We consider the role of local geographic peers in determining equilibrium firm behavior. We exploit in-transitivity in local peer-firm networks and utilize spatial econometric techniques to circumvent well-known challenges in estimating and interpreting empirical models of peer effects. We find...

We study the determinants of value creation in the cross section of U.S. commercial banks. We develop novel measures of individual bank's productivities at collecting deposits and making loans. We relate these measures to bank market values and find that variation in deposit productivity...

Firms producing differentiated products have high margins and therefore low risk. As a result firms invest more into developing differentiated products when they perceive risk is high. Higher risk also implies higher product skewness towards more differentiated products and therefore higher...

In this paper we study firm dynamics and industry equilibrium when firms under financial distress face a non-trivial choice between alternative bankruptcy procedures. Given limited commitment and asymmetric information, financial contracts specify default, renegotiation and reorganization...

Firm-level investment paths are commonly characterised by periods of low or zero investment punctuated by large investment ‘spikes’. We document that such spikes are important for understanding firm and aggregate level investment in the UK. We show that annual variation in aggregate...

Using two novel administrative datasets containing monthly sales and input-sourcing information for plants and products with regional heterogeneity within India, we find that the inter- to intra-region trade ratio declines sharply after the COVID-19 induced lockdown in March 2020. The ratio...

In this short research note we investigate the role of diversification in the firm growth process. We build on Penrose's (1959) Theory of the Growth of the Firm to formulate hypotheses about growth of employment, assets, and sales in the years before, during and after a new product introduction....

Does the availability new process technologies---like automation---reinforce the lead of dominant firms, or the opposite? Using novel plant-level data on automation I show patterns consistent with endogenous automation adoption reducing market leader share on average; particularly so in the most...

We study the impact of transparency in a commodity market on the decision problem of a competitive firm under price uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable signals which are correlated with the random...

The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit - technical efficiency...