Research
Working Papers
Mergers and Acquisitions, Market Power, and Efficiency (JMP)
Abstract
Mergers and acquisitions (M&A) can cause large changes to industry concentration and firm productivity. I develop a general equilibrium model of imperfect competition where firms can merge with other firms to analyze the impact of M&A on industry structure, firm productivity, and aggregate outcomes. By structurally estimating the model, I find the aggregate level and dispersion of markups that can attributed to M&A supports the view that mergers drive higher market power and do not result in large productivity-enhancing synergies. Despite this, counterfactual analysis shows that mergers tend to increase aggregate productivity and output as they reduce misallocation by reducing the overall dispersion of markups, both within and across industries. Despite a rich one-to-one roommate matching process to determine who merges with whom, I am able to characterize the pattern of matching and detail cases of the model that admit analytically tractable solutions.
Multinational Production, Trade, and the Global Diffusion of Knowledge (with Minyoung Song)
Abstract
We develop a model of international trade and multinational production (MP) to study their effects on knowledge diffusion and productivity growth. We find that by modeling firms as able to undertake MP, the implied idea diffusion and productivity growth will be greater in all countries. This allows our idea diffusion model to better account for productivity growth over the last century. Through MP rates of learning, we find that the effects of changes trade costs and MP costs have complex interactions and map non-monotonically to rates of learning. We also find that micro details about the learning process matter significantly for determining whether changes in cost structure will lead to a diversion in trade/MP that is growth enhancing.
P.S. My surname is pronounced me-low-sahv-yeStrictly speaking, instead of 'ye' it should be a 'ʎe' where 'ʎ' sounds like the 'll' in 'million'.-vich. Calling me Milos is fine too.
