Working Papers

The Local Innovation Spillovers of Listed Firms
R&R Journal of Financial Economics
This paper provides causal evidence of local innovation spillovers, i.e. innovation by one firm fostering innovation by neighboring firms. First, I document that exogenous shocks to innovation by listed firms affect innovation by private firms in the same geographical area. I also find that such local innovation spillovers decline rapidly with distance. Second, I find that local innovation spillovers stem at least in part from knowledge diffusing locally through two channels: learning across local firms and inventors moving from their employer to both existing firms and newly started spin-outs. Finally, I study the two-way relationship between innovation spillovers and the availability of capital. I find that local innovation spillovers lead venture capital funds from outside the area to invest more in the local area, and that conversely capital availability amplifies local innovation spillovers.

Higher Dividend Taxes, No Problem! Evidence from Taxing Entrepreneurs in France, joint with Charles Boissel
This paper investigates how the large increase in dividend tax rate in France in 2013 affected firms' performance and corporate investment. Using administrative data covering the universe of firms for the period 2008--2016 and a quasi-experimental setting, we find that firms swiftly cut dividend payments. Firms use this tax-induced increase in liquidity to invest more, particularly so when facing high demand. For every additional euro of undistributed dividends, firms increase their investment by 0.2 euro, leading to higher sales growth. Heterogeneity analysis fails to find any group of firms having to cut their investment, thereby clearly rejecting models in which dividend tax reforms affect the cost of capital. Overall, our results suggest that entrepreneurs are credit constraints in equilibrium, despite paying dividends and do not hold enough liquidity to seize investment opportunities when they arise randomly in the economy.

Misallocation and Capital Market Integration: Evidence from India, joint with Natalie Bau
We show that foreign capital liberalization reduces capital misallocation and increases aggregate productivity in India. The staggered liberalization of access to foreign capital across disaggregated industries allows us to identify changes in firms' input wedges, overcoming major challenges in the measurement of the effects of changing misallocation. For domestic firms with initially high marginal revenue products of capital (MRPK), liberalization increased revenues by 19%, physical capital by 59%, wage bills by 29%, and reduced MPRK by 41% relative to low MRPK rms. There were no effects on low MRPK firms. The effects of liberalization are largest in areas with less developed local banking sectors, indicating that the reform may substitute for an  efficient banking sector. Finally, we develop a method to use natural experiments to estimate the lower bound effect of changes
in misallocation on manufacturing productivity. The liberalization episode increased manufacturing's Solow residual by at least 5.5%.
Vox Dev Column ; VoxEU
Media Coverage: Ideas for India

Where Has All the Big Data Gone?, joint with Maryam Farboodi, Laura Veldkamp and Venky Venkateswaran
R&R RFS
As financial technology improves and data become more abundant, do market prices reflect this growing information and allocate capital more efficiently? While a number of recent studies have documented rises in aggregate price efficiency, we show that there are large cross-sectional differences. The previously-documented increases are driven by a rise in the informativeness of large, growth stocks. The informational efficiency of smaller assets' prices or prices of asset with less growth potential are either flat or declining. We document these new facts and use a structural model to decompose changes in price informativeness into the effects of changes in information and in growth or volatility characteristics of the assets. Finally, by computing the initial value of data implied by our structural model, we show that these findings could be explained partly by the fact that large firms have grown relatively larger. Since growth magnifies the effect of changes in size, processing data about large-growth firms has becoming more and more valuable, relative to other firms.

Private Credit Under Political Influence: Evidence from France, joint with Anne Laure Delatte and Noémie Pinardon Touati
Formally independent private banks change their supply of credit to the corporate sector for the constituencies of contested political incumbents in order to improve their reelection prospects. In return, politicians grant such banks access to the profitable market for loans to local public entities among their constituencies. We examine French credit registry data for 2007--2017 and find that credit granted to the private sector increases by 9%-14% in the year during which a powerful incumbent faces a contested election. In line with politicians returning the favor, banks that grant more credit to private firms in election years gain market share in the local public entity debt market after the election is held. Thus we establish that, if politicians can control the allocation of rents, then formal independence does not ensure the private sector's effective independence from politically motivated distortions.
Media coverage: Le Monde, France Culture, Liberation, Alternatives Economiques ; Les Echos

Technology Boom, Labor Reallocation, and Human Capital Depreciation, joint with Johan Hombert
During the late 1990s boom, one-third of skilled labor market entrants joined the Information and Communication Technology (ICT) sector. We use French linked employer-employee data to study their wage dynamics. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started in other sectors. The long-run wage discount is not explained by selection, job losses or persistently low demand for ICT services. It is concentrated in STEM occupations, consistent with obsolescence of technical skills accelerating during a technological boom.
Media coverage: Voxeu, Frankfurter Allgemeine Zeitung

Bank Deposits and Redistributive Effects of Monetary Policy, joint with Anne Duquerroy and Farzad Saidi
This paper documents that accommodative monetary policy can have contractionary effects on a large part of the real economy if it does not translate to lower funding cost for banks. For identification, we exploit the existence of regulated-deposit accounts offered to households in France the rate on which is not a direct function of the monetary-policy rate but, instead, guaranteed and set by the government. This introduces a funding-cost gap among deposit-funded banks. Using administrative credit-registry data, covering the universe of loans in France, we find that when regulated-deposit dependent banks face higher funding cost following monetary-policy changes, they contract their lending to large firms, but engage in greater risk taking by shielding small firms and entrepreneurs. We argue that this impairment of the transmission of monetary policy to deposit rates has redistributive effects by favoring more constrained borrowers especially in areas that are on weaker growth paths.

Work in Progress


Firms' Market Power and The Pattern of Trade, joint with Johan Hombert and Paul Beaumont

Acquisitions, Labor Reallocation and Productivity, joint with Paul Beaumont, Camille Hebert and Victor Lyonnet

"Monetary Policy, Deposits, and the Redistribution of Wealth", joint with Anne Duquerroy and Farzad Saidi

"Redistribution Effect of Negative Interest Rate: Evidence from Brazil", joint with Farzad Saidi and Daniel Streitz