Pavel Ševčík

associate professor

department of economics

ESG UQAM

 

Département des sciences économiques

Ecole des sciences de la gestion

Université du Québec à Montréal

C.P. 8888, Succursale Centre-ville

Montréal, Québec, Canada

H3C 3P8


tel.: +1-514-987-3000-8382#

fax: +1-514-987-8494


sevcik.pavel@uqam.ca

Financial Frictions, Internal Capital Markets, and the Organization of Production (Review of Economic Dynamics, 2015, 18(3), pp. 505-522 . Published version (requires subscription) )

Abstract: This paper evaluates the role of internal capital markets in business groups for allocating capital to its most productive use. A quantitative model in which business groups arise endogenously as substitutes for imperfect credit markets explains several stylized facts about establishment size distribution and cross-firm productivity differences. The impact of internal capital markets on economic development is positive: shutting down business conglomeration in the model calibrated to the Canadian economy would lead to a 3 percent reduction in output per capita. These losses are higher in economies with less developed financial markets.

Financial Contracts and the Political Economy of Investor Protection (American Economic Journal: Macroeconomics, 2012, 4(4), pp. 163-197)

Abstract: This paper studies the joint dynamics of investor protection and economic development in a political economy model with capital accumulation and occupational choice. Less investor protection implies higher costs of external financing for entrepreneurs. This excludes poorer agents from entrepreneurship, increasing the profits of the remaining entrepreneurs. The main determinants of investor protection policy preferences are the agent's net worth and the expected return from entrepreneurship. When the policy is chosen by the simple majority rule, the model generates several implications consistent with the observed variation of investor protection over time and across countries.

Cheap Talk, Gullibility, and Welfare in an Environmental Taxation Game (with Herbert Dawid and Christophe Deissenberg, published in “Dynamic Games: Theory and Applications”, Haurie and Zaccour Eds., GERAD, Springer 2005)

Abstract: We consider a simple dynamic model of environmental taxation that exhibits time inconsistency. There are two categories of firms, Believers, who take the tax announcement made by the Regulator to face value, and Non-Believers, who perfectly anticipate the Regulator’s decisions, albeit at a cost. The proportion of Believers and Non-Believers changes over time depending on the relative profits of both groups. We show that the Regulator can use misleading tax announcements to steer the economy to an equilibrium that is Pareto superior to the solutions usually suggested in the literature. Depending upon the initial proportion of Believers, the Regulator may prefer a fast or a slow speed of reaction of the firms to differences in Believers/Non-Believers profits.

Do Multi-plant Firms Reduce Misallocation? Evidence from Canadian Manufacturing (March 2016, forthcoming in Journal of Industrial Economics)

Abstract: Using Canadian plant-level data this paper shows that, depending on industry, the differences in the average plant-level productivity and cross-plant allocation of resources between multi-plant and single-plant firms account for 1 to 15 percent of the industry-level TFP. A large part of this contribution stems from more efficient cross-plant allocation of resources, measured by the covariance between plant size and productivity, in the pool of plants belonging to multi-plant firms compared to the pool of plants in single-plant firms. There is less dispersion in marginal products of resources, and thus less misallocation, in industries in which multi-plant firms account for a larger share of output. The patterns found in the cross-plant distribution of productivity and size are also consistent with better allocative efficiency among plants in multi-plant firms than among plants in single-plant firms.


Curriculum Vitae: cv_en.pdf


Research Interests: Macroeconomics, Political Economy, Industrial Organization


Working Papers and Publications:

Work in progress:

Tuition Subsidies as a Tool for Economic Development (with Rui Castro)

Occupational Choice, Human Capital, and Financial Constraints (with Rui Castro, February 2016)

Abstract: We study the aggregate productivity effects of firm-level financial frictions. Credit constraints affect not only production decisions but also household-level schooling decisions. In turn, entrepreneurial schooling decisions impact firm-level productivities, whose cross-sectional distribution becomes endogenous. In anticipation of future constraints, entrepreneurs under-invest in schooling. Frictions lower aggregate productivity because talent is misallocated across occupations, and capital misallocated across firms. In addition, firm-level productivities are also lower due to distortions induced by the schooling responses. We find that these effects combined account for about 1/5 of the U.S.-India aggregate productivity difference. Requiring the model to match schooling differences significantly amplifies the impact of frictions, and the model accounts for 58% of the aggregate productivity difference.