Publications
Review of Financial Studies, Forthcoming Working Papers
R&R Journal of Finance
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.
Unemployment Insurance, Strategic Unemployment and Firm-Worker Collusion (with Bernardus van Doornik and David Schoenherr)
Abstract: Exploiting a discontinuous effect of an unemployment insurance (UI) reform in Brazil, this paper documents layoff and rehiring patterns consistent with collusion between firms and workers to extract rents from the UI system. Firms and workers time formal unemployment spells to coincide 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 of hiring replacement workers when laying off workers eligible for UI benefits, this suggests that firms continue employing workers informally while they are on benefits. Firms benefit from collusion through lower equilibrium wages.
Abstract: Using natural disasters as shocks to local economies, we document that a bank branch’s ability to set deposit rates locally has real effects. Following disasters, branches that set rates locally increase deposit rates more and experience higher deposit volumes in affected counties. Consistent with imperfect insurance from internal capital markets, banks with more branches setting rates locally expand mortgage lending relatively more in affected counties. House prices recover faster in MSAs that have more branches setting rates locally. Our results are robust to instrumenting for the location of deposit rate-setting authority using bank mergers.
Work in Progress
Unemployment Insurance as a Subsidy to Risky Firms (with Bernardus van Doornik, Dimas Fazio, and David Schoenherr) Acces to Credit and Labor Market Outcomes -- Evidence from Credit Lotteries (with Bernardus van Doornik, Armando Gomes, and David Schoenherr) Court Efficiency and the Propagation of Shocks (with Dimas Fazio, Thiago Silva) Organizational Design of Risk Management (with Rajesh Chandy, Ahmed Tahoun, and Vikrant Vig)
Experience of Communal Conflicts and Inter-group Lending (with Ray Fisman, Arkodipta Sarkar, and Vikrant Vig)
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