PUBLICATIONS:

Democratization, Leader Education and Growth: Firm-level Evidence from Indonesia (joint with Steven Poelhekke; Journal of Economic Growth, Volume 28, Issue 4, December 2023) Online Appendix Replication files VoxDev

Abstract: Does the economic success of democratization depend on newly elected leaders’ characteristics? We exploit the unique Indonesian democratization process, where districts exogenously democratized in different years. In a census of manufacturing plants, employment drops by 5% in districts that elect a non-college educated mayor, while employment stays constant under college graduates. Non-college educated mayors substantially raise taxation but provide less infrastructure, do not spend more on social programs, and are more often involved in corruption cases. Other leader attributes and district characteristics, as well as tests for pre-treatment trends, for selection on unobservables, and for close elections do not explain away the important role of leaders’ education in shaping local policies and growth.

Capital Regulations and the Management of Credit Commitments during Crisis Times (joint with María Teresa Valderrama. Review of Finance, Volume 27, Issue 5, September 2023) Online Appendix SUERF Policy Note

Abstract: Borrower drawdowns on credit commitments reduce a bank’s capital buffer. Using Austrian credit register data and exploiting the 2008–09 financial crisis as an exogenous shock to bank health, we provide novel evidence that capital-constrained banks manage this risk by cutting credit commitments that are not fully used. Controlling for their capital position, we find that banks also respond to liquidity problems by cutting such commitments. However, banks manage the capital and liquidity risk posed by undrawn credit in a way that limits negative macroeconomic implications: credit cuts are targeted at financially less constrained firms, and we show that borrowers of more-affected banks can substitute lost credit with credit from other banks and do not suffer real effects. Additional findings suggest that voluntary agreements between constrained banks and strong firms to reduce spare borrowing capacity can explain why strong firms experience larger credit cuts.

Good mine, bad mine: Natural resource heterogeneity and Dutch disease in Indonesia (joint with Steven Poelhekke. Journal of International Economics, Volume 131, 103457, 2021) Online Appendix Replication files Open Access Link Final version with larger font

Abstract: We analyse the local effect of exogenous shocks to the value of mineral deposits at the district level in Indonesia using a panel of manufacturing plants. We introduce heterogeneity in natural resource extraction methods, which helps to explain the mixed evidence found in the `Dutch disease’ literature. In areas where mineral extraction is relatively capital-intensive, mining booms cause virtually no upward pressure on manufacturing wages, and both producers of traded and local goods benefit from mining booms in terms of employment. In contrast, labor-intensive mining booms drive up local manufacturing wages such that traded-goods producers reduce employment.

WORKING PAPERS:

Local Booms and Innovation (joint with Federica Coelli) CEPR DP20317  EBRD WP307  NHH DP FOR20/2025

Abstract: Using oil and gas shocks as an exogenous source of business cycles at the U.S. commuting zone level, we provide novel evidence that local booms increase local patenting, especially in non-metropolitan areas. This reflects agglomeration economies that make incumbent inventors more productive. In contrast to total patenting, innovation in oil and gas – the sector closest to the boom – is countercyclical, consistent with higher opportunity costs of innovation in a booming industry. Our findings shed new light on the spatial dimension of innovation, inform recent debates on place-based industrial policy, and help to reconcile mixed evidence on the cyclicality of innovation.

The (Un)Intended Consequences of Export Restrictions: Evidence from Indonesia (joint with Maarten Bosker, Steven Poelhekke, and Else-Marie van den Herik) CEPR DP20791 Online Appendix VoxEU

Abstract: An increasing number of developing countries are restricting non-renewable natural resource exports to encourage domestic processing, move up the global value chain, and spur local development. This paper studies the local labor-market effects of Indonesia’s voluntary export ban on unprocessed nickel and bauxite in 2014, previously a major source of export revenue. Exploiting plausibly exogenous variation in the timing of the ban, opening of new processing facilities, and the location of Indonesia’s mineral deposits, we find that—after an initial dip—major investments in nickel processing increased employment in nickel mining districts. New smelters drove structural change, shifting jobs from agriculture to mining and manufacturing. In sharp contrast, the ban only led to very limited investment in bauxite processing, causing bauxite production and local employment to fall. We also find that nickel processing raised mining employment in Indonesia’s coal districts, which provide the main source of energy for nickel processing.

WORK IN PROGRESS:

Restricting raw material exports (funded by NWO Open Competition M, €400k, 2023-2027; joint with Steven Poelhekke (Principal Investigator), Maarten Bosker, and Else-Marie van den Herik)

The geoeconomics of critical minerals; joint with Esther Ann Bøler, Jason Garred and Chenying Yang

Politics in Financial Intermediation: Evidence from Brazil (joint with Thorsten Beck, Matias Ossandon Busch, and Steven Poelhekke)