Emanuela Benincasa, with her research on "The Consequences of Carbon Pricing Policy for Supply Chain Relationships," and Winta Beyene, exploring "Location-based lending heterogeneity post natural disasters," have been awarded UZH Candoc Grants by the University of Zurich.
The UZH Candoc Grant aims to support promising early career researchers pursuing exceptional PhD theses at the University of Zurich. The grant primarily focuses on providing salary funds to offer researchers dedicated research time for their projects.
Emanuela Benincasa's project aims to investigate the impact of carbon pricing policies, specifically cap-and-trade programs, on firms' behavior and relationships within supply chains. The research examines how these effects propagate in the production network, ultimately influencing the real economy. Supply chains, which encompass firms working together to produce and distribute goods and services, play a crucial role in the transition to a sustainable economy. They face exposure to climate regulations that can lead to price increases and reduced supply of key inputs, as well as disinvestment from interconnected sectors.
The introduction of carbon pricing measures affects supply chains due to the constraints they impose on firms. Cap-and-trade programs limit firms' financial resources by allocating capped emissions permits and organizing auctions for emissions allowances. This exposes firms to uncertainty risks. On one hand, these constraints can have adverse effects on interconnected business partners, particularly those facing high switching costs in the supply chain. On the other hand, they can encourage the formation of relationships with green partners and incentivize investments in clean technologies.
Collaborating with Dr. Emilia Garcia-Appendini (Norges Bank and UZH) and Prof. Miguel Ferreira (Nova SBE, ECGI, and CEPR), Benincasa's research project aims to shed light on the implications of the transition to a low-carbon economy on supply chains. The objective is to document whether unintended consequences emerge and propagate along the production network. By exploring these conjectures, the research contributes to a better understanding of the relationship between carbon pricing policies and supply chains, facilitating informed and effective policy-making processes.
Disparities in recovery among communities affected by natural hazards raise questions about the factors contributing to resilience and the reasons behind varying levels of recovery. One factor to consider is the role of household bank credit in enabling communities to bounce back by facilitating consumption smoothing. Winta Beyene examines the relationship between community disaster resilience, household credit, and changes in consumption after natural hazards using loan-level household credit data. She focuses on community disaster resilience as a potential driver of disparities in credit access following natural disasters.
Recent literature on the economics of natural disasters acknowledges the interplay between natural hazards and community recovery, shifting away from a hazard-centered perspective. Building on this understanding, Beyene hypothesizes that natural hazards impact the willingness of the banking sector to provide loans to borrowers in low-resilience counties, leading to tighter local credit conditions and reduced credit growth.
Her project aims to investigate the impact of catastrophic flooding events in Germany on access to bank credit for durable goods in counties with varying levels of pre-existing disaster resilience. Community disaster resilience is measured using a comprehensive, empirics- and place-based approach that considers various indicators known to capture the multidimensional nature of resilience. The project also explores the potential amplifying effect of social capital, encompassing social connections, networks, and relationships within the community.