Imperial College Business School
Imperial College London
South Kensington Campus
London SW7 2AZ
Institutional Affiliation: Imperial College London
NBER Working Papers and Publications
|May 2018||Riding the Credit Boom|
with Harrison Hong, Wenxi Jiang, Yu-Jane Liu, Juan-Juan Meng: w24586
Research on leverage and asset-price fluctuations focuses on the direct effect of lax bank lending enabling financially-constrained investors to take excessive risks. Ignored are unconstrained investors speculating on higher prices during credit booms. To identify these two effects, we utilize China's staggered liberalization of stock-margin lending from 2010-2015—which encouraged a bank/brokerage-credit-fueled stock-market bubble. The direct effect is a 25 cent increase in a stock's market capitalization for each dollar of margin debt. Unconstrained investors led to an even larger increase in valuations of an additional 32 cents as they speculated on stocks likely to qualify for lending.
|October 2017||Vertical Integration, Supplier Behavior, and Quality Upgrading among Exporters|
with Jonas Hjort, Gianmarco León, Matthieu Teachout: w23949
We study the relationship between firms’ output quality and their choice of organizational structure. To do so, we use data on each step of the production and transaction chain that makes up Peruvian fishmeal manufacturing. We first show that quality upgrading is an important motive for vertically integrating. Firms integrate suppliers when the quality premium—the relative price of high quality output—rises for exogenous reasons, but not when average or low quality prices rise. The greater a firm’s scope for shifting low to high quality production, the greater its integration response. We then show that integration changes suppliers’ production behavior. A given supplier’s actions are less geared towards increasing quantity and more geared towards maintaining input quality after the suppli...