sharat ganapati

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Working Papers

The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies - October 2017
Nearly half of all transactions in the $6 trillion market for manufactured goods in the United States were intermediated by wholesalers in 2012, up from 32 percent in 1992. Seventy percent of this increase is due to the growth of “superstar” firms - the largest one percent of wholesalers. Structural estimates based on detailed administrative data show the rise of the largest wholesalers was driven by an intuitive linkage between their sourcing of goods from abroad and an expansion of their domestic distribution network to reach more buyers. Both elements require scale economies and lead to increased wholesaler market shares and markups. Counterfactual analysis shows that despite increases in wholesaler market power, intermediated international trade has two benefits for buyers: directly through buyers' valuation of globally sourced products, and indirectly through the passed-through benefits of wholesaler economies of scale and increased quality.
Oligopolies, Prices, Output, and Productivity - Feb 2018
Previously titled "Oligopolies, Prices, and Quantities: Has Industry Concentration Increased Price and Restricted Output?"
American industries have grown more concentrated over the last forty years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. Using public data from 1972-2012, I use price data to disentangle revenue from output. Difference-in-difference estimates show that industry concentration growth is positively correlated to productivity and real output growth, uncorrelated with price changes and overall payroll, and negatively correlated with labor's revenue share. Productive industries (with growing oligopolists) expand real output and hold down prices, raising consumer welfare, while maintaining or reducing their workforces, lowering labor's share of output.
The Incidence of Carbon Taxes in U.S. Manufacturing: Lessons from Energy Cost Pass-Through - April 2017
(NBER Working Paper 22281)
This paper studies how increases in energy input costs for production are split between consumers and producers via changes in product prices (i.e., pass-through). We show that in markets characterized by imperfect competition, marginal cost pass-through, a demand elasticity, and a price-cost markup are sufficient to characterize the relative change in welfare between producers and consumers due to a change in input costs. We find that increases in energy prices lead to higher plant-level marginal costs and output prices but lower markups.
The Extensive Margin of Exporting Products: A Firm-level Analysis - December 2015 -
(AEJ: Macroeconomics - Revise and Resubmit)
We develop a general equilibrium model of multi-product firms in international trade to quantify market access costs at the level of firms, their products, and their export destinations. We estimate this framework with a simulated method of moments under rich demand and access cost shocks, using Brazilian firm-product export data. Our estimates quantify the relevance of market access costs and reveal large economies of scope that differ across export destinations. We evaluate a scenario where market access costs for an additional product are reduced to the level of those in nearby countries, generating welfare gains similar to eliminating current tariffs.
Minimum Wage and Retail Price Pass-through: Evidence and Estimates from Consumption Data - October 2016
While the vast majority of minimum wage research has focused on possible disemployment and labor market effects, this paper examines its effect on prices. Utilizing detailed transaction-level datasets, we find minimal pass-through of minimum wage changes onto retail and grocery prices. Estimates from other industries suggest that, aside from the restaurant and fast-food sectors, this low pass-through holds more generally.
Connecting Production and Distribution: Linking Manufacturing and Wholesaling Data - October 2016
The wholesale industry facilitates the trade of over 50% of domestic manufactured goods. However due to data limitations, there has been little research in the linkage between the manufacturing and wholesale trade sectors. I develop an algorithm to link North American Industry Classification System (NAICS) codes for manufactured goods with the NAICS wholesale sectors that trade these goods.

Current Research Projects:

Intermediates and Vertical Integration in International Trade
Market Entry Under Globalization (joint with Maliheh Feriz)
Path Dependence and Suboptimal Market Positioning: Automotive Dealership Networks

Inactive Working Papers:

An Investigation Into Executive Compensation and Corporate Board Ties - May 2009