About Me

This paper shows that self-employment shapes labor market power in low-income countries, with implications for industrial development. Using Peruvian data, we find that wage-setting power increases with employer concentration but less so where self-employment is more prevalent. A general equilibrium model shows that in oligopsonistic labor markets, self-employment raises the supply elasticity of wage labor, weakening employer market power. However, by the same mechanism, procompetitive policies aimed at expanding wage employment and reducing reliance on self-employment may unintentionally strengthen labor market power, undermining their objectives.

We show that short-term liquidity can be a source of competitive advantage by enabling firms to invest in intangible assets. Our analysis leverages a French reform that capped payment delays in trade credit contracts, which generated quasi-experimental variation in corporate liquidity across manufacturing firms. Higher liquidity led to significantly greater investment in intangibles, which, in turn, raised markups and market shares. These results suggest a strategic role for liquidity in shaping firm performance, indicating that initial financial conditions can have lasting effects on productivity and market structure.

In U.S. firm-level data, large firms increase their spending on customer capital significantly more than small firms following an interest rate decline. We interpret this evidence in a model with product market frictions where heterogeneous firms strategically advertise to build a customer base. When a firm advertises, it shifts customers’ demand away from competitors. This externality is especially severe when firms have a sizable existing customer base, discouraging smaller competitors and making them less responsive to interest rate shocks. The model provides a rationale for the rise in market concentration and market power in recent decades, while interest rates fell.

We develop and estimate a structural model of bargaining in firm-to-firm trade to study the determinants of tariff pass-through. The model features oligopoly and oligopsony power and yields analytical expressions for bilateral markups and pass-through based on two sufficient statistics: the supplier’s share in the buyer’s purchases and the buyer’s share in the supplier’s output. Using U.S. import data, we find substantial importer bargaining power and steep export supply curves. These primitives imply that cost changes, rather than markup adjustments, dominate pass-through, accounting for the bulk of incomplete pass-through of the 2018 U.S. tariffs and its heterogeneity across buyer-supplier links.

Intermediate inputs are central to production costs and consumer prices, making their pricing a critical policy concern. This study makes two contributions. First, it links aggregate input markups to both exporter and importer concentration, showing how oligopoly and oligopsony power interact in global supply chains. Second, it develops network-based concentration measures that adapt traditional indices to reflect the rigidity of buyer–supplier links. Using Colombian import data from 2011–2020, we document rising exporter concentration alongside stable importer concentration. Our framework interprets these trends as evidence of rising markups, driven primarily by exporters’ market power. By contrast, conventional approaches that proxy markups with industry-wide seller concentration misrepresent these dynamics. By explicitly incorporating two-sided market power and the rigidity of trading relationships, our approach offers a more accurate and policy-relevant measure of markups in firm-to-firm trade, while preserving the tractability of standard concentration analysis.

This paper documents the market power of large buyers in foreign input markets, and evaluates its effect on the aggregate economy. I develop an empirical methodology to consistently estimate buyer power at the firm level, and apply it using longitudinal data on trade and production of French manufacturing firms from 1996–2007. My results show that the buyer power of large French importers is substantial, and concentrated in key sectors and firms. I then incorporate heterogeneous buyer power in a general equilibrium model of production, and show that it induces large distortionary effects on the aggregate economy, worth about 3% of gross manufacturing output in France. In spite of such output distortions, total real income in the economy increases, due to transfers of rents from foreign input markets. My analysis suggests that policies that spur import market integration can play a role in stimulating aggregate production.