Research

Research Interests

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

Publications

Review of Financial Studies (Forthcoming)
    (with Vikrant Vig

Working Papers

    (with Ray Fisman, Arkodipta Sarkar, and Vikrant Vig)


R&R Journal of Finance

EFMA Best PhD Paper Award, MFA Outstanding Paper Award

Abstract: This paper documents a financial innovation, mitigating credit and hedging frictions through warehouse ownership. A large agribusiness lender in Brazil constructs grain warehouses, to permit a new credit contract, repayable in grain. This contract provides price insurance and possesses stronger credit enforcement rights. For identification, I use runner-up locations of warehouses as a control group. The improved contracting increases debt capacity and lowers borrowing costs. The effects are stronger when price insurance is important, for municipalities with weaker courts, and for financially-constrained borrowers. The evidence is consistent with both insurance and enforcement channels and highlights a company's intervention in solving market frictions.


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. Using survey data, we find that workers are more likely to flow from formal to informal unemployment when they are eligible for UI benefits, and return from informal to formal employment to the same firm when UI benefits eligibility ends. 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 seem to benefit from collusion through lower equilibrium wages.

Decision-Making Delegation in Banks (with Jennifer Dlugosz, Yong Kyu Gam and Radhakrishnan Gopalan)

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)

Mobility Constraints and Labor Market Outcomes -- Evidence from Credit Lotteries 
    (with Bernardus van Doornik, Armando Gomes, and David Schoenherr)

    EMEA Best Paper Award (IWFSAS 2018 Conference)

Court Efficiency and Economic Fragility (with Dimas Fazio, Thiago Silva)

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