Abstract I find that exposed firms address heat challenges by shifting toward more capital-intensive production functions, increasing capital expenditures and R&D expenses, acquiring robotics-related human capital, and developing automation-related technologies. These effects are concentrated among firms facing large long-run temperature increases and among financially unconstrained firms. I further show that reduced labor efficiency relative to capital is one important mechanism underlying capital deepening and related automation investments. Finally, these capital responses mitigate heat-induced productivity losses, and investors appear to value firms’ adaptation capacity.
Abstract This article investigates the impact of open banking on the dynamics of fintech firms. Using a unique data set of Spanish fintech firms from 2014 to 2022, we exploit differential exposure to Europe’s open banking regulation between payment-focused fintech firms and other fintech firms. Following the regulation, payment-service fintechs exhibit improved performance and a restructuring of their funding, characterized by reduced reliance on long-term bank debt and increased use of market-based equity. These firms also increase liquidity, reduce labor intensity, raise labor costs, and enhance productivity. These findings provide novel firm-level evidence on the effects of data-sharing regulation in financial markets.
Abstract This article examines how place-based tax incentives impact local private investments and entrepreneurship by studying the U.S. Opportunity Zone program targeting economically disadvantaged neighborhoods. Using a difference-in-differences approach across census tracts, I find that while the policy increases investment deals in treated areas by 10.5%, it leads to a 1.8% decline in business formation, particularly in the non-tradable sector where firms compete locally. Opportunity Zone investors prefer older, established firms, which in turn discourages business formation. Furthermore, the decline in entrepreneurship is associated with a 1.7% reduction in local employment and decreased market competition, suggesting negative real economic impact.
