characteristics: a prudential channel, where riskier, more leveraged firms curtail issuance more sharply, and a productivity channel, in which more productive firms also reduce issuance. Crucially, however, only the prudential channel persists when analyzing firms’ total liabilities and investment. Riskier firms reduce total liabilities and cut back on investment, while more productive firms maintain their investment plans by substituting away from bond markets, including via reduced dividend payouts. We further examine how these dynamics vary across domestic vs. global financial cycles and across alternative measures of firm risk and productivity, and by documenting substitution margins via dividend payouts. We end with a discussion of the policy implications of our findings.

Presentations: 2026 Allied Social Science Associations (ASSA) Annual Meeting; Analytical Corner, 2025 World Bank Group/IMF Annual Meetings; Yiran Fan Memorial Conference, UChicago (2025)

Throughout my research journey, I explored several sub-fields in Economics before finalizing my research interests. Here are some of the papers I worked on: 

Linguistic Similarity and Migration: An Analysis of Language’s Role in Residential Choices

Abstract: 

This paper explores the understudied role of linguistic factors in shaping migration decisions within spatial economics. While prior work has emphasized the role of wages and amenities, I extend the analysis by isolating the effect of linguistic similarity from other bilateral frictions. I develop a structural general equilibrium model that incorporates linguistic proximity alongside wage and amenity differentials across locations. Empirically, I focus on the European Union, a linguistically diverse setting with free labor mobility. The results indicate that linguistic similarity exerts a sizable influence: a 1% increase in linguistic proximity raises the probability of migration between locations by 2.8%. From a policy perspective, this suggests that investments in language acquisition programs can substantially ease migrant assimilation. The paper bridges economics and linguistics, advancing our understanding of how non-monetary factors shape migration and spatial allocation.

TFP Dispersion and Credit Channel of Monetary Policy 

Abstract:

The transmission of monetary policy to the real economy remains a central question in macroeconomics. While the credit channel has received considerable attention, there is limited direct evidence on how monetary policy shapes the dispersion of total factor productivity (TFP) across firms. This paper examines whether contractionary monetary policy amplifies or mitigates capital misallocation in the presence of financial frictions, and how these reallocation dynamics affect aggregate TFP. Using Compustat data on U.S. firms from 1990 to 2007, I study three dimensions of financial constraints—firm size and age, leverage, and liquidity. The results indicate that young and small firms experience a relative decline in productivity following contractionary shocks, narrowing the dispersion of TFP across firms. This suggests that monetary tightening may reduce misallocation by disproportionately affecting previously more productive, financially constrained firms.

Political Regimes and Economic Inequality in India: A State Level Analysis

with Sohini Sahu, and Amey Sapre

Abstract: 

In this paper we study the changes in economic inequality during different political regimes in 14 major states in India from 1991-2005. Political regimes are often characterized by government's polices and intent on state specific features. To explore this we construct a state level history of political regimes and state expenditures to analyze the impact on levels of economic inequality. We find that large redistributive spending, higher winning seats percentage, regime switches and state's preference for its own welfare schemes worked towards reducing inequality. We argue that despite using aggregate levels of expenditure and a limited political history, the results suggest the importance of political regimes and redistributive spending.

Presentation: SURGE poster presentation (2015), IIT Kanpur