New importers increase their conditional survival rate and import share over time. However, a model of multi-input firms with an import entry cost and stochastic import costs cannot replicate these dynamics. I show that an extended model can be reconciled with the data. I calibrate both models and use them to identify the effects of trade shocks. The simulations show that a decrease in import prices with the new importer dynamics generates lower productivity gains, but these gains are more widespread across firms.
We study the product-level effects of Preferential Trade Agreements (PTAs) on the implementation of non-tariff measures (NTMs) using a global database spanning the 2000-2017 period. Employing an instrumental variable strategy, we provide evidence that an increase in the import share of PTA partners leads to a reduction in the application of NTMs. Exploring several mechanisms, we find that these effects are driven by products with higher preferential margins, the gap between MFN and preferential tariff rates. This result is consistent with what we call a “rent preservation effect,” whereby PTA partner countries push to limit the imposition of NTMs in order to preserve their preferential rents. We find that the negative PTA-NTM nexus is stronger for deeper PTAs, technical NTMs, and advanced economies. But there is no evidence that the effects are confined to NTMs that target broader or narrower sets of countries, agricultural products, or products that are subject to more NTMs. Importantly, higher PTA import shares contribute to multilateral liberalization by lowering both the usage of NTMs against PTA members and non-PTA partners.
This paper studies how financial development affects business cycles through entrepreneurial composition. Using Argentine microdata, I show that self-employed entrepreneurs are concentrated below the median of the income distribution and have countercyclical population shares, while employer entrepreneurs are concentrated above the median and have procyclical shares. Motivated by these patterns, I develop a dynamic occupational choice model with aggregate risk in which endogenous sorting across occupations shapes macroeconomic fluctuations. In the calibrated model, financial development raises aggregate output volatility by 8 percent because relaxing collateral constraints shifts economic activity toward employer entrepreneurs, who are more sensitive to aggregate shocks. These findings show that while financial development raises long-run output, it may also increase short-run instability.
This paper considers equilibrium trade in a real estate market. When search is directed, buyers have private independent values, and sellers compete on asking prices, stock-flow matching characterises equilibrium outcomes. Consistent with the data, equilibrium not only generates large and variable price spikes for new listing sales; unsuccessful sellers lower their asking prices over time; and there is equilibrium asking price dispersion. Bidding war data demonstrate that the match surplus is substantial: a lower bound equals 3.3% of house price, whereas ballpark examples suggest match surplus is around 10%.
The attention on multi-product firms has focused primarily on firms’ product scope, i.e., how many products firms sell, rather than on which products they co-produce and sell. We address this by developing a stochastic heterogeneous-firm model that allows for correlations in production efficiencies across products and in consumers’ tastes across products and destinations. Our estimation strategy centers on a novel extension of generalized score matching. We use Chinese export data for the leather sector. The estimates reveal a clustered co-exportation structure consistent with correlated efficiency shocks across products sharing similar production processes.
This paper provides a direct replication of Fehr et al. (2022), who examine whether information about individuals’ position in the global income distribution affects preferences over global inequality. Whereas the original study draws on a representative sample from Germany, we analyze a broadly representative UK sample (N=2116). UK respondents underestimate their global rank by about 2.4 deciles on average, yet randomly providing accurate rank information has no detectable effect on real-stakes donations to international anti-poverty NGOs or on policy attitudes toward global redistribution, international organizations, globalization, or immigration. The estimated average treatment effects are small, close to zero, and precisely estimated. A data-driven heterogeneity analysis reveals no sizable or systematic differences in subgroup responses. Overall, the results reinforce the evidence that correcting global income misperceptions alone is unlikely to shift preferences over global inequality in the European settings studied so far.
We study how racial hate crimes influence immigrants' social identity and sense of belonging to the host country. We focus on the 2008 "San Gennaro massacre", an attack by a Camorra clan against African immigrants in Southern Italy. Using a difference-in-differences (DiD) approach, we show that the event increased the sense of belonging to Italy among Africans living in the affected area, driven by both a "fear effect" and a "solidarity effect". We further document that this shift in social identification spread to other African immigrant communities, particularly those residing in municipalities characterized by a strong presence of organized crime and by a strong local public reaction of solidarity. Finally, we find that this increase in identification with Italy is persistent over time and is not associated with a weakening of ethnic identity.
We study age-income gaps across 32 countries over 2004-2018 using harmonized microdata from the Luxembourg Income Study. We document a striking divergence: the ratio of disposable income of late-career workers (aged 55-64) relative to early-career workers (aged 25-34), which we name the Age Group Income Ratio (AGIR), rose by 18 percentage points in rich countries but fell by 8 percentage points in poor economies. This divergence operates primarily through the employment margin, which accounts for two-thirds of rising AGIR in rich countries and that conventional age-earnings measures miss entirely. To explain these patterns, we develop an overlapping generations model that discriminates among six competing mechanisms. In rich countries, skill congestion-late-career cohorts catching up with early-career workers in educational attainment and crowding them out of skilled labour markets-is the dominant driver of both margins. In poor countries, productivity growth dominates and skill congestion reduces rather than raises income inequality, as the young are expanding their college attainment more rapidly than the old.
An understanding of the growth of surgical robotic technology is not only a contribution to the academic literature on the proliferation of new technology, but also it is a precursor to effective U.S. public policies toward this burgeoning new technology and possibly toward potential future standard-setting dimensions of an emerging ecosystem. Using patent application information from filings with the U.S. Patent and Trademark Office, we characterize the growth of this technology in terms of a traditional S-curve model. We also hypothesize a theory of the distribution of surgical robotic technology, and we test our theory empirically.
Many high-stakes organisational decisions are made by committees, where members exert costly influence to shape a single collective outcome. When committees are gender-imbalanced, the salience of gender identity may affect who mobilises influence and how numerical power translates into effective decision weight. We study how gender-identity salience interacts with numerical power in a controlled laboratory setting using a group-contest design. We vary the numerical balance of power (Female-Majority vs. Male-Majority) and manipulate whether gender composition is revealed. We find larger, advantaged groups invest significantly more and identity salience has asymmetric effects by gender. Among minority men facing female-majority groups, making gender salient increases investment and their initial disadvantage shrinks over time. Among minority women facing male-majority groups, investment does not increase and their relative disadvantage grows over time. These divergent responses are not explained by general social preferences or in-group cohesion. The findings suggest highlighting gender identity may intensify mobilisation by minority men without similarly empowering minority women, with implications for the design of diversity and transparency policies.
We examine the role of state-dependent distribution frictions in the transmission of monetary policy shocks in a dynamic multi-sector general equilibrium model. Our benchmark model predicts a counter-cyclical distribution margin, which is consistent with micro price evidence. We then estimate an augmented model with price and wage rigidities and attribute the lion’s share of this countercyclicality to service-sector productivity shocks. By allowing for distribution frictions to depend on the state of the economy, which substantially alters monetary transmission, we find that state dependence weakens the real effects of monetary policy by dampening the consumption response to monetary shocks. In stark contrast, such a result cannot be replicated when distribution frictions are time-invariant. Our findings highlight a novel channel through which the interplay between sectoral productivity and distribution frictions jointly influences monetary policy transmission.
Facilitated giving, a common yet under-researched form of cause-related marketing (CRM), involves companies collecting donations from customers to support charitable causes. This study examines the impact of facilitated giving on revenue from ticket sales at an opera house through two large-scale field experiments involving over 50,000 customers. The charitable initiative supported a social youth project aimed at enhancing cultural education and social integration for individuals from disadvantaged households. We found that a particularly pervasive donation ask led to a significant short-term reduction in ticket purchases by non-donors. However, this adverse effect was short-lived and we did not find any effect of the program on total revenue from tickets and donations, neither in the short run nor in the long run.
Contractions in credit supply can lead firms to reduce their level of employment, yet little is known about how these shocks affect the composition of firms’ employees and outcomes at the worker level. This paper investigates how bank distress affects credit provision and its effects on employment beyond firm-level aggregates. To do so, we use a novel dataset built from administrative and tax records linking all banks, firms, and workers in Denmark. We show that banks that were particularly exposed to the 2008–09 financial crisis cut lending to firms, and firms were unable to fully compensate with financing from alternate sources. The decrease in credit supply led to a drop in firm-level employment, with effects concentrated among firms with low pre-crisis liquidity, and on employment of low-educated and non-managerial workers. At the worker level, we find that increases in the incidence of unemployment were driven by effects on low-educated, non-managerial, short-tenured, and low-earning workers.
