Research Interests

Organizational Economics, Banking, Financial Intermediation, Labor Economics, Emerging Markets

Working Papers

EFMA Best PhD Paper Award, MFA Outstanding Paper Award

Abstract: How do lenders improve contract enforcement when institutions are weak? To increase pledgeability of farmers' output, a large agribusiness lender in Brazil constructs grain storage silos. Once deposited in the warehouse, grain can be seized by the lender. Warehouse access also permits a new credit contract, repayable in grain. This contract transfers the ownership of grain to the lender, restraining the borrower from diverting the proceeds. The improved collateralization increases debt capacity and lowers interest rates. The effects are stronger for municipalities with weaker courts and financially-constrained borrowers. Results resonate with credit by commodity traders to producers and custodian lending.

R&R Review of Financial Studies (2nd round)

AbstractAbstract We exploit a variation in organizational hierarchy induced by a reorganization plan implemented in roughly 2,000 bank branches in India, to investigate how organizational hierarchy affects the allocation of credit. We find that increased hierarchization of a branch induces credit rationing, reduces the performance on loans, and generates standardization in loan contracts. Additionally, we find that hierarchical structures perform better in environments characterized by a high degree of corruption, highlighting the benefits of hierarchies in restraining rent-seeking activities. Overall, our results are consistent with the view that valuable information may be lost in hierarchical structures.

Abstract: Exploiting a discontinuous effect of an unexpected unemployment insurance (UI) reform in Brazil, we document layoff and rehiring patterns consistent with collusion between firms and workers. Firms and workers time formal unemployment spells with workers' eligibility for UI benefits. These patterns are mostly driven by industries and municipalities with large informal labor markets. Combined with a lower probability to hire replacement workers following the layoff of workers eligible for UI benefits, this suggests that firms continue employing workers informally while they are on benefits. Firms seem to benefit from collusion through paying lower equilibrium wages. 

Work in Progress

Organizational Design of Risk Management (with Rajesh Chandy, Ahmed Tahoun, and Vikrant Vig)

Vertical Integration and Input Specificity (with Dimas Fazio and Thiago Silva)

Firm Risk and Firm-Worker Selection (with Bernardus van Doornik and David Schoenherr)

Propagation of Shocks and Network Fragility (with Dimas Fazio and Thiago Silva)