Publications
Large Firms, Consumer Heterogeneity and the Profit Share.
American Economic Journal: Macroeconomics, 2026; 18 (2): 260-91
with Robert C. Feenstra and Mingzhi Xu
[Published Version] [Video (older version)] [NBER]
American Economic Journal: Macroeconomics, 2026; 18 (2): 260-91
with Robert C. Feenstra and Mingzhi Xu
[Published Version] [Video (older version)] [NBER]
Making America Great Again? The Economic Impacts of Liberation Day Tariffs.
Journal of International Economics, 2025; 157, 104138
with Anna Ignatenko, Ahmad Lashkaripour, and Ina Simonovska
[Published Version (Open Access)] [Replication Package] [NBER] [CEPR] [CESifo]
Press Coverage: CSIS, UCDavis; in Italian: Ansa, Quotidiano Nazionale, La Statale News , RiEnergia
Journal of International Economics, 2025; 157, 104138
with Anna Ignatenko, Ahmad Lashkaripour, and Ina Simonovska
[Published Version (Open Access)] [Replication Package] [NBER] [CEPR] [CESifo]
Press Coverage: CSIS, UCDavis; in Italian: Ansa, Quotidiano Nazionale, La Statale News , RiEnergia
International Spillovers of Quality Regulations.
International Economic Review, 2024; 66 453-484
with Ariel Weinberger
[Published Version] [CESifo] [Video (older version)]
International Economic Review, 2024; 66 453-484
with Ariel Weinberger
[Published Version] [CESifo] [Video (older version)]
Oligopoly and Oligopsony in International Trade.
Canadian Journal of Economics, 2024; 57,401-429
with Vladimir Tyazhelnikov
[Published Version][Replication Package] [Online Appendix]
Canadian Journal of Economics, 2024; 57,401-429
with Vladimir Tyazhelnikov
[Published Version][Replication Package] [Online Appendix]
Pricing in Firm-to-Firm Trade. Evidence from a Danish Multinational.
Review of World Economics, 2024; 160, 311-375
with Elena Mattana
[Published Version] [Online Appendix]
Review of World Economics, 2024; 160, 311-375
with Elena Mattana
[Published Version] [Online Appendix]
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.
Review of International Economics, 2022; 30(4), 1180-1198
[Published Version]
Review of International Economics, 2022; 30(4), 1180-1198
[Published Version]
Flexibility and Productivity: Towards the Understanding of Firm Heterogeneity.
International Economic Review, 2022; 63: 1055-1108
with Mingzhi Xu
[Published Version] [Online Appendix]
International Economic Review, 2022; 63: 1055-1108
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.
Scandinavian Journal of Economics, 2022; 124: 488-515
[Published Version] [Replication Package]
Scandinavian Journal of Economics, 2022; 124: 488-515
[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
Who Can Produce What? Firm Capabilities and Product Entry. July 2026
CEPR Discussion Paper No. 18800; CEP Discussion Paper No. 1978; CESifo Working Paper No. 11398
with John Morrow and Vladimir Tyazhelnikov
[CEPR] [CEP] [ESCOE] [ESCOE Blog] [CESifo]
Which firms supply which products? Modeling multi-product firms under heterogeneous markups, we recover firms costs for produced products and develop an algorithm inspired by recommender systems to predict them for unproduced products. Lower predicted costs imply increased product adoption and explain which firms supply products when export demand induces domestic entry. The rich counterfactuals provided by the algorithm enable new quantifications of shocks and policy effects. In a price stabilization exercise following a cost shock, we find entry subsidies often cost less than subsidies to incumbents, but less frequently as shocks grow and capable entrants become scarce.
CEPR Discussion Paper No. 18800; CEP Discussion Paper No. 1978; CESifo Working Paper No. 11398
with John Morrow and Vladimir Tyazhelnikov
[CEPR] [CEP] [ESCOE] [ESCOE Blog] [CESifo]
Which firms supply which products? Modeling multi-product firms under heterogeneous markups, we recover firms costs for produced products and develop an algorithm inspired by recommender systems to predict them for unproduced products. Lower predicted costs imply increased product adoption and explain which firms supply products when export demand induces domestic entry. The rich counterfactuals provided by the algorithm enable new quantifications of shocks and policy effects. In a price stabilization exercise following a cost shock, we find entry subsidies often cost less than subsidies to incumbents, but less frequently as shocks grow and capable entrants become scarce.
Wage Setting in Multiproduct Firms. June 2025 (submitted)
CESifo Working Paper No. 11674
with Jackie M.L. Chan, Michael Koch, and Michael Irlacher
[CESifo]
This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign to the firm-size wage premium. Additional empirical evidence suggests that workers are compensated by increased job security at multiproduct firms. We rationalize the scope wage discount using a theory in which workers value the internal labor market offered by multiproduct firms, as they can switch across product lines instead of leaving the firm. This internal flexibility makes product scope an amenity in itself, giving multiproduct firms the monopsony power to offer lower wages. Our findings have important implications for understanding labor market dynamics in times of rising concentration, especially from the contributions of large multiproduct firms.
CESifo Working Paper No. 11674
with Jackie M.L. Chan, Michael Koch, and Michael Irlacher
[CESifo]
This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign to the firm-size wage premium. Additional empirical evidence suggests that workers are compensated by increased job security at multiproduct firms. We rationalize the scope wage discount using a theory in which workers value the internal labor market offered by multiproduct firms, as they can switch across product lines instead of leaving the firm. This internal flexibility makes product scope an amenity in itself, giving multiproduct firms the monopsony power to offer lower wages. Our findings have important implications for understanding labor market dynamics in times of rising concentration, especially from the contributions of large multiproduct firms.
Fight or Flight? How Do Firms Adapt their Product Mix in Response to Demand, Costs, and Competition. April 2026
CESifo Working Paper No. 11144.
Revise and Resubmit at Journal of the European Economic Association
with Frederic Warzynski and Rui Zhang
[CESifo]
We study how multi-product firms adjust their product mix in response to product-specific demand, costs, and competition. Using Danish data, we document that firms' top-selling products tend to operate in larger markets with fewer competitors, and that product-level shocks explain a substantial share of variation in firm-product sales. Motivated by these findings, we develop a multi-country general equilibrium model in which firms sort across products that differ in attractiveness, marginal costs, and trade openness. Under Generalized Translated Power preferences, a single parameter determines whether product characteristics generate pro- or anti-competitive effects, allowing the model to nest several commonly used demand systems. We estimate the model and find that, in most sectors, higher product attractiveness and trade openness intensify competition, so only the most productive firms supply the products that are the most attractive and the most exposed to international trade. A counterfactual increase in the EU expenditure share on critical green products to 70% raises the output-weighted number of EU firms serving the EU market by 12% but lowers welfare by 6% among affected products.
CESifo Working Paper No. 11144.
Revise and Resubmit at Journal of the European Economic Association
with Frederic Warzynski and Rui Zhang
[CESifo]
We study how multi-product firms adjust their product mix in response to product-specific demand, costs, and competition. Using Danish data, we document that firms' top-selling products tend to operate in larger markets with fewer competitors, and that product-level shocks explain a substantial share of variation in firm-product sales. Motivated by these findings, we develop a multi-country general equilibrium model in which firms sort across products that differ in attractiveness, marginal costs, and trade openness. Under Generalized Translated Power preferences, a single parameter determines whether product characteristics generate pro- or anti-competitive effects, allowing the model to nest several commonly used demand systems. We estimate the model and find that, in most sectors, higher product attractiveness and trade openness intensify competition, so only the most productive firms supply the products that are the most attractive and the most exposed to international trade. A counterfactual increase in the EU expenditure share on critical green products to 70% raises the output-weighted number of EU firms serving the EU market by 12% but lowers welfare by 6% among affected products.
Shocks to the Organization of the Firm: the Case of Foreign Takeovers. March 2026
CESifo Working Paper No. 11525
with Michael Koch and Angelina Odintsova
[CESifo]
This paper studies how foreign acquisitions affect firms' internal labor organization, particularly occupational switching. This focus is inspired by new stylized facts we document using linked employer-employee data from Denmark: while the total number of occupations and hierarchical layers in firms remains stable, a significant share of firms simultaneously add and drop occupations and layers each year. Applying a dynamic two-way fixed effects matching estimator, we find that foreign acquisitions lead to significant reorganization within firms: though the number of layers or occupations remains unchanged, firms exhibit substantial occupational churning among existing workers, especially among higher-paid employees. Using individual employment biographies, we find that workers reassigned to different occupations following a foreign acquisition experience wage declines, consistent with the idea that some reassignments involve demotions.
CESifo Working Paper No. 11525
with Michael Koch and Angelina Odintsova
[CESifo]
This paper studies how foreign acquisitions affect firms' internal labor organization, particularly occupational switching. This focus is inspired by new stylized facts we document using linked employer-employee data from Denmark: while the total number of occupations and hierarchical layers in firms remains stable, a significant share of firms simultaneously add and drop occupations and layers each year. Applying a dynamic two-way fixed effects matching estimator, we find that foreign acquisitions lead to significant reorganization within firms: though the number of layers or occupations remains unchanged, firms exhibit substantial occupational churning among existing workers, especially among higher-paid employees. Using individual employment biographies, we find that workers reassigned to different occupations following a foreign acquisition experience wage declines, consistent with the idea that some reassignments involve demotions.
Lobbying for Regulations: When Big Business Says Yes. March 2026
CESifo Working Paper No. 12536
with Ariel Weinberger
[CESifo]
Press Coverage: ProMarket
Do firms uniformly oppose regulations that increase production costs, or might industry leaders strategically support stricter standards as a competitive tool? We identify a specific mechanism through which large firms strategically support regulations to enhance their competitive position. Extending the Melitz-Chaney model of firm heterogeneity to incorporate government regulations and lobbying following Grossman-Helpman, we derive conditions under which regulations disproportionately burden smaller competitors while benefiting larger survivors through reduced competition. The model predicts that firm size is positively correlated with support for stringent regulations, but that larger sunk investments push firms to oppose such policies. To test these predictions, we develop a text-as-data approach using large language models to classify firm regulatory preferences from lobbying disclosures—a measurement challenge that has limited prior systematic analysis. Applying guided machine learning to over 20,000 U.S. lobbying reports, we confirm that larger firms are significantly more likely to support stricter regulations, especially in concentrated industries. Capital-intensive firms with high leverage and less redeployable assets tend to oppose regulations, suggesting that operational flexibility is crucial for extracting strategic benefits from regulatory changes.
CESifo Working Paper No. 12536
with Ariel Weinberger
[CESifo]
Press Coverage: ProMarket
Do firms uniformly oppose regulations that increase production costs, or might industry leaders strategically support stricter standards as a competitive tool? We identify a specific mechanism through which large firms strategically support regulations to enhance their competitive position. Extending the Melitz-Chaney model of firm heterogeneity to incorporate government regulations and lobbying following Grossman-Helpman, we derive conditions under which regulations disproportionately burden smaller competitors while benefiting larger survivors through reduced competition. The model predicts that firm size is positively correlated with support for stringent regulations, but that larger sunk investments push firms to oppose such policies. To test these predictions, we develop a text-as-data approach using large language models to classify firm regulatory preferences from lobbying disclosures—a measurement challenge that has limited prior systematic analysis. Applying guided machine learning to over 20,000 U.S. lobbying reports, we confirm that larger firms are significantly more likely to support stricter regulations, especially in concentrated industries. Capital-intensive firms with high leverage and less redeployable assets tend to oppose regulations, suggesting that operational flexibility is crucial for extracting strategic benefits from regulatory changes.
Tariffs Tax the Poor More: Evidence from Household Consumption During the US-China Trade War. February 2026
CESifo Working Paper No. 11610
with Hong Ma, Jingxin Ning, and Mingzhi Xu
[SSRN] [CESifo]
Using disaggregated US household expenditure data, we study the distributional consequences of the US-China trade war. We estimate a highly flexible demand system to compute household-specific price indexes. The increases in US tariffs on Chinese products between 2018 and 2019 led to an average price index increase of 1.09%, with a disproportionately larger impact on low-income households. Specifically, we document a 0.9 percentage point smaller increase in the household price index for the top 20% income households compared to the bottom 20%. The difference stems from wealthier households' greater expenditure adjustments and smaller reductions in product variety.
CESifo Working Paper No. 11610
with Hong Ma, Jingxin Ning, and Mingzhi Xu
[SSRN] [CESifo]
Using disaggregated US household expenditure data, we study the distributional consequences of the US-China trade war. We estimate a highly flexible demand system to compute household-specific price indexes. The increases in US tariffs on Chinese products between 2018 and 2019 led to an average price index increase of 1.09%, with a disproportionately larger impact on low-income households. Specifically, we document a 0.9 percentage point smaller increase in the household price index for the top 20% income households compared to the bottom 20%. The difference stems from wealthier households' greater expenditure adjustments and smaller reductions in product variety.
Inequality and Market Power: Evidence from the United States and China. October 2025
CESifo Working Paper No. 12181
with Mingzhi Xu and Yumin Hu
[CESifo]
Press Coverage: ProMarket
Using barcode-level data from the NielsenIQ Homescan Consumer Panel, we study how income inequality affects the prices of identical goods across US counties. We find that higher inequality reduces prices for products with low market shares but increases prices for products with high market shares. With higher inequality, larger firms, which sell more high-market-share goods, tend to raise prices, while smaller firms lower them. We find a similar pattern using Chinese export data across countries. To interpret these findings, we develop a model where a mean-preserving spread in income affects pricing through the convexity of demand and the convexity of the price derivative of demand with respect to income. We derive conditions under which inequality raises the price elasticity for low-market-share products and lowers it for high-market-share products, matching our empirical results.
CESifo Working Paper No. 12181
with Mingzhi Xu and Yumin Hu
[CESifo]
Press Coverage: ProMarket
Using barcode-level data from the NielsenIQ Homescan Consumer Panel, we study how income inequality affects the prices of identical goods across US counties. We find that higher inequality reduces prices for products with low market shares but increases prices for products with high market shares. With higher inequality, larger firms, which sell more high-market-share goods, tend to raise prices, while smaller firms lower them. We find a similar pattern using Chinese export data across countries. To interpret these findings, we develop a model where a mean-preserving spread in income affects pricing through the convexity of demand and the convexity of the price derivative of demand with respect to income. We derive conditions under which inequality raises the price elasticity for low-market-share products and lowers it for high-market-share products, matching our empirical results.
Testing the Waters: How Firms Enter New Markets. September 2025
CEPR Discussion Paper No. 19485; CESifo Working Paper No. 11340
Revise and Resubmit at Journal of International Economics
with Carsten Eckel, Ina Jäkel, and Raymond Riezman
[CEPR] [CESifo]
Using firm-level data on production and trade from Denmark, we document that firms frequently employ a strategy of entering new export markets exclusively with Carry-Along Trade (CAT), i.e., with products manufactured by other firms. To rationalize this new stylized fact, we propose a model where CAT plays a pivotal role in enabling firms to learn about market conditions and assess market viability. In our framework, exporting requires upfront entry investments that create a benefit of knowing the exact market conditions. When the potential losses incurred from making investment decisions for own-goods based on expected market characteristics are significant, beginning to export with CAT becomes the optimal strategy. We provide empirical evidence in support of our mechanism by showing that entering with CAT is particularly prevalent among small firms, in distant markets, and among firms with no prior exporting experience.
CEPR Discussion Paper No. 19485; CESifo Working Paper No. 11340
Revise and Resubmit at Journal of International Economics
with Carsten Eckel, Ina Jäkel, and Raymond Riezman
[CEPR] [CESifo]
Using firm-level data on production and trade from Denmark, we document that firms frequently employ a strategy of entering new export markets exclusively with Carry-Along Trade (CAT), i.e., with products manufactured by other firms. To rationalize this new stylized fact, we propose a model where CAT plays a pivotal role in enabling firms to learn about market conditions and assess market viability. In our framework, exporting requires upfront entry investments that create a benefit of knowing the exact market conditions. When the potential losses incurred from making investment decisions for own-goods based on expected market characteristics are significant, beginning to export with CAT becomes the optimal strategy. We provide empirical evidence in support of our mechanism by showing that entering with CAT is particularly prevalent among small firms, in distant markets, and among firms with no prior exporting experience.
Work in Progress
Explorations in Product Space: Multi-product Firms and their Product Portfolios
with Carsten Eckel, Ina Jäkel, and Raymond Riezman
with Carsten Eckel, Ina Jäkel, and Raymond Riezman
Straight from the Apple Tree: Gravity Shapes the Production Network at the Firm-Level
with Gustavo Gonzáles and Guzman Ourens
with Gustavo Gonzáles and Guzman Ourens
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]