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We study the impact ofQuickpay, a federal reform that indefinitely acceleratedpayments to small business contractors of the U.S. government. We find a strong di-rect effect of the reform on employment growth at the firm-level. Importantly, how-ever, we also document substantial crowding out of non-treated firms’ employmentwithin local labor markets. While the overall net employment effect was positive,it was close to zero in tight labor markets – where crowding out was stronger. Ourresults highlight an important channel for alleviating financing constraints in smallfirms, but also emphasize the general-equilibrium effects of large-scale interventions,which can lead to lower aggregate outcomes depending on labor market conditions.

L’évaluation et le contrôle budgétaire sont les conditions nécessaires au consentement à l’impôt et donc à la solidité du contrat social. Au fil des ans la France s’est dotée d’instruments puissants, mais incomplets. Pour les compléter, il est proposé la création d’une agence parlementaire d’évaluation. Sans aller jusque-là, d’autres initiatives parlementaires récentes sont de nature à renforcer l’évaluation et le contrôle en France.

In this paper, we investigate how globalization is reflected in asset prices. We use shipping costs to measure firms' exposure to globalization. Firms in low shipping cost industries carry a 7% risk premium, suggesting that their cash flows covary negatively with investors' marginal utility. We find that the premium emanates from the risk of displacement of least efficient firms triggered by import competition. These findings suggest that foreign productivity shocks are associated with times when consumption is dear for investors. We discuss conditions under which a standard model of trade with asset prices can rationalize this puzzle.

We estimate the causal effect of state-mandated business closures on economic and health outcomes in the context of the COVID-19 crisis in the US. We first show that business closures lead to a substantial drop in sales, earnings, and market values for affected firms. We then exploit sectoral variations in exposure to these restrictions across areas within the same state, and show that locking down 10% of the labor force is associated with a significant contraction in employment, but allows to reduce COVID-19 weekly infection and death rates by respectively 0.023 and 0.0015 percentage points. The findings translate into 24,000 saved lives for a cost of $115 billion. Finally, our empirical analysis suggests that the cost per life saved associated to business closures could have been significantly reduced if restrictions had targeted areas with intense workplace interactions

This paper studies whether and how the contractual horizon of venture capital funds affects their investments in innovative firms. I find that funds with a longer remaining horizon select younger companies at an earlier stage of their development, which grow their patent stock significantly more than companies financed by funds with a shorter horizon. The sensitivity of investment decisions to horizon is stronger among experienced venture capital firms, who allocate investments across a larger number of fund vintages. Finally, I find that the interaction of funds’ fixed horizon with their option-like compensation structure affects their investment decisions: when early performance has been high, fund managers target less innovative companies. These findings shed light on the drivers of venture capital investment decisions and on their implications for the type of companies that receive venture capital financing. This paper was accepted by Gustavo Manso, finance.

Long payment terms are a strong impediment to the entry and survival of liquidity-constrained firms. To test this idea and its implications, I consider the effect of a reform restricting the trade credit supply of French trucking firms. In a difference-in-differences setting, I find that trucking firms' corporate default probability decreases by 25% following the restriction. The effect is persistent, concentrated among liquidity-constrained firms, and not offset by a decrease in profits. The restriction also triggers an increase in the entry of small trucking firms.

© 2016 Elsevier B.V.. This paper examines the extent to which individual investors provide liquidity to the stock market and whether they are compensated for doing so. We show that the ability of aggregate retail order imbalances, contrarian in nature, to predict short-term future returns is significantly enhanced during times of market stress, when market liquidity provisions decline. While a weekly rebalanced portfolio long in stocks purchased and short in stocks sold by retail investors delivers 19% annualized excess returns over a four-factor model from 2002 to 2010, it delivers up to 40% annualized returns in periods of high uncertainty. Despite this high aggregate performance, individual investors do not reap the rewards from liquidity provision because they experience a negative return on the day of their trade and they reverse their trades long after the excess returns from liquidity provision are dissipated. During the financial crisis, French active retail stock traders stepped up to the plate, increased stock holdings, and provided liquidity. In contrast, mutual fund investors fled from delegation by selling their mutual funds.

We analyze the effect of import competition on household balance sheets from 2000 to 2007 using individual-level data on leverage and defaults. We exploit cross-regional variation in exposure to foreign import competition using industry level shipping costs and initial differences in regions' industry specialization. We confirm the adverse effect of import competition on local labor markets during this period (Autor et al. 2013). We then show that household debt increased significantly in regions where manufacturing industries are more exposed to import competition. A one standard deviation in exposure to import competition explains 30% of the cross-regional variation in the growth in household leverage over the period. Our results highlight the interaction of credit supply and demand as a driver of increased mortgage borrowing in the run-up to the financial crisis.

In 2011, the federal government accelerated payments to their small business contractors, spanning virtually every county and industry in the US. We study the impact of this reform on county-sector employment growth over the subsequent three years. Despite firms being paid just 15 days sooner, we find payroll increased 10 cents for each accelerated dollar, with two-thirds of the effect coming from an increase in new hires and the balance from an increase in earnings. Importantly, however, we document substantial crowding out of non-treated firms employment, particularly in counties with low rates of unemployment. Our results highlight an important channel through which financing constraints can be alleviated for small firms, but also emphasize the general-equilibrium effects of large-scale interventions, which can lead to a substantially lower net impact on aggregate outcomes.

We investigate how globalization is reflected in asset prices. We use shipping costs to measure U.S. firms’ exposure to globalization. We find that firms in low shipping cost industries carry a 7.8 percent risk premium, suggesting that their cash-flows covary negatively with U.S. investors’ marginal utility. To understand the origins of this globalization risk premium, we develop a dynamic general equilibrium model of trade and asset prices. Guided by the model, we find that the premium emanates from the risk of displacement of least efficient firms triggered by import competition. These findings suggest that foreign productivity shocks are associated with times where consumption is dear for U.S. investors.

Financial strength enhances firms' ability to extend trade credit, which confers a comparative advantage in the product market. To test this idea and its implications, I consider the effect of an exogenous restriction on the trade credit supplied by French trucking firms. In a difference-in-differences setting, I find that trucking firms' corporate default probability drops by one-fourth. The effect is persistent, concentrated among financially constrained firms, and not offset by a drop in profits. The reform also triggers an increase in the entry of small trucking firms, which are as efficient as those set up prior to the reform. Overall, the results indicate that long payment terms are a strong impediment to the entry and survival of constrained firms.

This paper studies whether and how the contractual horizon of venture capital funds affects their investments in innovative firms. I find that funds with a longer remaining horizon select younger companies at an earlier stage of their development, which grow their patent stock significantly more than companies financed by funds with a shorter horizon. The sensitivity of investment decisions to horizon is stronger among experienced venture capital firms, who allocate investments across a larger number of fund vintages. Finally, I find that the interaction of funds' fixed horizon with their option-like compensation structure affects their investment decisions: when early performance has been high, fund managers target less innovative companies. These findings shed light on the cash management practices of venture capital funds, and on their implications for the type of companies that receive venture capital financing.

This paper uses a new dataset and a specific feature of the French stock exchange to study the behavior of individual investors actively trading stocks. Consistent with prior literature, the trading activity of individual investors increases (decreases) following high (low) performance. I carefully split individual investors' performance into (i) performance related to the exposure of their trades to systematic risk factors such as the market premium, the excess returns on small stocks and the excess returns on value stocks, and (ii) residual performance. I show that trading activity reacts to both (i) and (ii) and that this does not seem to be explained by any strategic behavior. Instead, a simple model where individual investors are ex ante uncertain about their ability and factor exposure and trade to learn about them generates predictions consistent with the above evidence as well as additional predictions about learning dynamics that are also borne out by the data.