Research
Publications:
The Labor Market Effects of Loan Guarantee Programs, with Jean-Noël Barrot, Julien Sauvagnat and Boris Vallée,
Review of Financial Studies, Vol. 37, No. 8 (2024), 2315–2354, Lead Article & Editor's Choice
[published version] [working paper]
Selected Presentations: 2019 NBER Corporate Finance Meetings, 2021 SFS Cavalcade North America, 2021 WFA Annual Meetings, 2021 EFA Annual Meetings, 2022 FIRS
We investigate the labor market effects of a loan guarantee program targeting French SMEs during the financial crisis. Exploiting differences in regional treatment intensity in a border discontinuity design, we uncover a central trade-off for such interventions. While the program has a positive impact on workers’ employment and earnings trajectories that translates into positive aggregate employment effects, it dampens the worker reallocation toward more productive firms that happens following recessions, and particularly so for high-skill workers. This labor allocation effect is economically significant and translates into a reduction in aggregate productivity.
The Downstream Impact of Upstream Tariffs: Evidence from Investment Decisions in Supply Chains, with Clemens Otto
Journal of Financial and Quantitative Analysis, forthcoming
[published version] [working paper]
Best Paper Award 15th Paris December Finance Meeting 2017
Selected Presentations: 2018 WFA Annual Meetings, 2020 SFS Cavalcade North America
We study how US manufacturing firms' investment responds to tariff reductions in supplier industries. Our estimates, based on tariff reductions following multinational trade agreements, suggest that a hypothetical 10% reduction of all upstream tariffs would increase downstream investment by 4% to 6%. This estimate is not explained by decreasing uncertainty and stems from tariff reductions for homogeneous and low-R&D inputs, consistent with the investment response resulting from cost reductions rather than superior foreign technology embodied in imported inputs. Evidence from an instrumental variable estimation using the sudden increase in Chinese import penetration suggests that import competition also increases downstream investment.
Working Papers:
Real Effects of Centralized Markets: Evidence from Steel Futures, revise & resubmit at the Review of Financial Studies
Selected Presentations: 2019 AFA Annual Meetings, 2022 EFA Annual Meetings
I study the real effects of centralized derivative markets. Exploiting the staggered arrival of futures contracts for different steel products, I find that the introduction of centralized derivatives markets: i) decreases price dispersion in the product market, ii) increases the sensitivity of producers’ market shares to their production cost, and iii) decreases prices and producers’ profits. I also find that news pointing to the introduction of centralized markets decrease the stock prices of steel producers. These results are consistent with the predictions of existing theories, which point to the role of centralized futures markets in fostering product market competition.
Corporate Taxation and Carbon Emissions, with Luigi Iovino and Julien Sauvagnat
Selected Presentations: 2022 SFS Cavalcade North America, 2022 AERE Summer Conference, 2022 North American Summer Meetings of the Econometric Society
We study the relationship between corporate taxation and carbon emissions in the U.S. We show that dirty firms pay lower profit taxes. This relationship is driven by dirty firms benefiting disproportionately more from the tax shield of debt due to their higher leverage. In addition, we document that the higher leverage of dirty firms is fully accounted for by the larger share of tangible assets owned by such firms. We build a general-equilibrium multi-sector economy and show that a revenue-neutral increase in profit taxation could lead to large decreases in aggregate carbon emissions without any noticeable change in GDP.
Fiscal Constraints, Disaster Vulnerability, and Corporate Investment Decisions, with Nicola Maria Fiore and Florian Nagler
Selected Presentations: 2024 FIRS
This paper empirically studies the role of fiscal constraints for disaster vulnerability and investment decisions in a global sample of firms. We build novel firm-level measures of exposure to fiscal constraints based on the sales distributions of firms across countries. This approach allows us to exploit variation among firms headquartered in the same country and operating in the same industry. During disasters, more exposed firms become riskier, as evidenced by an increase in their market comovement, coupled with discussions on fiscal constraints risk during earnings conference calls. Pre-disaster, firms with larger exposures to fiscal constraints realize higher returns, use higher discount rates in investment decisions, and invest less in tangible capital and R&D. Our findings suggest that fiscal constraints affect long-term growth through a risk-based disaster-vulnerability channel.