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Working papers

Large beer and spirits makers expanded abroad mainly by acquiring local brands. Exploiting market share data in 76 countries and changes in brand ownership from 2007 to 2018, we estimate that owners matter little for brand performance, except via a negative consumer response to foreign ownership. Our counterfactuals indicate that market power increases were large enough to yield higher profits for the majority of mergers without relying on fixed-cost savings. Emulating pro-competition policies used by the US and EU could have saved South American consumers up to 18%. US beer prices would be 3–4% higher without DOJ-enforced divestitures.

Two-Sided Market Power In Firm-to-Firm Trade", with Michele FiorettiAyumu Ken Kikkawa, and Monica Morlacco, December 2022. Revision requested by the American Economic ReviewNBER WP 31253.

This paper studies how concentration among buyers and suppliers affects bilateral prices and markups in markets with two-sided heterogeneity. We provide a framework for analyzing buyer-supplier bargaining over the price of an imported good. To tractably and feasibly analyze the division of surplus between related parties, we leverage the Nash equilibrium in the Nash Bargaining solution concept (Horn and Wolinsky, 1988). We show that the main elasticities and model parameters are identified, given data on market shares of suppliers’ goods in buyers’ inputs and shares of buyers’ purchases in suppliers’ sales. To estimate the model, we build a novel dataset that merges international trade data from the Longitudinal Firm Trade Transactions Database (LFTTD) of the U.S. Census Bureau with balance sheet information on both U.S. importers and foreign exporters. We use the estimated model to investigate the determinants of prices, markups, and pass-through of aggregate shocks, with a special focus on the role of buyer and supplier concentration. We demonstrate that a shock can have very different pass-throughs on markups and prices depending on which market concentration is generating the markups. Our insights shed light on both the debate about the relationship between market concentration and markups, as well as on the recent discussions of import tariff pass-through on prices. 

We study the role of multinationals as drivers of structural change. Using confidential firm and establishment-level data for several high-income and middle-income countries, we conduct a decomposition of changes in manufacturing and services employment over a period of up to 25 years. Our decomposition accounts for within and between effects in continuing firms, as well as for the role of new and existing firms. Importantly, it distinguishes between multinational firms and non-multinational firms. We find that multinationals play a significant role in changes in manufacturing employment over time. We then develop a firm-level multinational and trade model of structural change and test its implications with our data.  Finally, we calibrate the model to our data and conduct counterfactuals to assess the role of multinationals in propagating shocks to structural change.

​“The Employment Effects of Multinational Corporations”, with Kyle Handley, Sui-Jade Ho, and Brian Lucking. September 2018. Draft coming soon.

​This paper studies the employment effects of multinational corporations in the U.S. This project details the dynamics of employment across firms, industries, and regions using a novel combination of international corporate ownership data matched to extremely detailed Census microdata spanning firms, workers, and trade-transactions. 


We measure the contribution of firm-embedded productivity to cross-country income differences. By firm-embedded productivity, we refer to the components of productivity that are firm-specific, such as blueprints, management practices, and other intangible capital. Using micro-level data for multinational enterprises (MNEs), we compare market shares of the same MNE in different countries and document that they are systematically larger in less-developed countries. This indicates that MNEs face less competition and that firm-embedded productivity is scarce in these countries. We implement a measure of firm-embedded productivity based on this observation. Differences in firm-embedded productivity account for a third of the cross-country variance in output per worker in our sample.

"Multinational production and intra‐firm trade" with Ayhab F. Saad. Review of International Economics, 2022. 1– 28

Intra-firm trade, from parents to affiliates, has been combined with standard models of Multinational production (MP) to deliver gravity-style predictions for foreign affiliates' sales. Nonetheless, the evidence shows that intra-firm trade is concentrated among a small set of large multinational firms. Using firm-level data from 35 countries, we document that only firms belonging to multinational corporations (MNCs) in the upper tail of the firm’s size distribution are significantly affected by the distance to their parents. We present a simple framework featuring MNCs selection into intra-firm trade and derive the analytical gravity equations that are consistent with the empirical findings.​

"Multinational Production and Comparative Advantage", Journal of International Economics, 2019. Vol 119: 1-54. Awarded FREIT-RMET Best Graduate Paper Prize, 2014

This paper shows analytically and quantitatively how omitting the striking sectoral heterogeneity of multinational production (MP) and its relationship with countries’ comparative advantage leads to understating the gains from MP and openness. By construction, one-sector models of trade and MP, ignore the conflicting effects that a reduction in MP frictions has on the sectoral dispersion of MP and trade shares. On the one hand, freer MP increases the dispersion of MP shares across sectors, and with it, the gains from MP. On the other hand, it reduces the heterogeneity of trade shares, since MP erodes sectoral level Ricardian comparative advantage, diminishing, therefore, gains from trade. These effects are driven by the disproportional allocation of MP in industries where local firms are relatively less productive, which generates an uneven productivity boost favoring comparative disadvantage sectors, lowering the differences in observed sectoral productivities. To assess the welfare implications of this mechanism, this paper assembles a novel industry-level dataset of bilateral foreign affiliate sales for 32 countries, 9 tradable sectors, and 4 non-tradable sectors.

"The Growth of Multinational Firms in the Great Recession"with Javier Cravino and Andrei Levchenko. Journal of Monetary Economics, 2017. Vol. 85(C): 50-64.

We use a large firm-level dataset to study the performance of multinational firms across multiple countries during the Great Recession. We document that the foreign affiliates of multinational firms grew faster than local firms both before and after the crisis, but that this rapid growth was interrupted in the crisis. We disentangle the mechanisms accounting for this decline in multinational activity. Much of the slowdown can be explained by industry and size differences between domestic and foreign-owned firms. We show, however, that multinational firms from different source countries had different experiences during the crisis. Building on these results, we use a quantitative model of multinational production to assess the role of multinational firms in the global recession. Had multinationals’ performance relative to domestic firms remained unchanged during the crisis, the median country’s aggregate growth would have been 0.12% higher. The impact is heterogeneous across countries, ranging from -0.13 to 0.5%.

Selected work in progress

​​“Cross Border Intra-Firm Trade and the Propagation of Idiosyncratic Shocks", with Tomasz Swiecki and Brian Ceballos, September 2021 (new draft coming soon!)

"Concentration and Markups in International Trade", with Michele Fioretti., Ayumu Ken Kikkawa, and Monica Morlacco.

“Protectionism and Profit", with Patrick KennedyJake Mortenson, and Roman Zarate

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