Publications

The Effect of the Opioid Crisis on Patenting (with Alberto Ortega) (forthcoming at The Journal of Economic Behavior and Organization)

The opioid crisis in the United States has resulted in a dramatic increase in overdose deaths over the last two decades. This crisis has created an economic ripple affecting an important engine of growth: patenting. Using patent data from the United States Patent and Trademark Office (USPTO), we show a negative effect of opioid prescriptions on the amount of patenting that occurs in a county. Despite inventive activities being hampered by the negative economic effects that opioid misuse creates in an area, we also find evidence that the opioid crisis incentivizes inventors to relocate. Similarly, we find a reduction in the number of high-tech firms and STEM graduates. We also show that the opioid crisis dramatically reduces the number of white and non-white inventors.

Life of the Party: The Polarizing Effect of Foreign Direct Investment (with Alberto Ortega) (published in European Journal of Political Economy, vol. 72, 2022)

As countries are becoming increasingly connected with one each other, it is essential to study the influence multinational firms have on political outcomes in the countries where they locate. This paper examines the effects of foreign direct investment (FDI) on party vote shares in 149 countries between 1990 and 2017. We construct a database by cataloging political parties into specific political positions. We use a measure of linguistic distance between countries to construct a novel instrumental variable using the average exchange rate of the surrounding region. With this IV, we capture the relative attractiveness of FDI in host countries. Our results indicate that increased FDI causes an increase in vote shares for right-wing parties. We also find suggestive evidence of increased left-wing support in developing countries and legislative elections. We show that more moderate parties, specifically center-right parties, generally lose vote shares as FDI increases.

Innovative R&D Offshoring in North-South Trade: Theory and Evidence (published in The World Economy, vol. 44(4), pages 904-929, 2021)

This study proposes a general equilibrium model to describe innovative R&D location decisions by multinational firms. Using two countries, a developed North and a developing South, the model examines Northern firms employing researchers in the South in order to produce new varieties of a good. The Northern firms risk their product being imitated when offshoring research. Southern researchers may take in- formation learned while employed by the Northern firm and start their own competing firm. The model’s main predictions are supported empirically by a dataset constructed with US patent data. For high-tech industries, stronger IPR-protection in the South increases both industry-level and firm-level offshoring at a rate faster than low-tech industries. Southern import tariffs do not affect firm-level innovative R&D offshoring. 

Global Innovative R&D Offshoring with Heterogeneous Labor: The Role of IPR-Protection on Technology Transfer and the Brain Drain Effect (published in Southern Economic Journal, vol. 86(2), pages 691-725, October)

Using a North-South framework, this study proposes a theoretical general equilibrium model with multiple Northern firms offshoring innovative R&D to the South. Northern firms vary in ability to manage Southern researchers, and Southern researchers vary in quality. Southern researchers of higher quality are more productive but also more likely to leave the firm and start a competing firm through imitation of the product. A strengthening of Southern IPR-protection increases offshoring and innovation while eliminating employment opportunities for skilled Southern researchers. Therefore, stronger Southern IPR-protection contributes to the emigration of highly qualified researchers. The model predicts the effects of changes to the Northern country as a result of this increased emigration. Increases in Northern technology increase offshoring and innovation while decreasing the amount of technology transferred. The effect of an increase in Northern researcher quality depends on the elasticity of the Northern wage.

Explaining the Current Innovative R&D Outsourcing to Developing Countries (published in Journal of Industry, Competition and Trade, vol. 19(2), pages 211-234, June)

While multinational firms from developed countries have used researchers from emerging areas to assist in the adaption of an existing product, few multinational firms have carried out innovative R&D, or R&D for the creation of a new product, in these areas. Using the threat of imitation and wage differences of researchers across regions, this study proposes a partial equilibrium model to explain the lack of innovative R&D in developing countries. I build a North-South model examining a single firm’s choice of research locations. The model predicts that weak IPR-protection in developing countries does not necessarily explain the lack of Southern research. In some situations, reduced IPR-protection can even increase Southern research. Harsh competition resulting from information leaks coupled with weak IPR-protection can explain much of the lack of innovative research investment in the developing world. My model also predicts that firms with low research needs, or firms in low-tech industries, locate their R&D in the North. Firms with medium research needs locate in both countries while the firms with the largest research needs, or firms in high-tech industries, locate research in just the South.

Working Papers

Local Innovation as a Response of Import Competition

Import competition from Chinese firms in the early 2000s caused massive economic disruptions in US counties that had high manufacturing employment. Instead of completely collapsing, these areas reinvested in a key engine of local growth: innovation. Using patent data from the United States Patent and Trademark Office, I exploit US tariff policy and China’s ascension to the World Trade Organization to find that import competition encouraged innovation. Import competition also resulted in relatively larger percentage increases for non-white inventors, Hispanic inventors, and female inventors. I also find evidence of two mechanisms by which import competition affects innovation. First, larger firms, or those likely to be technological leaders, drive the increase in patenting by leverage their market position to increase their own innovation when faced with import competition. Second, the increase in innovation is partly caused by an increase in enrollment in engineering and physics programs at local universities.

Endogenous IPR-Protection in North-South Trade with R&D Offshoring

This study proposes a North-South theoretical model where Northern multinational firms offshore innovation to the South to increase the chances of successful product creation. These Northern firms risk information leakages when offshoring in the weak IPR-environment of the Southern region. Northern firms can lobby the Southern government to increase IPR-protection. The government of the South then sets their IPR policy in order to maximize Northern firm contributions and Southern welfare. High- tech Northern firms engage in more offshoring of R&D to the South but less lobbying for IPR reform. When other channels exist to protect an innovation, the Southern government sets weak IPR-protection policy unless there is a large degree of lobbying from Northern firms. Finally, a Southern government that is more willing to change policy in exchange for cash transfer, or a more corrupt government, induces more offshoring.

Journaling and Economic Teaching (with Kylie Jaber, Kevin Meyer, Kellie Konsor)

Students experience stress when taking a university economics course. While stress can benefit the student by providing motivating to learn and practice the material, overly stressed students will find it difficult to concentrate and build critical thinking skills. The research goal of this project is to measure student stress levels in individual economics classes and estimate the relationship between stress and learning outcomes. In addition, some classes will have the students write journal entries before stressful events, such as exams, to observe whether becoming more aware of stress levels has a positive effect on grades.

International Lobbying for IPR Reform: The Effect on R&D Offshoring to the Developing World

As the world becomes more globalized, multinational firms based in the United States have begun seeking research and development (R&D) from inventors in countries outside of the US. Recently, these firms have also begun using R&D workers from emerging economics with relatively weak intellectual property rights (IPR) protection. Offshoring R&D to these areas then exposes firms to the risk of product imitation. In order to mitigate this risk, US firms have lobbied the US government to negotiate with other countries to strengthen their IPR laws. Using publicly available data from the United States Patent and Trademark Office, this paper collects the number of inventors from emerging countries that each US multinational firms employs each year. This data is then combined with lobbying data from the Senate’s Office of Public Records. This paper shows that firms who have already lobbied the US government in this regard are more likely to reduce their R&D offshoring to the developing world while spreading their innovation network over multiple countries.

Work in progress

Terrorism and US Multinational Activity

Terrorism and conflict have been shown to deter multinational firm activity due to an increased risk.  In this paper, we explore the effect that US multinational firm activity has on terrorism within a host country.  Increased investment from multinational corporations can expand some industries while contracting others.  Thus, increased US multinational firm activity could increase goodwill towards the government while also fostering contempt.  We use data on terrorist activity in 154 countries from 1997 to 2016 along with US multinational investment data from the BEA.  We use a measure of linguistic distance between English and a host country’s primary language as an instrumental variable in our analysis.

Fragmenting Innovation:  The Effect of Offshoring R&D on Welfare in a Multi-Country Model

Using a general equilibrium model, this study determines the effect of fragmenting innovation across developed countries and developing countries as a method of protecting an innovation.  As multinational firms start using more researchers from developing areas to decrease labor costs, the firm must employ strategies to prevent the imitation of new products.  Multinational firms protect their innovations by fragmenting the innovation process between multiple different sites.  Therefore, no one employee has access to all of the knowledge required to make the new product.  In this model, firms locate research and development (R&D) tasks in their home country and also have the opportunity to locate in a number of other host countries, which differ in their knowledge profiles.  The probability of imitation decreases as firms fragment their R&D tasks; however, focusing tasks in a developing country increases the probability of imitation.  The model explores the effects of a number of exogenous shifts on welfare.

Increases Misogynistic caused by Trade

Colocation of R&D and Production Offshoring in North-South Trade

Marijuana Reform’s Effect on Innovation (with Alberto Ortega)

Foreign Direction Investment and Political Ideology (with Alberto Ortega)