Publications
Multidimensional Innovation Responses and Foreign Competition with Carlos J. Ponce and Flavia Roldán (Industrial and Corporate Change, 2022).
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The dramatic increase in China's exports after its accession to the World Trade Organization offers a window of opportunity for learning the innovative behavior of firms under competitive distress. Using manufacturing firm-level data, we quantify the effects of foreign competition on innovation in Uruguay. Our estimates show that a higher level of foreign competition reduces innovation inputs (acquisition of new machines, equipment, and software) and outputs (process and product innovations). These adverse effects are larger for firms in business groups and smaller for more productive firms and firms with more skilled labor.
A demand-smoothing incentive for cesarean deliveries with Eugenio Giolito (Journal of Health Economics, 2021).
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We study the demand-smoothing incentives for private hospitals to perform c-sections. First, we show that a policy change in Chile that increased delivery at private hospitals by reducing the out-of-pocket cost for women with public insurance increased the probability of a c-section by 8.6 percentage points despite private hospitals receiving the same price for a vaginal or cesarean delivery. Second, to understand hospitals’ incentives to perform c-sections, we present a model of hospital decisions about the mode of delivery without price incentives. The model predicts that, because c-sections can be scheduled, a higher c-section rate increases total deliveries, compensating the forgone higher margin of vaginal deliveries. Finally, we provide evidence consistent with the demand-smoothing mechanism: hospitals with higher c-section rates are more likely to reschedule deliveries when they expect a high-demand week.
Employment and innovation: Firm level evidence from Argentina with David Giuliodori and Rodolfo Stucchi (Emerging Markets Finance and Trade, 2015).
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This article provides evidence about the effect of innovation on employment in Argentina in the period 1998–2001. In particular, we quantify the effect of process and product innovations on employment growth and the skill composition. Our results show that: (1) Product innovations have a positive effect on employment growth biased toward skill labor; (2) Process innovations do not affect employment growth or composition; (3) There are no heterogeneous effects in technology intensity and size; (4) Most of the contraction in employment in this period was explained by noninnovators.
Industry Equilibrium with Open Source and Proprietary Firms with Gastón Llanes (International Journal of Industrial Organization, 2013).
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We present a model of industry equilibrium to study the coexistence of open-source and proprietary firms. Two novel aspects of the model are (i) participation in open source arises as the optimal decision of profit-maximizing firms, and (ii) open-source and proprietary firms may (or may not) coexist in equilibrium. Firms decide their type and investment in R&D, and sell packages composed of a primary good and a complementary private good. Open-source firms share their technological advances on the primary good, whereas proprietary firms keep their innovations private. The main contribution of the paper is to determine conditions under which open-source and proprietary firms coexist in equilibrium. Interestingly, this equilibrium is characterized by an asymmetric market structure, with few large proprietary firms and many small open-source firms. We also study the limiting economy and present conditions under which large numbers favor cooperation in R&D.
Working papers
Hospital choice, c-sections, long-run maternal health, and subsequent fertility with Eugenio Giolito
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In this paper, we study the long-run effects of a 2003 policy change in Chile that decreased the cost of delivery at private hospitals for women with public health insurance which, as it was previously shown, had a sizable, positive impact on c-section rates. The access to rich administrative datasets allows us to measure the effect of policy change on maternal outcomes up to 14 years after the policy. Our results suggest that the policy had short-run benefits, decreasing the probability of prolonged hospitalization or severe maternal morbidity. However, when we look at long-run outcomes, we find a decrease in subsequent fertility. We also find an increase in long-run maternal health outcomes, which may help to explain this decrease in fertility: the probability of a repeat c-section, hospitalization due to cesarean scar complications, hysterectomy, and endometriosis.
On the Short-term Impact of Pollution: The Effect of PM 2.5 on ER Visits with Evangelina Dardati and Eugenio Giolito (submitted)
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In this paper, we study the short-term effect of fine particulate matter (PM 2.5) ex- posure on respiratory Emergency Room (ER) visits in Chile, a middle-income country with high levels of air pollution. To instrument for PM 2.5, we use wind speed at different altitudes (pressure levels). Unlike previous papers, our data allow us to study the impact of high pollution levels across all age groups. We find that a one microgram per cubic meter (μg/m3) increase in PM 2.5 exposure for one day increases ER visits for respiratory illness by 0.36 percent. The effect is positive and significant for all age groups. Furthermore, the coefficients on government environmental alerts suggest that avoidance behavior becomes increasingly significant across all age groups as restrictions become more severe.
Competition between single-market and multimarket banks: Evidence from the U.S. banking industry
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This paper estimates a dynamic model of local entry for the U.S. banking industry which considers two types of competitors: Single-market and Multimarket banks. Banking deregulation started a process were Single-market banks, once a majority heavily protected by both intrastate and interstate laws are being continuously replaced by multimarket banks.The econometric model allows for differences between single-market and multimarket banks in competitive effects, sell-off values, and sunk costs of entry. The contribution of the paper is twofold. First, it discusses the coexistence of firms with such a different geographic scope in an industry. Second, it provides evidence of the viability of single-market banks in the U.S. banking industry. Results suggest that single-market banks have profit advantages over multimarket banks, but single-market banks pay a sunk cost of entry which is 25 percent higher. These higher barriers to entry can be linked to start-up costs, advertisement, and hiring costs for management positions.