Publications
Large Multiproduct Exporters Across Rich and Poor Countries: Theory and Evidence.
Journal of Development Economics, 2022; 156, 10283
[Published Version] [Online Appendix]
Journal of Development Economics, 2022; 156, 10283
[Published Version] [Online Appendix]
Asymmetric Information, Quality, and Regulations. December, 2021
Forthcoming at Review of International Economics
[Published Version]
Forthcoming at Review of International Economics
[Published Version]
Flexibility and Productivity: Towards the Understanding of Firm Heterogeneity. September, 2021
Forthcoming at International Economic Review
with Mingzhi Xu
[Published Version] [Online Appendix]
Forthcoming at International Economic Review
with Mingzhi Xu
[Published Version] [Online Appendix]
Quality Heterogeneity and Misallocation: The Welfare Benefits of Raising your Standards.
Journal of International Economics, 2022; 134, 103544
with Ariel Weinberger
[Published Version] [Replication Package] [The Planner's Allocation] [The CES case] [Other VES Preferences]
Journal of International Economics, 2022; 134, 103544
with Ariel Weinberger
[Published Version] [Replication Package] [The Planner's Allocation] [The CES case] [Other VES Preferences]
Monopsonistic Competition, Trade, and the Profit Share. May, 2021
Forthcoming at Scandinavian Journal of Economics
[Published Version] [Replication Package]
Forthcoming at Scandinavian Journal of Economics
[Published Version] [Replication Package]
Has the Euro Shrunk the Band? Relative PPP Convergence in a Currency Union.
Scandinavian Journal of Economics, 2021; 123(2), 593–620
[Published Version] [Online Appendix]
Scandinavian Journal of Economics, 2021; 123(2), 593–620
[Published Version] [Online Appendix]
Working Papers
Quality Misallocation, Trade, and Regulations. April 2022 (under review)
CESifo Working Paper No. 9041
with Ariel Weinberger
[Video (older version)] [CESifo]
This paper incorporates product standard regulations into a multi-country general equilibrium framework with firm heterogeneity and variable markups. We model regulations as a fixed cost that any firm selling to an economy must pay, consistent with stylized facts that we present. The fixed cost can improve allocative efficiency by reallocating production towards high-quality firms, who under-produce in the market allocation, and away from low-quality firms least able to bear compliance costs. Importantly, the fixed cost generates a positive externality on the rest of the world as it induces entry of high-quality firms, and it improves the terms of trade of the non-imposing countries. Because of this positive externality, given a level of market access, governments do not choose domestic standards efficiently. The result justifies international cooperation based on the fact that such cooperation can improve welfare. We estimate our model and apply its gravity formulation to quantify the global welfare consequences of altering regulatory policies, the extent of the positive externalities across countries, the effects of cooperation, and the comparison with further tariff liberalization.
CESifo Working Paper No. 9041
with Ariel Weinberger
[Video (older version)] [CESifo]
This paper incorporates product standard regulations into a multi-country general equilibrium framework with firm heterogeneity and variable markups. We model regulations as a fixed cost that any firm selling to an economy must pay, consistent with stylized facts that we present. The fixed cost can improve allocative efficiency by reallocating production towards high-quality firms, who under-produce in the market allocation, and away from low-quality firms least able to bear compliance costs. Importantly, the fixed cost generates a positive externality on the rest of the world as it induces entry of high-quality firms, and it improves the terms of trade of the non-imposing countries. Because of this positive externality, given a level of market access, governments do not choose domestic standards efficiently. The result justifies international cooperation based on the fact that such cooperation can improve welfare. We estimate our model and apply its gravity formulation to quantify the global welfare consequences of altering regulatory policies, the extent of the positive externalities across countries, the effects of cooperation, and the comparison with further tariff liberalization.
Large Firms, Consumer Heterogeneity and the Rising Share of Profits. January 2022 (under review)
NBER Working Paper No. 29646
with Robert C. Feenstra and Mingzhi Xu
[Video (older version)] [NBER]
We examine the relationship between large firms and the rising profit share in a model that features oligopolistic competition and consumer heterogeneity. Conditional on the sales distribution, the presence of consumer heterogeneity increases the profit share because it increases firm-level markups. Using data on purchases at the household-barcode level from Nielsen, we quantify the role of consumer heterogeneity, finding that the aggregate markup and the profit share are 8 and 3 percentage points larger than those predicted by a model of a representative consumer. Furthermore, we find that the profit share has been increasing over time and that firm targeting of consumer types plays a role in explaining this rise.
NBER Working Paper No. 29646
with Robert C. Feenstra and Mingzhi Xu
[Video (older version)] [NBER]
We examine the relationship between large firms and the rising profit share in a model that features oligopolistic competition and consumer heterogeneity. Conditional on the sales distribution, the presence of consumer heterogeneity increases the profit share because it increases firm-level markups. Using data on purchases at the household-barcode level from Nielsen, we quantify the role of consumer heterogeneity, finding that the aggregate markup and the profit share are 8 and 3 percentage points larger than those predicted by a model of a representative consumer. Furthermore, we find that the profit share has been increasing over time and that firm targeting of consumer types plays a role in explaining this rise.
Pricing in Firm-to-Firm Trade. Evidence from a Danish Multinational. October, 2021 (under review)
Revise and Resubmit at Review of World Economics
with Elena Mattana
[Online Appendix]
We study pricing decisions in firm-to-firm trade. Using novel detailed transaction-level data from a Danish multinational firm, we find a large degree of price dispersion across countries, customers, and, surprisingly, within the same customer. In fact, we find that transaction-specific characteristics are the most important factors in explaining price variation. The dispersion of prices within a customer relationship can be affected by the firm's price setting strategy. Our unique dataset allows us to examine the consequences of the introduction of price lists of recommended and minimum prices. We find that the prices charged converge towards the recommended price, and that price dispersion within a customer can decline if the price lists reduce the pricing range for the products bought by that customer.
Revise and Resubmit at Review of World Economics
with Elena Mattana
[Online Appendix]
We study pricing decisions in firm-to-firm trade. Using novel detailed transaction-level data from a Danish multinational firm, we find a large degree of price dispersion across countries, customers, and, surprisingly, within the same customer. In fact, we find that transaction-specific characteristics are the most important factors in explaining price variation. The dispersion of prices within a customer relationship can be affected by the firm's price setting strategy. Our unique dataset allows us to examine the consequences of the introduction of price lists of recommended and minimum prices. We find that the prices charged converge towards the recommended price, and that price dispersion within a customer can decline if the price lists reduce the pricing range for the products bought by that customer.
Oligopoly and Oligopsony in International Trade. September, 2021
with Vladimir Tyazhelnikov
We study the effects of international trade on firms' oligopsony power in inputs markets. We build a theoretical model of international trade in which firms are oligopolists in the market for final goods and oligopsonists in the market for inputs. Consistent with evidence from the literature, firms' markups increase in both the extent of oligopsony power and of oligopoly power. Trade liberalization in one market reduces firms' market power in such market, but it has the opposite effect in the other market. In particular, international trade between oligopolists in final goods markets causes oligopsony power to increase. Calibrating our model for the US, we find that the reduction in domestic markups generated by international trade are 15-50% lower due to the presence of oligopsony power.
with Vladimir Tyazhelnikov
We study the effects of international trade on firms' oligopsony power in inputs markets. We build a theoretical model of international trade in which firms are oligopolists in the market for final goods and oligopsonists in the market for inputs. Consistent with evidence from the literature, firms' markups increase in both the extent of oligopsony power and of oligopoly power. Trade liberalization in one market reduces firms' market power in such market, but it has the opposite effect in the other market. In particular, international trade between oligopolists in final goods markets causes oligopsony power to increase. Calibrating our model for the US, we find that the reduction in domestic markups generated by international trade are 15-50% lower due to the presence of oligopsony power.
Work in Progress
Publications - Pre Ph.D.
Exchange Rate Devaluation and Reshuffling of Global Jobs
Journal of Economic Integration, 2013; 28(2):241-268. Awarded the Dae-Yang Prize for best article in 2013.
with F. Sdogati
[Published Version]
Journal of Economic Integration, 2013; 28(2):241-268. Awarded the Dae-Yang Prize for best article in 2013.
with F. Sdogati
[Published Version]
Other work
Published on ISPI (Italian Institute For International Political Studies)
Midterm elections: economia in ripresa eppure... October, 2014 (in Italian)
Le chances di Obama appese al filo della ripresa economica October, 2012 (in Italian)
Usa, cercasi stimolo fiscale per una rielezione June, 2012 (in Italian)
Midterm elections: economia in ripresa eppure... October, 2014 (in Italian)
Le chances di Obama appese al filo della ripresa economica October, 2012 (in Italian)
Usa, cercasi stimolo fiscale per una rielezione June, 2012 (in Italian)