Tehran Institute for Advanced Studies (TeIAS)

/ Information Technology, Global Goliaths and Asset Returns __ Emmanouil Chatzikonstantinou


Information Technology, Global Goliaths and Asset Returns

poster-Emmanouil Chatzikonstantinou-min

January 11, 2023
(21 Dey, 1401)



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January 10, 2023

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Emmanouil Chatzikonstantinou

Assistant Professor of Economics, Georgetown University Qatar


Using novel sources of data, I provide evidence on the impact of Information Technology on foreign competition and the impact of global shocks to U.S. firms’ profitability and equity valuations. Using industry-level variation in digital intensity, I uncover several empirical regularities over the past three decades: 1. More digitalized industries (excluding Information Technology producing sectors), have become more global and dominated by large multinationals. 2. Controlling for other common factors affecting asset prices, portfolios with exposure to industries with high digital intensity have on average 8-9 % higher annual stock returns. 3. The higher returns are driven by the returns of firms in industries with a large presence of foreign multinationals. I formalize these empirical regularities through a two-country general equilibrium asset pricing model where industries differ in the magnitude of multinational firms’ competition and digital intensity. Multinational firms in the model and in the data, operating outside of their headquarters country, are large and more productive and as a result adopt Information Technology to operate more efficiently. The model and the data are pointing to a novel risk premium due to the productivity enhancements of large and multinational firms from digitalization. In particular, the displacement risk for sales of unproductive incumbents due to foreign competition is systematically priced in the cross section of asset prices.



Emmanouil is Assistant Professor in the International Economics group in the School of Foreign Service at Georgetown University Qatar. his research using detailed microdata explores the impact of innovative decisions of firms on their multinational expansion. Through this work, he tries to understand the behavior of asset prices, economic growth and the transmission of business cycles in a global economy with a few dominant large firms. In addition, he studies supply chains and international trade under conditions of uncertainty. he is currently working on a big data project combining several data sources from job vacancies, financial balance sheets and ownership information to understand the impact of new technologies and the demand for new skills on a globalized labor market. he received his Ph.D. in Economics at the University of California, Los Angeles (UCLA) and holds degrees in Applied Mathematics from the National Technical University of Athens and Accounting and Finance in Athens University of Economics and Business.