Research

Technology, Licensing and Multinational Production  (JMP) [CESifo Working Paper No. 13089] 

[Best Young Economist Award of the RoWE 2025] [Distinguished CESifo Affiliate Award 2026]

Abstract: How flexible are multinational production networks when assembly technologies are specialized and costly to reconfigure? Using data on the global automotive industry from 2000-2023, I document that production is organized around discrete process technologies (platforms) that constrain where each product can be assembled. Exploiting the 2011 Tohoku earthquake as a quasi-natural experiment, I show that platform compatibility limits firms' ability to reallocate production after local shocks. Firms overcome this constraint by licensing technologies to each other. I develop and estimate a structural model of multinational production with discrete technology choice and inter-firm licensing. Models abstracting from production technologies overstate the reallocation induced by tariffs and understate the price incidence borne by the tariffing country's consumers. The model also allows to study policies restricting access to technologies: these can trigger more reallocation than a broad tariff war, with costs concentrated on the firms and locations bound by the affected technologies.

The U.S.-China Trade War and the Geography of Global Production, with Harald Fadinger, Lei Li & Jan Schymik

[CEPR Discussion Paper No. 21855] [CESifo Working Paper No. 12942] [VoxEU column] 

Abstract:  We study how the U.S.-China trade war affected manufacturing activity in third countries using a novel plant-level dataset covering millions of establishments in 50 major economies, including affiliates of more than 200,000 multinational enterprises (MNEs). Combining establishment-level data with detailed tariff information, we estimate the effects of U.S. and Chinese punitive bilateral output and input tariffs on sales, employment, and establishments across countries, industries, and stages of production. We find that third-country effects of the trade war are highly heterogeneous and largely offsetting, yielding moderately negative net effects overall. Most of the adjustment is driven by multinational enterprises reallocating activity across affiliate networks, while domestic firms respond much less.

Floods and the Duplication of Production: Evidence from the Global Car Industry, with Thierry Mayer and Michele Fioretti (draft upon request)

Abstract:  Floods are becoming more frequent and can disrupt global supply chains. We study how multinational car makers adapt vehicle and key parts production to flood risk, and how their choices interact with insurance and public flood defences. Using plant-level data and a manually verified flood record in a staggered difference-in-differences design, we find that rather than reallocating production away from flooded plants they duplicate it. Even more than five years after a flood, an engine is 19 percentage points more likely to be made in two or more plants, usually abroad and for cars assembled nearby, while the flooded plant's output shows no persistent decline beyond a temporary loss in the flood year. Firms duplicate only where adjustment costs are low, i.e. when they already make the same engine family in the added plant. Flooded vehicle model versions are duplicated only temporarily, and transmission programs are not duplicated. Suggestive evidence that firms duplicate more where insurance is likely expensive and plants lack flood defences points to substitution between redundancy, insurance and public protection.