Energy & Environment 

This paper develops a new empirical and theoretical approach to studying network effects in the diffusion, or internal firm adoption, of new technology. The empirical model devises a two step method which first categorizes geographies based on a spatial panel or network model. Then, it compares firm behavior across these categories when there is an exogenous change in information flow that affects all areas. The case study in the American oil \& gas fracking revolution documents novel results that firm adoption of new technology is more sensitive to an increase in usable knowledge in highly networked areas. I then propose a theoretical framework for understanding diffusion as a dynamic transition process which can explain these empirical trends. I take a classic model of firm investments  and incorporate a technology adjustment dimension. The model predicts different rates of aggregate technology diffusion depending on whether the firm confronts the technology problem holistically or as separate business lines. I show that true technology transition where old technology is endogenously retired are not always possible (which is of particular concern in industries critical for the energy trnasition). Spillovers in productivity efficiency  are more likely to result in higher diffusion levels as opposed to spillovers in lowering adjustment costs. I show empirically testable implications using the heterogeneous response across firm size and specialization. 

Aggregate Technological Change: The joint effect of firm heterogeneity & knowledge spillovers

In the presence of knowledge spillovers, the distribution of firm types becomes an important input in the process of aggregate technology improvement. Firms are heterogeneous in where they choose to invest as well as how much they are able to invest. Using recentered influence function regressions, I provide empirical evidence for these differences in the American oil & gas industry. I show the effect of changing the distribution of firms on each part of the technology distribution and compare that effect across regions with different knowledge sharing propensity. The higher quantiles of the technology distribution is shown to be positively affected by distributions with higher average firm skills while the lower quantiles are negatively impacted. On the other hand, when the average firm size is higher, the median part of the technology distribution is positively impacted while both the quantiles on either end are either negative or neutrally impacted by the distribution of firm size. 

 Innovation & Growth

Shared Intangibles & Technology Adoption: A heterogeneous firm model

I build a heterogeneous firm model of technology adoption. Firms have the choice to produce a single final good using two different types of capital. Firms jointly solve an investment problem as well as stopping time problem which determines their technology specialization rate. The key spillover mechanism is captured in the function governing the productivity of new type capital which includes both the firm's own experience and the aggregate industry-wide experience as an input. I study the comparative statistics  for economies with different knowledge sharing and learning propensities. I show that the spillover mechanism alone can generate the gradual adoption patterns often observed empirically. At the same time, learnng by doing within firms does not result in the same transition patterns.

(coming soon, preliminary draft available upon request)
The plot shows transition dynamics for an economy that starts with very few firms using the new type technology. The different lines show comparative statics of economies with dfferent shared knowledge and own learning propensities.

 Household & Real Estate

Do Intermediary Constraints Matter? Evidence from Household Finance

(available upon request)

Using servicers in the mortgage backed security market, I show that constraints placed on intermediaries through a specific channel, mortgage advances, has a statistically significant impact on loan outcomes even after controlling for borrower factors like credit score. Using a loan level dataset, advance behavior is shown to affect foreclosure timelines, a previously unexplored area. The probability of a mortgage resolving through borrower payoff rather than foreclosure, as well as the loss amount on liquidated mortgages is also shown to be affected by differences in the servicer's advance propensity. 

The Image shows the the ratio of advances conditional on rolling over into 90 dpd and distress between bank and non-bank servicers. Starting in 2010, the probability that a bank chooses to advance conditional on a homeowner entering distress diverges between the bank types. 

 Other Work

Robust Regimes: the direct impact of model uncertainty

Hansen-Sargent models of robustness consider agents who are concerned with model misspecification. Detection error probabilities are sometimes used to train the amount of uncertainty with which agents should be worried. I propose a method to empirically estimate the impact of model misspecification on decisions. For a set of models with distorted transition matrices relative to the estimated (approximating) model, I show that the set of models which are statistically difficult to distinguish is not monotonic in the size of the distortions applied. For any level of detection error tolerated, forecasts which incorporate all models in that set outperform the approximating model regardless of the distortion size. Finally, the larger the forecast differences between the approximating and distorted models, the larger the impact on the probability that firms execute on long term real options. By contrast, short term decisions do not show as strong of an effect when the set of indistinguishable models imply smaller forecast differences. The method directly incorporates not just potential model misspecification but the  forecast implications between models.