projects

I study the impact of vertical integration in the market for genetically engineered (GE) cotton seeds in the United States. Exploiting Monsanto's acquisition of the leading cotton seed producing firm (Delta and Pine Land) in 2006, I show that (i) the vertical merger raised the prices that Monsanto charged its rival cotton seed breeders to license its GE technology and (ii) yields increased for products sold by the vertically integrated company relative to those sold by non-integrated firms. To quantify the welfare impacts of these two opposing forces, I develop a structural model of demand and supply for cotton seeds. My model accounts for bargaining between an upstream technology provider and downstream cotton breeders as well as quality improvements. I use this model to study the welfare impact of vertical integration and to estimate counterfactual outcomes without integration and without DOJ mandated divestitures.

Regulating the price of productivity-enhancing inputs can allow governments to facilitate the diffusion of existing technologies but deter private firms from innovating and introducing superior technologies. This project studies the demand and supply-side consequences of price controls on genetically engineered (GE) cotton seeds in India. Leveraging the differential timing of this policy across states, we show that the government-mandated price reduction increased farmers’ adoption of GE seeds by 20pp and decreased the costs of cultivating cotton by 20%. Although cotton seed firms did not incur significant losses in the short term, the number of new hybrid varieties introduced by these firms fell abruptly in the aftermath of the policy, leading farmers to use older seeds. Using newly assembled data from experimental field trials across India, we show that: (i) cotton varieties lose 6% of their yield yearly; (ii) agronomic yields of new varieties worsen by 30% in price-controlled states. To quantify the overall welfare impact of the policy, we develop a structural model of demand and supply for seeds that allows for endogenous quality.

This paper adds to the ongoing debate on the effects of public funding programmes on business innovation. This policy instrument, based upon a simple but a robust rationale, has been applied in an almost homogeneous manner in different contexts, but evidence from such experiences shows heterogeneous effects. The main contribution of this paper is that it shows the limitations faced by public funding instruments in affecting a traditionally low innovative pattern. Using panel data techniques, we find heterogeneous effects of public funding on the innovation behaviour of Uruguayan firms between 2001 and 2015. Our results show that, after a strong public policy effort, the critical mass of innovative firms has hardly changed. Input additionality effects of public funding in private innovation investment are found, but only for innovation activities based on the acquisition of embodied knowledge. Moreover, we obtain some evidence of behavioural additionality in process and organizational innovation leading to higher productivity levels, but we find no effects on interaction for innovation.

This article studies the impact of entry regulation on the market structure of the retail sector. I show that a reform that increased the statutory cap on the number of pharmacies in Italian cities is not sufficient to remove the distortions brought about by entry regulation; the new cap becomes binding two semesters after the reform. I exploit variation in the reform’s intensity to provide suggestive evidence that regulation shielded incumbents from additional competitors. Using a structural model of entry, I find that full liberalization would increase the number of firms by 60% and increase the number of cities with more than one pharmacy by 130%. I assess the model’s predictive accuracy by comparing postreform outcomes with simulated ones to find that it correctly forecasts market structure in half of the cities affected by the reform.

This paper combines a spatial discontinuity design with differences-in-differences to evaluate the effects of a program which grants place-based subsidies to residential construction on the location of housing developments in Montevideo, the Uruguayan capital, using administrative municipal data over the period 2007-2015. The results reveal that the policy has a sizeable and statistically significant impact on the location of residential construction. Also, findings indicate that the policy increases the average size of residential projects. The policy's impact on the densification of the city, however, is heterogeneous. Finally, the evidence on spillovers on non-subsidized zones is mixed.