Research

Working Papers:

Real Effects of Price Transparency: Evidence from Steel Futures

[2019 AFA Annual Meetings]

I study the effects of price transparency by leveraging the introduction of steel futures markets in a difference-in-differences setting. In line with recent theory, producer profit margins, customer material costs, and input cost dispersion within customer industries decrease. Further, the market share of low-cost producers increases. Overall, price transparency appears to foster competition and improve resource allocation, and represents an important real effect of financial markets.

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The Downstream Impact of Upstream Tariffs: Evidence from Investment Decisions in Supply Chains , with Clemens Otto

[Best Paper Award 15th Paris December Finance Meeting 2017]

[2018 WFA Annual Meetings]

Using data on import tariffs and investment in U.S. manufacturing industries between 1974 and 2012, we show that upstream tariff reductions are followed by increased downstream investment. We test different possible explanations. The results are most consistent with tariff reductions improving downstream customers' incentives to invest by mitigating the risk of ex post hold-up from upstream suppliers. In particular, we find that the investment response is stronger if the customers have little bargaining power and are not vertically integrated with their suppliers, if the suppliers produce specific inputs, and if high uncertainty inhibits the use of long-term contracts.

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Employment Effects of Alleviating Financing Frictions: Worker-level Evidence from a Loan Guarantee Program, with Jean-Noël Barrot, Julien Sauvagnat and Boris Vallée

We document the impact on worker employment trajectories of a countercyclical loan guarantee program aiming at mitigating financing frictions for SMEs. Our identification strategy exploits plausibly exogenous heterogeneity in policy generosity between French regions, interacted with a geographical regression discontinuity design. We show that the guarantees result in a significantly higher likelihood of being employed over the seven years following the intervention, which translates into significantly higher cumulated earnings. The program benefits disproportionately high wage, male and younger workers, due to both differences in retention decisions by the initial employer and differences in labor market frictions for these populations. We estimate the gross cost to preserve a job(-year) to be around €3,200, and a negative net cost when we include the savings on unemployment benefits.

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Managerial Ownership Changes and Mutual Fund Performance, with Florian Sonnenburg

We study the dynamics of fund manager ownership for a sample of U.S. equity mutual funds from 2005 to 2011. We find that ownership changes positively predict changes in future risk-adjusted fund performance. A one-standard deviation increase in ownership predicts a 1.6 percent increase in alpha in the following year. Fund managers who are required to increase their ownership by fund family policy show the strongest increase in alpha. They do so by increasing their trading activity in line with the view that higher ownership aligns interests of managers with those of shareholders and induces higher effort.

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Work in Progress:

Why Do Non-Financial Firms offer Financial Services? Evidence from Car Dealerships

Sectoral Bubbles, Misallocation and Productivity: Evidence from Metropolitan Statistical Areas