Publications
"Export Side Effects of Organized Crime: The case of Mexico." with Jose Morales and Bernardo Ricca. (2023). Journal of International Economics. https://doi.org/10.1016/j.jinteco.2023.103775
This paper finds that law enforcement interventions during the Mexican Drug War (MDW) hindered local export growth. We leverage exogenous variation in drug enforcement from the close election of mayors affiliated with the national ruling party during the MDW. Firms servicing the same markets but exogenously exposed to drug enforcement experienced lower export growth. The MDW decreased capital investments, eroding productivity gains in capital-intensive activities.
Working Papers
"Household Debt Composition and Labor Market Outcomes" with Nelson Camanho, Bernardo Ricca, and Toni Santos.
[Job Market Paper 2024: Draft available upon request; version authorized by the Central Bank of Brazil for Conference and Private Submissions but not yet for public distribution]
How does indebtedness affect labor outcomes after job separation? Future debt repayments and limited access to consumption smoothing instruments may drive workers to accept early job offers at lower salaries -- a debt liquidity channel. Default costs may act as a disciplining mechanism that induces individuals to increase their search intensity or substitute non-pecuniary benefits for higher salaries -- a debt commitment channel. Finally, in the presence of personal limited liability and low default costs, debt payments might induce individuals to search longer to obtain a better-paid job -- a debt overhang channel. Linking a comprehensive credit registry with employer-employee data, we study how personal indebtedness at mass layoff correlates with the probability of reemployment in the formal sector, unemployment duration, and wage growth. We show that not only the level of debt but also its composition changes job search behaviour. As predicted by theory, unsecured and employment-linked debt associates with patterns consistent with household debt-overhang; while mortgages exhibit patterns consistent with debt commitment.
"Shareholder Activism: Blessing of Affliction for Incumbent CEOs." with Jana Fidrmuc and Jiaqi Zhao.
We examine CEO career consequences following shareholder activism in their companies. Using the control function approach, we find limited evidence that it is shareholder activism that causes CEO career prospects to deteriorate post activism. We show that the result has to do with endogeneity in activist target selection; targeted CEOs would have been replaced even without activists' intervention. Moreover, considering hostility on both sides of the campaign, we show that CEO resistance to activism improves targeted CEOs' career prospects when activists decide not to go hostile. Campaigns involving hedge funds versus other activists exhibit more negative career consequences, still this effect is significantly mitigated for resistant CEOs. We also find a disciplinary effect of shareholder activism on targeted CEOs' board positions, but only when activists are hostile..
"Effects of Immigration on Investment."
This paper documents how corporate investment reacts to immigration. I use an interaction of the ex-ante cluster of migrants and a change in immigration policy in the UK to provide evidence that investment increases in anticipation of immigration flows. The time variation in immigration policy allows me to control for local economic shocks, reducing endogeneity concerns. Part of the increase in investment occurs through a transitory increase in fixed assets. The major change occurs in the extensive margin, through an increase in firm creation. The increase is larger for the knowledge and the service sector, suggesting that human capital is an important driver of the effect. The results suggest that firms react fast to an immigration-induced labor supply shock.
"A Managerial Explanation for Agency Costs of Free Cash Flow: Evidence from European Football."
[Draft available upon request]
Are inexperienced managers more likely to invest additional cash sub-optimally? To answer this question, this paper uses a new hand-constructed database on odds of football matches, football managers, and player trades of teams that participate in the European Champions League from 2000 until 2014. I provide evidence that wins in matches with close odds ex-ante are as good as randomly assigned, and, in particular, uncorrelated with the experience or age of managers. I then show that teams with inexperienced managers significantly spend the cash obtained in close matches to acquire new players; while experienced managers do not engage in this behavior. Teams do not perform better after the new acquisitions, suggesting inexperienced managers may not spend cash to benefit the team.
Work in progress
"Firm Technology Usage" with Rory Mullen. [NEW DRAFT AVAILABLE BY DECEMBER 2024]
Publications and Working Papers
