Ozan Güler 

Working Papers

• Heterogeneous Firing Costs, Worker Types, and Productivity: Evidence from a Natural Experiment, with Andrea Caggese, Mike Mariathasan, and Klaas Mulier 
  (conditionally accepted, AEJ: Applied Economics)

We investigate how firing costs affect input choices and total factor productivity (TFP) by exploiting a labor reform in Belgium that increased firing costs of blue-collar workers relative to white-collar workers. Using a difference-in-differences design, we show that hiring and separations at blue-collar-intensive firms declined by 8 percent after the reform relative to white-collar-intensive firms. Moreover, blue-collar-intensive firms shifted workforce composition toward white-collar workers, offered fewer permanent contracts, and relied more on outsourced labor. We find no evidence of capital-intensive technology adoption and only little evidence of human capital investment. Ultimately, blue-collar-intensive firms experienced a 4.8 percent decline in TFP. 

• Bank Specialization, Control Rights, and Real Effects, with Marco Giometti and Stefano Pietrosanti
  (R&R Management Science)

We study how lenders' industry expertise affects loan covenant design and enforcement. Using a large sample of U.S. corporate loans, we find that industry-specialized lenders impose less restrictive financial covenants and exhibit greater dispersion in contract terms. Following a covenant violation, borrowers financed by specialized banks experience smaller drops in investment without a decline in performance. Our results suggest that lenders improve contracting efficiency by leveraging industry-level knowledge, which is transferable across borrowers. 

• Who gets publicly guaranteed loans? The effect of guarantee fees on loan allocation and pricing, with Ilia Samarin
  Latest draft on SSRN
  NBB Working Paper

We study how guarantee fees affect lending by exploiting the Belgian COVID-19 loan guarantee program, which charged lower fees to SMEs than to large firms. Using this size-based fee discontinuity in a regression discontinuity design, we show that large firms facing higher fees are more likely to obtain non-guaranteed loans that are cheaper than comparable guaranteed loans. Both banks and firms benefit from avoiding the fee: borrowers pay lower rates, and lenders retain part of the avoided fee as higher returns. Overall, fees discourage guaranteed lending and concentrate guaranteed loans among ex-ante riskier large firms, resulting in higher ex-post defaults.

• Oversight Avoidance: Strategically Small Firms and the Real Effects of Public Grants During a Crisis,  with Mircea Epure and Amedeo Pugliese

We study whether firms that remain strategically small to avoid heightened oversight in normal times disproportionately access public grants during the COVID-19 crisis. Using Spanish firm-level data, we identify bunching below two thresholds: \euro{6} million in revenue, where tax compliance and monitoring become stricter, and 50 employees, where labor regulation and disclosure obligations become more demanding. Firms just below these thresholds before the shock were more likely than firms just above them to obtain public funding during the crisis, when screening was lighter. Our evidence points to strategic avoidance of oversight rather than greater financing needs or higher credit costs. Despite accessing more public funding, strategically small firms invested less and exhibited weaker performance, while reducing short-term debt. Overall, our findings suggest that persistent strategic avoidance of oversight can shape the allocation of public resources when screening is relaxed.

Publications

• The Real Effects of Banks' Corporate Credit Supply: A literature Review, Economic Inquiry (2021)

with Mike Mariathasan, Klaas Mulier, and Nejat Gokhan Okatan

In this article, we review the rapidly growing literature on the real effects of banks' corporate credit supply. We cover recent methodological advances and provide an in-depth survey of the existing evidence. The literature consistently shows that credit supply contractions lead to adverse real outcomes, but economic magnitudes vary across samples and identification strategies. This variation has become smaller in more recent work, using highly granular data. We further document heterogeneity in firm outcomes and show that the evidence is more ambiguous for expansionary shocks. Our analysis allows us to identify current knowledge gaps and worthwhile avenues for future research.

Work in Progress

• Misreporting and Guaranteed Loans, with Daniel Dejuan-Bitria, Mircea Epure, and Dmitry Khametshin