Yoshiki Ando
Welcome!
I am a Postdoctoral Associate at Boston University (Technology & Policy Research Initiative).
I received a Ph.D. in Economics from the University of Pennsylvania in 2024. I will join Singapore Management University (SMU) as an Assistant Professor of Economics in 2025.
My research interests are in macroeconomics, focusing on innovation, firm dynamics, and heterogeneous-agent models with financial frictions.
Working Papers
Abstract: How does venture capital (VC) financing help the growth of startup firms and impact aggregate output and consumption? Motivated by the substantial growth and upfront investment of VC-backed firms observed in administrative US Census data, this paper develops a firm dynamics model over the life cycle that centers on ex-ante heterogeneity in growth potential, innovation investment, and external financing. In the model, startups choose the source of financing from VC, Angel investors, and banks, where financial frictions arise from bank default costs and costs of raising equity. VC-backed firms achieve substantial growth as a result of endogenous sorting, equity-based funding, and managerial advice. The calibrated model implies that venture capitalists' advice accounts for around 22% of the growth of VC-backed firms. A counterfactual economy without VC financing would lose aggregate consumption by around 0.4%.
Abstract: In this paper, we study the neoclassical growth model with idiosyncratic income risk and aggregate risk in which risk sharing is endogenously constrained by one-sided limited commitment. Households can trade a full set of contingent claims that pay off depending on both idiosyncratic and aggregate risk, but limited commitment rules out that households sell these assets short. The model results, under suitable restrictions of the parameters of the model, in partial consumption insurance in equilibrium. With log-utility and idiosyncratic income shocks taking two values, one of which is zero (e.g., employment and unemployment), we show that the equilibrium can be characterized in closed form, despite the fact that it features a non-degenerate consumption and wealth distribution. We use the tractability of the model to study, analytically, inequality over the business cycle and asset pricing, and derive conditions under which our model has identical, as well as conditions under which it has lower/higher risk premia than the corresponding representative agent version of the model.
Work in Progress
"Technifying Ventures"
(with Emin Dinlersoz, Jeremy Greenwood, and Ruben Piazzesi)
The role that venture capital plays in stimulating startups that adopt advanced technologies, such as artificial intelligence and robotics, is examined. Using the Census Bureau's 2018 Annual Business Survey, the relationship between technology adoption, VC-backed status, and firm performance is investigated. There is a disproportionate presence of advanced technology among VC-backed firms. Additionally, among startups that adopt advanced technologies, VC-backed firms outperform non-VC-backed ones, measured in terms of employment and revenue. A general equilibrium model is developed of advanced technology usage and VC finance. Consistent with the data, the model predicts that firms adopting advanced technologies are more likely to raise VC finance. The ex post productivity distribution of advanced technology firms stochastically dominates the productivity distribution of non-advanced technology firms. Additionally, the ex post productivity distribution of VC-backed firms stochastically dominates the productivity distribution of non-VC-backed firms due to both selection and synergy effects.