Broken Relationships: De-Risking by Correspondent Banks and International Trade

Forthcoming, Review of Financial Studies

When local banks lose access to correspondent banking services, their corporate clients' exports decline. Firms only partially substitute lost exports with domestic sales, resulting in lower total revenues, lower employment, and market exit.

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Abstract

We study how terminated correspondent banking relationships affect international trade. Drawing on firm-level export data from emerging Europe, we show that when local banks lose access to correspondent services, their corporate clients (especially small- and medium-sized enterprises) experience significant export declines. Firms only partially offset lost exports with higher domestic sales, resulting in lower total revenues and employment. Other firms cease operations entirely. These firm-level impacts aggregate to lower product-level exports from countries more exposed to correspondent bank retrenchment.

Coauthored with Lea Borchert, Ralph de Haas, and Karolin Kirschenmann

Guns and Kidneys: How Transplant Tourism Finances Global Conflict

Revise and Resubmit, Journal of the European Economic Association — EEA Young Economist Award 2022

Higher US kidney demand increases violent attacks near transplant hospitals in known transplant-tourism destinations. The pattern suggests that non-state armed groups exploit transplant tourism to finance their operations.

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Abstract

This paper investigates the impact of organ trafficking on local conflict using georeferenced data on conflict events and hand-collected data on local transplant infrastructure in countries known for illegal transplanting. Exploiting exogenous variation in kidney demand from the US waiting list for kidneys, I find that higher US kidney demand increases conflict in localities with a transplanting hospital. A one-standard deviation increase in the US waiting list for kidneys raises conflict probability by 17% and the number of conflict events by 0.9%. This effect is stronger for higher-income waiting list patients, who are more likely to afford the costs of an illegal transplant, while it is absent for dialysis patients, with limited travel ability. Furthermore, armed groups with transplanting capacities intensify attacks when US kidney demand is higher, spreading violence spatially.

Awarded the EEA Young Economist Award, 2022.

Banks of a Feather: The Informational Advantages of Being Alike

Published, Journal of Money, Credit, and Banking

Using German credit register data, we show that portfolio similarity helps banks overcome information asymmetries when lending to other banks.

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Abstract

Banks lend more to banks that are similar to them. Using data from the German credit register and proprietary supervisory data on the quality of banks’ loan portfolio, we show that a similar portfolio of the lending and borrowing bank helps to overcome information asymmetries in interbank markets. While interbank lenders generally do not adjust their lending to information on the counterparty’s portfolio quality, banks with an exposure to similar industries and regions strongly react to this private information. Lending between similar banks is particularly important for borrowers with an opaque loan portfolio, which do not obtain credit from dissimilar peers.

Coauthored with Peter Bednarek, Valeriya Dinger, and Natalja von Westernhagen

The Precious Networks of the Rich: How the Wealthiest Shape the Tax Agenda

We test whether social and institutional ties between legislators and the ultra-rich help explain trends toward regressive taxation.

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Scheduled for the IIPF Annual Meeting 2026.

Abstract

Despite broad public support for progressive taxation, the current U.S. tax system is among the most regressive in history. This paper tests whether social and institutional ties between legislators and the ultra-rich help explain this mismatch. We use large language models to classify the progressivity of the full universe of tax-related bills introduced in Congress since 1973. Using publicly available biographies, we then construct a new dataset linking Members of Congress to billionaires through overlap in higher-education institution, program, and graduation cohort. Our preliminary findings suggest that legislators with greater exposure to billionaires during college and university are more likely to sponsor regressive tax proposals and fewer progressive ones. These results support the view that elite networks can transmit political influence through informal social channels.

Coauthored with Martí Medina Hernandez, Benjamin Rosche, and Yufang Sun

Profit Shifting via Carbon Emission Trading: First Indications

Using EU transaction log and Orbis ownership data, I show that multinational groups shift EU ETS allowances within the group at year-end, from stricter to more lenient accounting jurisdictions. The pattern is consistent with regulatory arbitrage rather than real compliance needs.

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Presented at VfS and IIPF 2024; scheduled for the World Inequality Conference 2026.

Abstract

This study presents preliminary evidence that the European Emission Trading Scheme (EU ETS) is exploited by multinational companies to artificially shift profits between European countries. Specifically, using the EU transaction log and Orbis ownership data, I highlight abnormally high levels of internal trade in emission allowances at year-end—despite the April surrender deadline—within firms under the same Global Ultimate Owner (GUO). This activity is especially marked in transactions involving firms without actual emission certificate needs. Towards the year-end, allowances are moved from subsidiaries in strict accounting jurisdictions to those in lenient ones, indicating regulatory arbitrage. These patterns hint to a potential misuse of the EU ETS for financial manipulation rather than emission reduction.