Welcome
I am a Post-Doctoral Fellow in Economics at the University of Mannheim, funded by the
Collaborative Research Center TR 224
"Economic Perspectives on Societal Challenges - Equality of Opportunity, Market Regulation, and Financial Stability"
of the German Science Foundation (DFG).
My research focuses broadly on international economics and organizational economics.
I am particularly interested in studying how firm behavior shapes economic performance.
News
DER SPIEGEL writes an
article
about my research on The Costs and Benefits of Home Office during the Covid-19 Pandemic, joint with Harald Fadinger.
I co-organized a workshop on Trade Policy and Firm Performance in the Global Economy on 13-14 June 2019 jointly with Harald Fadinger and Yanping Liu, sponsored by the Collaborative Research Center TR 224.
See here for the program.
Working Papers
My Home is My Castle - The Benefits of Working from Home During a Pandemic Crisis: Evidence from Germany
with Jean-Victor Alipour and Harald Fadinger
[Abstract],
Abstract: This paper studies the relation between work and public health during the COVID-19 pandemic in Germany. Combining
administrative data on SARS-CoV-2 infections and short-time work registrations, firm- and worker-level surveys and cell
phone tracking data on mobility patterns, we find that working from home (WFH) is very effective in economic and public
health terms. WFH effectively shields workers from short-term work, firms from COVID-19 distress and substantially reduces
infection risks. Counties whose occupation structure allows for a larger fraction of work to be done from home experienced
(i) much fewer short-time work registrations and (ii) less SARS-CoV-2 cases. Health benefits of WFH appeared mostly in the
early stage of the pandemic and became smaller once tight confinement rules were implemented. Before confinement, mobility
levels were lower in counties with more WFH jobs and counties experienced a convergence in traffic levels once confinement
was in place.
Human Capitalists and the Global Division of Labor
[Abstract]
Awarded the FIW International Economics Conference Best Paper Award 2019, Vienna
and the Walther-Rathenau Best Paper Award [Link]
Abstract: Many corporate top earners are compensated with equity claims on firms' profits. This paper investigates the consequences of
trade-induced economic reallocation on the compensation structure of top earners. I introduce managerial equity ownership into a
model of heterogeneous firms to show that reallocation of economic activity towards large, import intensive firms raises the prevalence
of equity ownership within these firms. Calibrating the model suggests that equity ownership responds more elastically to globalization
than labor incomes such that focusing on the income skill premium fundamentally underestimates the returns to globalization for top
earners. I then combine data on equity ownership and income streams for British and U.S. top managers with international I-O tables and
firm level data to study this relation empirically. Using a shift-share instrumentation strategy, I find that improved access to global
input markets raises the value of equity ownership for managers of large and importing firms altering the compensation structure towards
lower labor income shares. This suggests that intra-industry reallocation can raise top inequality and the prevalence of capital incomes
for top earners.
Publications
The Costs and Benefits of Home Office during the Covid-19 Pandemic - Evidence from Infections and an Input-Output Model for Germany
with Harald Fadinger
[Abstract],
[Media Coverage]
C.E.P.R. Covid Economics, forthcoming.
Abstract: We study the impact of working from home on (i) infection risk in German regions and (ii) output using an input-output (IO) model
of the German economy. We find that working from home is very effective in reducing infection risk: regions whose industry structure
allows for a larger fraction of work to be done from home experienced much fewer Covid-19 cases and fatalities. Moreover, confinement
is significantly more costly in terms of induced output loss in regions where the share of workers who can work from home is lower.
When phasing out confinement, home office should be maintained as long as possible, to allow those workers who cannot work from home
to go back to work, while keeping infection risk minimal. Finally, systemic industries (with high multipliers and/or high value added
per worker) should be given priority, especially those where home office is not possible.
Foreign Competition and the Durability of U.S. Firm Investments
with Philippe Fromenteau and Jan Tscheke
[Abstract],
[Media Coverage],
[Working Paper Version]
RAND Journal of Economics, Vol. 50(3), p. 532-567, Fall 2019
Abstract: How does the exposure to product market competition affect the investment horizon of firms? When tougher competition reduces future profitability,
firms have an incentive to shift investments towards more short-term assets. To study this mechanism empirically, we formulate a stylized theoretical framework of
firm investments and derive a within-firm estimator that uses variation across investments with different durabilities. We exploit the Chinese WTO accession as a
competition shock for US firms to estimate the effects of product market competition on the composition of firm investments using expenditures across different assets
within listed US manufacturing companies. We find that firms that experienced tougher competition shifted their expenditures towards investments with a shorter
durability. We find this effect to be larger for firms with lower total factor productivity.
Trade in Tasks and the Organization of Firms
with Dalia Marin and Alexander Tarasov
[Abstract],
[Data and Code],
[Media Coverage],
[Working Paper Version]
European Economic Review, Vol. 107, p. 99-132, Aug. 2018
Abstract: In this paper, we incorporate trade in tasks into Marin and Verdier (2012) to examine how offshoring affects the way firms organize. We show that offshoring of production tasks
and of managerial tasks can lead to more decentralized management and to larger executive wages in open economies. We study the predictions of the model with original firm level data and
find that offshoring firms are 18% more decentralized than non-offshoring firms. We also find that offshoring of managers increases the level of decentralized management in open
industries, but reduces the level of decentralized management in sufficiently closed industries.
Globalization and the Evolution of Corporate Governance
[Abstract], [Data and Code]
[Media Coverage], [Working Paper Version]
European Economic Review, Vol. 102, p. 39-61, Feb. 2018.
Abstract: How does globalization affect the balance of power between managers and firm owners? This paper studies the effect of economic integration on governance
practices within firms. I propose a theory of endogenous corporate governance investments in industry equilibrium with monopolistic competition. Firms can use investments
into better corporate governance as a cheap substitute to performance compensation to mitigate agency problems. International integration alters the demand for managers
in the economy such that firms may reduce their corporate governance investments and offer higher performance payments. This globalization-induced deterioration of
corporate governance in the economy diminishes the welfare gains from globalization. Using data on governance practices in U.S. manufacturing corporations, I provide
empirical evidence that conforms to the model predictions. Firms in industries that experienced substantial trade liberalization between 1990 and 2006 have changed their
governance practices allowing for more managerial slack and offered higher equity payments to their CEOs. These effects are particularly large in relatively dynamic
industries that are characterized by large exit rates.
Democratization, Contracts and Comparative Advantage
with Felix Samy Soliman
[Abstract], [Working Paper Version]
Economics Letters, Vol. 173, p. 73-77, Dec. 2018.
Abstract: We study how the international spread of democracy shaped the comparative advantage of countries. Using data on the "Third Wave of Democratization"
between 1976 and 2000 we find that democratizing countries shifted their exports towards more contract intensive goods that require a larger portion of
relationship-specific inputs. This shift is observed on the intensive margin (volumes of industry-level exports) as well as the extensive margin of
trade (number of goods a country exports). Using an instrumental variable strategy based on democracy waves, alternative proxy variables and
subsamples suggests that the effects of democratization on trade specialization are causal.
Work in Progress
Trade Adjustment and Competition in the Eurozone
with Harald Fadinger
Capital (Mis)Allocation and Managers
with Alex Schramm and Alex Schwemmer
[Abstract], [Slides]
Abstract: We study how firm investment policies and the allocation of capital are shaped by managerial incentives. To study the empirical
relation between managerial incentives and investment policies, we exploit the introduction of an accounting reform in the US that effectively
shortened the horizon of managerial incentives for some firms (FAS 123R). Using a within-firm estimator based on variation across investments
with different durabilities, we find evidence that firms with more short-term incentives systematically shift their expenditures towards
investments with a shorter durability and lower the durability of firms' capital stock. We then present a dynamic model of firm investments in
which the firm's investment policy is distorted by managerial incentives. We show that equity-based compensation contracts can induce managers
to make investment decisions corresponding to quasi-hyperbolic time preferences such that there is systematic overinvestment in assets with shorter
durability and underinvestment in assets with longer durability. We quantify the model to match observations on public US firms and aggregate
data moments and find that small deviations from value-maximizing incentives lead to sizable distortions of aggregate output and investment.
