Research projects 2019

1. Export by the Russian firms: From Cargo Shipments to Country-Level Trade Flows

In this project we study how the individual cargo shipments made by firms and the transportation mode of these shipments determine the aggregate trade flows. The goal of our study is to trace the role of the exact distance between Russian exporting firms and their foreign partners in the way they trade with each other. Our preliminary results show that the Russian firms send more valuable goods to their partner firms located at farther distances but the rate of such shipments declines with distance. We will show that this result is consistent with Chaney's (2016) aggregation of firm level trade flows at the country level, yet when the cargo shipments are aggregated to the firm level the Chaney's (2016) results are violated. Together our preliminary evidence shows that cargo shipments are the key disaggregate economic variable of interest for understanding the international trade flows.

2. Exogenous Information Shock and Dividend Payout Policies: Evidence from IFRS Adoption

We study changes in firms’ dividend policies in response to improved information environment between investors and firms, enabled by IFRS adoption. Following mandatory adoption of IFRS, firms with low growth opportunities exhibit higher propensity of paying dividends. On the other hand, those with high-growth opportunities exhibit reduced propensity of paying dividends. In addition, we show that these results are stronger for firms that exhibit higher change in information asymmetry between shareholders and the firm.

3. The Financial Model of the Possibility of the Chilean Default

In this study we investigate the interaction of the monetary and macroprudential policies for the small open economy. We obtain the solution for the optimal regulatory policy of the Central Bank in response to exogenous shocks that would offset them and stabilize the economy. 

4. Market Structure and the Limits of Arbitrage

The main goals of the paper are i) to understand the effects of financial constraints (margins) on large traders with market power, and ii) to compare – for a given level of capital – the pricing and welfare properties of the economy under two market structures of the arbitrage industry: perfectly competitive, with capital being spread over a large number of price-taking arbitrageurs, and monopolistic, with capital concentrated in a single arbitrageur.