Working Papers



Abstract: This paper studies the impact of e-commerce platforms on firms’ market power. I present a model with firm heterogeneity, oligopolistic competition, and Input-Output linkages, in which firms use the platforms to lower their variable costs. The cost reduction can occur either (i) as a result of efficiency gains or (ii) via direct discounts on input prices. The increasing use of platforms contributes to the rise of market power because it transforms the cost structure of the firms. Platform users show lower marginal costs but higher overhead costs: since the benefits of the marginal costs reduction outweigh the increase in overhead costs, this gives them a competitive advantage, explaining the increase in market power. Once calibrated to US data, the model attributes one third of the increase in markups to the introduction of e-commerce platforms. At the sectoral level, the heterogeneity in platforms use explains up to 40% of the differences in market power trends across sectors.



Abstract: We study how corporate tax reforms affect the distribution of resources across firms. Using a model with firm heterogeneity, motivated by a Dutch fiscal reform, we test whether a lower tax rate and reduced investment deductibility improve allocative efficiency. We find that aggregate productivity rises and misallocation falls, driven by a reallocation of capital from medium-large firms to the largest and most productive. The tax cut benefits top firms most, enabling their expansion, while the deductibility reduction disproportionately burdens medium-large firms, which invest more intensively, on average, than other firms.



Abstract: This paper investigates how rising overhead costs of production affect market outcomes across sectors with different degrees of input complementarity. Using Dutch administrative firm-level data from 2006–2018, we document sectoral heterogeneity in markups’ dynamics, which we attribute to variations in ICT investment. We estimate the elasticity of substitution between capital and labor, finding stronger complementarity in sectors that invest more in ICT. A two-sector model with heterogeneous firms and oligopolistic competition shows that higher overhead costs reduce the number of firms able to break even, leading to a contraction in output, lower wages and marginal costs. In sectors with stronger complementarity, lower wages translate into larger marginal cost reductions, boosting profits and markups while reducing the labor share. The model replicates key empirical patterns, including asymmetric markups’ growth—explaining 37% of the increase in ICT sectors and 43% in non-ICT.


Work in Progress



[First draft soon! Slides available upon request]