Tasaneeya Viratyosin

Working Papers and Works in Progress

Innovation Spillovers Along the Supply Chain (Job Market Paper)

This paper provides a novel framework to understand how innovation spillovers propagate through dynamic supply chain relationships. I document that supply chain relationships impact R&D expenditure and that innovation influences supply chain relationship formation. I introduce a dynamic, heterogeneous-firm model that endogenizes many-to-many supply chain relationships and innovation in general equilibrium. Complementarity in quality of supply chain inputs generates positive sorting and innovation spillovers that increase innovation incentives and widen disparities between high and low quality firms. I validate the model using quasi-exogenous variation from R&D tax credits and show that innovations by supply chain partners predict increases in R&D, firm value, and returns to R&D. A 1 p.p. increase in innovation from a firm's downstream network corresponds to a 1.3 p.p. and a 0.27 p.p. increase in R&D intensity from trade relationships and knowledge spillovers, respectively. In the calibrated model, bidirectional spillovers across endogenous supply chains account for one-fifth of aggregate output.

The Slowdown of Technology Diffusion

This paper introduces a new measure of technology diffusion—the average age of technology cited by firms or patents—to capture the speed at which ideas propagate across firms. I document that the speed of technology diffusion has declined over the past two decades: the average age of a patent’s technology base has risen from 4.5 years in 1998 to between 6 and 6.5 years in the past decade. In the cross-section, I show that greater firm-level R&D investment predicts faster diffusion: patents built on newer technology command a higher market value and have greater technological value (as measured by citations), and firms that file patents built on newer technology are more valuable. Consistent with labor market movements driving technology diffusion, I exploit state-level variation in the removal of inevitable disclosure doctrines and find that the resulting increase in labor market mobility was associated with greater technology diffusion across competing firms within the same geographical area but reduced diffusion within firms, suggesting that firms responded to the threat of trade secret leakage by limiting internal information spillovers. The concurrent decline in labor market mobility observed in the U.S. economy may be an important contributor to the slowdown in technology diffusion and productivity growth observed in recent decades.

Local Power, Global Reach: The Influence of Deposit Market Power on International Banking
(joint with Sergey Sarkisyan)

We provide causal evidence that local market power in deposit markets drives international transmission of US monetary policy through global banks. After a contractionary monetary shock, global banks with local deposit market power increase bank deposit spreads and experience outflows of domestic deposits. They increase flows from foreign branches to finance domestic lending but reduce lending abroad, thus cutting domestic lending less than local banks: a 1 p.p. monetary shock leads to $180 billion in flows from foreign branches to US offices. Our estimates indicate that local deposit market power is critical in explaining the international transmission of US monetary shocks.

Published/Forthcoming

The Unprecedented Stock Market Reaction to COVID-19
The Review of Asset Pricing Studies, 2020.
(joint with Scott Baker, Nicholas Bloom, Steven J. Davis, Kyle Kost, and Marco Sammon)
NBER version

No previous infectious disease outbreak, including the Spanish Flu, has affected the stock market as forcefully as the COVID-19 pandemic. In fact, previous pandemics left only mild traces on the U.S. stock market. We use text-based methods to develop these points with respect to large daily stock market moves back to 1900 and with respect to overall stock market volatility back to 1985. We also evaluate potential explanations for the unprecedented stock market reaction to the COVID-19 pandemic. The evidence we amass suggests that government restrictions on commercial activity and voluntary social distancing, operating with powerful effects in a service-oriented economy, are the main reasons the U.S. stock market reacted so much more forcefully to COVID-19 than to previous pandemics in 1918–1919, 1957–1958, and 1968.

References

Awards

Jacobs Levy Equity Management Dissertation Fellowship in Quantitative Finance