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Journal of Political Economy, Ahead of Print.

Journal of Political Economy, Ahead of Print.

Frequent, yet uninformed, market timing recommendations by a financial advisory firm generate significant flows for Chilean pension funds. These flows induce substantial changes in the Chilean foreign exchange rate due to the funds’ high allocation to international securities. Local banks provide liquidity to pension funds in the spot market and their hedging transactions propagate the demand fluctuations

Journal of Political Economy, Ahead of Print.

Journal of Political Economy, Ahead of Print.

Journal of Political Economy, Ahead of Print.

We study the aggregate consequences of dynamic lending relationships in a model of heterogeneous banks facing financial frictions. We estimate the model’s loan demand system on administrative loan-level data: the market power implied by the estimated strength and persistence of relationships yields a long run reduction in credit of 5.9%. Relationships amplify the negative real effects of credit supply

We analyze the trade-offs of having intermediaries originate government-sponsored enterprise (GSE) mortgages using proprietary GSE data. We first find evidence of lenders pricing for observable and unobservable default risk independently of the GSEs. We then develop and estimate a model of competitive lending in which lenders have skin-in-the-game and conduct additional screening beyond the GSEs’ criteria

Recent literature highlights heterogeneous spatial patterns in entrepreneurial ecosystems (EEs), traditionally viewed as territorially bounded phenomena. However, growing evidence suggests that EEs possess complex spatial topologies. Existing research, primarily at the EE level, lacks insights into how individual entrepreneurs navigate these spatial structures. This study takes a microfoundational

Empirical research on small ventures’ coopetition is scant, and little is known about trust in between small venture coopetition partners. We examine both proactive and reactive motivation for coopetition and the role of partner trust among 527 small ventures from multiple industries. We find both types of motivation to be directly and significantly related to mutual benefits and no difference in strength

Journal of Political Economy, Ahead of Print.

Global fossil fuels subsidies remain large despite the evident environmental and economic gains from their removal. The increasing attempts to avert climate change-related challenges while creating economic opportunities are promoting energy transition through investments in low-carbon energy technologies and their diffusion. Yet, the existing literature has not assessed how fossil fuel subsidies influence

Forecasting commodity prices is vital for economic policy, especially amid recent geopolitical tensions and market disruptions. In recent years, advanced deep learning models have become particularly effective in this domain. Among these models, RNN-based architectures like LSTM and GRU are known for their strong predictive capabilities. In this paper, we show that the FEDformer model offers superior

This paper investigates the transition to sustainable Bitcoin mining and the associated challenges. We identify two key channels of negative externalities stemming from the operations of carbon-intensive (“brown”) miners that discourage the adoption of environmentally friendly (“green”) mining practices. First, the lottery-like mechanism of Bitcoin mining prioritizes relative computational power, disregarding

This paper investigates how firms’ pollution incentives are influenced by their ability to divest polluted assets. My empirical setting is a major reform that exempts purchasers from liability for past contamination. Using a difference-in-differences framework, I find that the reform reduces toxic emissions, lowers bankruptcy risk, and increases firm value. Cross-sectional tests show that the decline

We study block trades in the corporate bond market, where dealers buy or sell blocks from initiating customers and offset their positions with receiving investors. Our findings indicate that while receivers benefit from trading cost savings, they primarily bear adverse selection costs and experience worse outcomes when informed trading is prevalent. Mandatory trade reporting improves receiver outcomes

The degradation of the environment, driven by the reliance on fossil fuels, has prompted governments to shift towards renewable energy sources. While the topic of energy transitions is gaining researchers' attention, the contribution of factors related to policy, the environment, the economy, finance, and technology is still unclear. One such factor is environmental policy stringency that potentially

A Schumpeterian growth model is developed to investigate how environmental policy affects economic growth, when environmental policy also affects the direction of technical change. The model is designed to match several stylized facts to ensure its empirical relevance. It is shown analytically that a tightening of the environmental policy directs research efforts toward pollution abatement technologies

Journal of Political Economy, Volume 133, Issue 5, May 2025.

Journal of Political Economy, Volume 133, Issue 5, Page 1704-1704, May 2025.

Journal of Political Economy, Volume 133, Issue 5, May 2025.

Studies looking at electricity market designs for very high shares of wind and solar often conclude that the energy-only market will break down. Without fuel costs, it is said that there is nothing to set prices. Symptoms of breakdown include long phases of zero prices, scarcity prices too high to be politically acceptable, prices that collapse under small perturbations of capacities from the long-term

We develop a path-centric account that explains how action-oriented entrepreneurship training translates into self-employment. The path-centric account suggests that action-oriented entrepreneurship training positively impacts self-employment through entrepreneurial motivation and entrepreneurial action, which form a reciprocal and mutually stabilizing relationship after training. Randomized controlled

This paper investigates the macro-financial impact of carbon policy and the role of reserve requirements in managing climate-related transition risks. Empirical evidence shows that carbon policy shocks lead to a 0.7% output loss, a 0.3% rise in inflation, financial instability, and sectoral reallocation effects. Using a macro-financial DSGE model with environmental features, the model predicts that

Clean production transformation is critical for sustainable development, yet limited research has addressed how public policies can incentivize firms to voluntarily adopt such practices. This paper bridges this gap by developing a game-theoretic framework featuring a government and two symmetric firms engaged in sequential strategy selection. The analysis reveals that a strategically designed minimum

Economists often measure discrimination as disparities arising from the direct effects of group identity. We develop new tools to model and measure systemic discrimination, capturing how discrimination in other decisions indirectly contributes to disparities. A novel experimental design, the Iterated Audit, identifies systemic discrimination. We then illustrate these new tools in two field experiments

Optimizing waste-to-energy (WTE) technology portfolio is crucial for large waste treatment enterprises to attain sustainable profits and minimize risks in uncertain environments. A key issue is accurately assessing the return of individual technologies and mitigating the impact of parameter variations in portfolio optimization. Traditional portfolio methods rely heavily on precise input parameters

This study advances resource-based theorizing of venture growth by examining how strategic resources, particularly intellectual property (IP), interact with versatile resources like human and financial capital across different environments. Using a configurational approach and fuzzy-set qualitative comparative analysis (fsQCA) on a four-year longitudinal dataset of 825 ventures, the research identifies

Equity crowdfunding (ECF) is a phenomenon that offers significant opportunities for financing growth and supporting business success. However, its effectiveness in fostering firm performance remains ambiguous, particularly in the presence of financial constraints. This article explores the relationship between ECF and firm performance through the lens of financial constraints. Our findings suggest

Energy poverty in Sub-Saharan Africa extends beyond access to electricity as it encompasses issues of affordability and reliability. In mitigating the adverse effects of frequent power outages and voltage fluctuations — that exacerbate financial burdens and hinder the ability to meet basic energy needs — households in this region often incur extra costs by relying on generators, voltage stabilizers

This paper explores the role of markets in facilitating the transition to renewable energy sources. It investigates the effectiveness of a wholesale market design in which all electricity is traded on the spot market to provide price signals that encourage investments in renewable generation and storage during this transition. To do this, we develop a model that represents a two-period electricity

We study the impact of global volatility on the equity portfolio flows of institutional investors worldwide. Aggregate equity allocations of institutional investors decrease during periods of high volatility, both in developed and, even more strongly, in emerging markets. Our granular portfolio-level data allows us to uncover disaggregated investor responses that are an order of magnitude larger than

Journal of Political Economy, Ahead of Print.

Decentralization of decision-making in interfirm networks (such as franchise networks, strategic alliances, or joint ventures) requires successfully transferring knowledge from headquarters to local network partners using appropriate knowledge transfer mechanisms. This study examines the relationship between the franchisor’s choice of knowledge transfer mechanisms and the decentralization of decision

Global climate change and the growing pressure of energy transition pose complex challenges for less developed economies in achieving environmental sustainability. Artificial intelligence technology offers a promising avenue for advancing renewable energy development. This study analyzes the non-linear impact of AI technology on the renewable energy, drawing on AI patent data from 56 less developed

Energy Poverty (EP) poses a pervasive challenge within the European Union (EU), impacting both public health and the trajectory of sustainable development. Despite its prevalence, the existing body of literature addressing the measurement of EP in the EU remains limited. This study aims to contribute to the literature by employing a comprehensive approach to assess and classify the EP levels across

This paper investigates the link between firms' ecological footprints (EF) and cybersecurity risk in U.S. companies from 2007 to 2018. We find that higher EF is associated with lower cybersecurity risk. To address endogeneity concerns, we employ multiple identification strategies and confirm the robustness of the results. Mechanism analyses suggest that innovation and cash holdings mediate this relationship

This paper investigates whether individuals’ relative (status or positional) concerns are associated with their transitions from paid employment or inactivity to self-employment. The conjecture is that stress and anxiety arising from socio-economic comparisons may be motivating factors for individuals to establish their own businesses. We examine this using the Socio-Economic Panel (SOEP) dataset,

Real-time information has the potential to improve market outcomes in wholesale electricity markets. However, transparency can also facilitate coordination between firms, raising questions over the appropriate extent of information disclosure. Despite this ongoing debate, there is a lack of understanding of the information employed by firms when bidding in wholesale electricity markets. Using data

Environmental regulation policies and market demand are important factors driving the proliferation of electric vehicles. By introducing prospect theory, this study constructs the production decision model of automobile manufacturers based on evolutionary game and networked evolutionary game from both micro and macro perspectives. The results of theoretical and numerical simulation analysis show that:

We analyze whether and to what extent gasoline price shocks influenced headline inflation, one-year gasoline price inflation expectations, and one-year inflation expectations in the United States using a partially identified Bayesian structural vector autoregression model. Results show that headline inflation and one-year inflation expectations increased instantaneously in response to gasoline price

Investigating the crucial role of artificial intelligence in enhancing ESG performance is of utmost importance, particularly for advancing the energy transition. In this study, we utilise the wavelet-based quantile on quantile regression (QQR) to capture the evolving impact of the Artificial Intelligence Enabler Index (AII) on the Global ESG Index (ESGI). Based on raw data, AII's impact on ESGI varies

This paper investigates the effects of environmental policy on firms’ location and green innovation for a two-country, two-firm model. To address this issue, a two-stage game is solved. At the first stage, firms can choose between three actions: to stay in the home country and invest in a green technology; to stay in the home country and produce with the business-as-usual technology; or to move to

Using a regime change in the commercialization of university innovation in 1980 that strongly increased university incentives to patent and license discoveries, we document that an increase in the supply of commercializable innovation attracts venture capital investment to the region. The Bayh-Dole Act shifted ownership of intellectual property stemming from federally-funded research from the federal

Journal of Political Economy, Ahead of Print.

This paper aims to explore the gaps in previous research on renewable energy development in Sub-Saharan Africa by examining the impact of geopolitical and economic variables. The study focuses on the factors influencing renewable energy expansion, highlighting the significant progress made by African countries in enhancing their renewable energy capacity. The research employs panel data analysis to

We exploit the 2020 Treasury market shock to analyze how external and internal constraints impact arbitrageurs. Using regulatory filings, we find that hedge funds reduced arbitrage activities and increased cash holdings, despite stable credit and low contemporaneous redemptions. Creditors’ regulatory and liquidity constraints were not propagated to hedge funds through repo—Treasury arbitrageurs’ predominant

Energy firms, given their importance to overall economic activity, are increasingly seen as sources of systemic risk. Considering the relation of climate-change risk to energy sources, it is sensible to consider energy firms as vulnerable to climate-change. We investigate whether fintech development bolsters energy firms (valuations and dividends) as these firms face greater climate risk. Using an

This paper investigates the impact of different types of successful start-up exits on the development of entrepreneurial ecosystems (EEs). With a panel data analysis covering 45 European cities over 20?years, the study examines how acquisitions and IPOs influence subsequent individual investment activity and new venture creation. The results reveal that acquisitions significantly and positively influence

This study investigates how intra- and extra-territorial imports of energy transition minerals (ETMs) by the 27 Member States of the European Union respond to its energy transition parameters amidst the interplay of financial stress, mineral prices, electoral and political governance, and geopolitical turmoil. It utilizes monthly data from January 2004 to December 2023, also subdivided into two distinct

This paper develops a measure of performance for pumped hydroelectric plants that accounts for uncertainties in the production environment. This uncertainty is characterised in terms of different possible states of Nature (e.g., amounts of rainfall). The decision-making process of plant managers is then broken into two stages. In the first stage, plant managers must choose variable inputs (e.g., labour

The escalating global energy demand, coupled with the urgency of climate change, underscores the necessity for innovative approaches to achieve energy resilience and security. This study critically examines the interrelationship between global supply chain breadth, digital transformation, and energy resilience, addressing the key themes of this special issue across different aspects of energy security

This study investigates the evolving interplay between environmental governance and sustainability outcomes, employing dose-response analysis to underscore the necessity of accounting for these interdependencies in formulating climate and emissions policies. Our empirical evidence indicates that regulatory measures are pivotal in advancing sustainability within OECD countries, though their effects

We use car registration data from 2000 to 2021, as well as price lists and tax rules, to evaluate Norway’s incentives for consumers to choose electric vehicles. These include taxes on fossil fuels, EV exemption from car purchase taxes, and other incentives, like discounts on road tolls. We find that undoing the incentive with the largest effect, the EV exemption from purchase taxes, would reduce the

Despite the extensive array of realized measures, there is no consensus on the optimal choice for forecasting oil price volatility. In this study, we examine the performance of 104 realized measures, with a particular emphasis on comparing these more sophisticated realized measures against the simple 5-min Realized Variance (RV). Our main findings are as follows: (1) The 5-min Realized Semivariance

Environmentally sustainable development necessitates striking a balance between reducing carbon emissions and fostering economic growth. Despite their role in shaping both environmental and economic performance outcomes, energy consumption patterns and their impact on sustainable growth have not received the attention they deserve in the performance assessment literature. Approaches used to model production

We study how information disclosure concerns shape the choice of limited partners (LPs) by venture capitalists (VCs). Late-2002 court rulings prevented public LPs from providing confidentiality to investment managers. The best-performing VCs, but not other managers, responded by excluding public LPs from their new funds. Lost access reduced public LP returns by $1.6 billion relative to $14 billion