Research
Working Papers
The Last Mile of Technology Diffusion: Finance, Capability, and the Conversion of Adopted Technology
Abstract
Technology in developing countries fails twice: firms adopt less of the frontier, and much of what they adopt never becomes how they actually produce. This paper defines, measures, and prices a new wedge: the conversion wedge, the gap between technology a firm uses at all and technology that is its primary production method. Using firm-level Adoption of Technology survey data, I construct a stalled-conversion indicator for each firm and business function: an advanced method that is used but not primary. Across countries, a large share of adopted advanced technologies are not the firm’s primary method, and many remain stalled even after several years of use. I document that machines load on the adoption margin but not the conversion margin, while finance and internal capability load on the conversion margin but not adoption. I then build a quantitative general-equilibrium model in which firms choose conversion intensity and where finance and internal capability govern the cost of making adopted technology operational. The results show that technology diffusion is not only about access to machines or adoption; it also depends on whether firms can finance and manage the last mile of conversion inside production.Used Capital and the Allocation of Entrepreneurial Opportunity under Financial Frictions
Abstract
Standard models of occupational choice with financial frictions treat capital as homogeneous and ask how much output is lost when credit is scarce. This paper asks: how does access to used capital affect entrepreneurial entry when financial frictions prevent talented but poor agents from operating at efficient scale? I develop a dynamic general equilibrium model, calibrated to Vietnamese SME data, in which agents differ in wealth, entrepreneurial productivity, and worker ability, and firms rent new and used capital subject to a rental--collateral constraint. Entry carries no fixed cost: an agent becomes an entrepreneur whenever the value of running a firm exceeds the value of wage work. Used capital matters because it absorbs less collateral capacity than new capital, allowing constrained firms to operate closer to efficient scale for a given level of wealth. The intensive-margin gain is positive across the wealth distribution, but the key selection effect appears on the entry margin: used capital helps productive low-wealth agents enter when collateral is scarce. Removing the used-capital market at fixed benchmark prices destroys a quarter of entrepreneurship. When prices re-clear, aggregate entry almost fully recovers, but its composition changes. Entry tilts toward wealth and away from productivity, MRPK dispersion remains higher, and the TFP cost of financial frictions rises modestly. Used capital is therefore not merely a cheaper input; it is a financial device that reallocates entrepreneurial opportunity from wealth toward talent.Shadow Cost of Funds, Collateral Constraints, and Used Capital: A Model of Capital Misallocation
Abstract
Firms can choose new versus used capital. The lower purchase price of used capital relaxes financing for constrained firms, letting them scale earlier with more self-financing, improve short-run survival, and reduce the mass of chronically small firms. This shifts the vintage mix and aggregate misallocation. This paper builds a firm-dynamics model without an entry margin. Firms face a collateral-style affordability cap and a shadow cost of funds that captures financing tightness. The key feature is a vintage choice between new and used capital, treated as two distinct goods: a unit bought as new remains new, and a unit bought as used remains used. There is no conversion from new to used and no additional within-type quality downgrading beyond standard type-specific depreciation. Because used capital has a lower upfront price, constrained firms can expand capacity sooner with less external finance, while self-financing builds assets. Large, unconstrained firms change their vintage mix little.Publication
Master Project:
Geoeconomics of Global Energy Transformation: Oil Prices, Polyethylene Costs, and Shale Gas in the U.S.
Published August 2022 —
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Research Experience
Research Assistant
- York University (2023–Present) — Supervisors: Tasso Adamopoulos and Chaoran Chen
- Electricity Industry Project (2021) — Supervisor: Jeremy Lin
- University of Tehran (2018) — Supervisor: Farkhondeh Jabal Ameli