Job Market Paper

Abstract   This paper studies the lack of resilience of global pharmaceutical supply chains since 2009 and the extent to which the offshoring of manufacturing plants to South-East Asia is driving persistent drug shortages in the United States. I build a novel dataset that, for the first time, allows to determine the exact manufacturing location of drug products sold in the U.S. The data solve the traceability issue in the market and enable me to document new empirical evidence on the causal impact of offshoring on decreased pharmaceutical supply chain resilience. Compared to their U.S.-made counterparts, drugs offshored to South-East Asia are 56% more likely to face shortages, which last 130 days longer on average. To unveil the incentive mechanisms behind supply disruption, I develop and estimate a structural model of spatial location choices and global drug procurement. Suppliers trade off supply reliability and cost-cutting, which endogenously generates shortages. The fundamental problem with the market lies in its inability to capture and reward supply reliability under the current procurement system. Offshoring serves as a lever for drug manufacturers to exploit laxer regulatory oversight and target higher disruption risks than permissible in the U.S., in exchange for lower production costs. The resulting increase in average supply disruption risk, coupled with short-term pricing and capacity rigidities in generic injectable drug markets, translates into shortages. I use the estimated model to analyze two types of counterfactuals: reshoring production and modifying procurement contracts. While reshoring does not achieve the first best, enforcing failure-to-supply clauses in contracts effectively rewards supply reliability through higher producer margins. The net consumer welfare gains of reducing shortages may be large and are not offset by the associated increase in drug prices. 

Research Papers

1. Digital Platforms and Service Trade

  Extended Abstract 


Agents in two-sided matching markets use a mix of platform-guided recommendation and decentralized communication to learn about potential matches before matching. This paper studies whether, and how, market designers can use recommendation systems to incentivize effective communication between potential matches in the context of an online freelance labor market for tasks. With data from a major international online labor market, we build and estimate a novel model of freelancing supply and demand, in which firms post single-task online jobs they wish to outsource, freelancers submit monetary bids and cover letters for those jobs, the platform algorithmically ranks the bids on each job, and firms, seeing these recommendations, choose which freelancer to hire. In our model, freelancers pay up-front effort costs when writing cover letters, and the more writing effort they expend, the more informative the resulting signal is. However, when freelancers face congestion, they lower their equilibrium writing effort, hampering firms’ abilities to find the worker with the highest match quality. We use our estimated model to investigate how the platform could redesign the recommender system to lower congestion and thus incentivize more communication effort and improve the quality of realized matches. Specifically we study the equilibrium effects of a recommender system that promotes bids that exhibit more effort.

2. Trade, Regulations and Changes in Product Characteristics


Enforcement of quality regulations in the North may decrease the quality of goods distributed to the South, due to global redistribution by manufacturers of products flagged as "sub-quality" (products being recalled in the North) to less regulated markets. This paper aims to understand the global distribution of products recalled in highly regulated markets, such as the United States and Europe, when the manufacturers are global firms. Are new global manufacturing forces differentially allocating their products based on differentials in regulatory enforcement among destination markets? To answer these questions, I digitized new U.S. data on pharmaceutical product recalls and warning letters to foreign manufacturing facilities, which I merge with detailed descriptions extracted from Indian customs manifests. Using text mining techniques, I am able to trace global exports of drug products from Indian drug manufacturers and study what happens to global exports after an Indian product is recalled in the U.S. After a recall, I find evidence that the manufacturing firm reduces sales in the U.S., and reallocates production to other (less regulated) markets, such as African and South-Asian markets. Such behavior may result in an equilibrium in which high-quality products are traded with the North and sub-optimal quality products are diverted to the South. This may have important policy implications if more stringent quality enforcement in the North widens the differential in regulatory standards with the South. Abilities for global manufacturers to arbitrage exports based on differentials in global regulatory standards may lead to more product differentiation, resulting in lower-quality batches of products being sent to South countries with less regulated markets. This may also have implications for product availability in the North, as suppliers now located in the South may have lower incentives to quickly correct manufacturing quality issues if they can still distribute these products to South markets.


This paper provides a first empirical study of how openness to international trade in news products, a phenomenon largely facilitated by the digitalization of newspapers, may impact the characteristics of the information products available to consumers. Based on a case study of the entry of French media firms in Francophone Africa, I build a new dataset of more than 800 000 newspaper articles over the period 2005 to 2017. Using text mining techniques, I construct a five-dimensional set of newspaper characteristics to qualitatively analyze newspaper data. My evidence suggests that the entry of French digital newspapers, which produce a relatively low share of local news and whose websites are generally uniformly targeting all Francophone African countries, lead to a significant decrease of the diversity of subjects treated by Francophone African newspapers, characterized by a strong and significant increase of the share of local news, and a small decrease of the total number of articles related to France. I also find a slight but significant impact of the penetration of French digital newspapers on two indicators of newspaper format, namely a small increase of the average frequency of publication of Francophone African newspapers, and a very small decrease of the mean wordcount per articles. 

3. Spatial Diffusion of Information


This study investigates newspapers' impact on the migratory decisions of rural households in the 1870-1940 United States, emphasizing the role of information in shaping migration decisions. Contributing to the urban and health economics literature, we offer new insights about how information, specifically newspaper portrayals of public health advancements like water filtration and sewage systems, shapes rural-urban migration patterns. We show that access to information about urban health conditions through newspapers played a crucial role in encouraging rural households to move to cities over the turn of the 20th century. By exploiting a novel linkage between full-count U.S. Census data and a unique historical newspaper dataset at the county level, which leverages text-mining and Natural Language Processing (NLP) algorithms, we provide novel evidence that rural households responded to newspaper narratives on public health investments and typhoid occurrences. Rural migrants with access to information about public health investments migrated in higher proportion to sanitation-adopting cities compared to rural migrants with no access to such information, and avoided cities affected by pandemics more than their non-informed counterparts. This finding is consistent with the literature that suggests that such investments significantly reduced mortality from waterborne diseases (typhoid and diphtheria) and improved quality of life, making cities more attractive places to live. As policymakers consider strategies to revitalise urban areas in the post-pandemic era, our study highlights the potential importance of information dissemination in promoting urban growth and development.

Other Writings