Imperial College London

DrMirabelleMuuls

Business School

Associate Professor of Economics
 
 
 
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Contact

 

+44 (0)20 7594 9059m.muuls CV

 
 
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Location

 

CAGB483City and Guilds BuildingSouth Kensington Campus

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Summary

 

Publications

Publication Type
Year
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53 results found

Colmer J, Martin R, Muuls M, Wagner Uet al., 2024, Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading system, The Review of Economic Studies, ISSN: 0034-6527

In theory, market-based regulatory instruments correct market failures at least cost. However, evidence on their efficacy remains scarce. Using administrative data, we estimate that, onaverage, the EU ETS – the world’s first and largest market-based climate policy – induced regulated manufacturing firms to reduce carbon dioxide emissions by 14-16% with no detectablecontractions in economic activity. We find no evidence of outsourcing to unregulated firms ormarkets; instead firms made targeted investments, reducing the emissions intensity of production. These results indicate that the EU ETS induced global emissions reductions, a necessaryand sufficient condition for mitigating climate change. We show that the absence of any negative economic effects can be rationalized in a model where pricing the externality induces firmsto make fixed-cost investments in energy-saving capital that reduce marginal variable costs.

Journal article

De Haas R, Martin R, Muuls M, Schweiger Het al., 2024, Managerial and financial barriers to the green transition, Management Science, ISSN: 0025-1909

Using data on 10,769 firms across 22 emerging markets, we show that both credit constraints and weak green management hold back corporate investment in green technologies embodied in new machinery, equipment and vehicles. In contrast, investment in measures to explicitly reduce emissions and other pollution is mainly determined by the quality of a firm’s green management and less so by binding credit constraints. Data from the European Pollutant Release and Transfer Register reveal the environmental impact of these organizational constraints. In areas where more firms are credit constrained and weakly managed, industrial facilities systematically emit more CO2 and pollutants. A counterfactual analysis shows that credit constraints and weak management have respectively kept CO2 emissions 4.8% and 2.2% above the levels that would have prevailed without such constraints. This is further corroborated by our finding that in localities where banks had to deleverage more due to the global financial crisis, carbon emissions by industrial facilities remained 5.7% higher a decade later.

Journal article

Yong SK, Wagner U, Shen P, de Preux L, Muuls M, Martin R, Cao Jet al., 2023, Management practices and climate policy in China, Journal of the Association of Environmental and Resource Economists, ISSN: 2333-5955

We investigate how management quality moderates the impact of carbon pricing on Chinese firms. Based on interviews with managers and lead engineers at manufacturing firms in Hubei and Beijing, we construct a novel index of climate-change related management practices and link it to firm data from various sources. Wedocument higher average productivity and more green innovation among firms that are well managed according to the index. In an event study of the introduction of regional cap-and-trade schemes for CO2, we analyze how management quality interacts with treatment. While treated firms reduced coal consumption more than control firms, this effect is statistically significant only for well-managed firms. The reduction could have been 25% greater if badly managed firms had been well managed. Our study highlights that good management practices, in particular energy monitoring, enhance the effectiveness of market-based climate policies by enabling firms to rationally comply with those policies.

Journal article

Muuls M, Hawkes A, Hamilton J, 2023, Big oil and the energy transition: evidence from M&A, Energy Policy, Vol: 183, ISSN: 0301-4215

International Oil Companies (IOCs) represent a significant source of capital and expertise that could be deployed to contribute to the investment required to achieve the energy transition to a low carbon future. This paper sheds light on the current motivations for mergers and acquisitions (M&A) by the various energy sectors and focusses on policies and commercial contexts that would favour IOCs incorporating renewables into their core business. An empirical analysis of a twenty-year history of M&A in the energy sector, covering over 10,000 transactions, is complemented by an economic model that differentiates between investment for innovation and investment for scale and transaction benefit. The analysis confirms that in the case of renewables, IOCs are currently at the exploratory stage of business development and appear to be valuing innovation based on renewables on subset of their business. The analysis concludes that IOCs favour core investment in functioning competitive energy markets rather than in rate-of-return regulated assets, and that for IOCs in particular policies and market rules directed towards that end would favour both near- and long-term investment by them into low carbon energy.

Journal article

Forlani E, Martin R, Mion G, Muuls Met al., 2023, Unraveling firms: demand, productivity and markups heterogeneity, The Economic Journal, Vol: 133, Pages: 2251-2302, ISSN: 0013-0133

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish this by explicitly introducing demand heterogeneity and systematically exploiting assumptions used in previous productivity estimation approaches. In doing so, we provide an exact decomposition of revenue productivity in terms of the underlying heterogeneities, thus bridging the gap between quantity and revenue productivity estimations. We use Belgian firms production data to quantify TFP, demand and markups and show how they are correlated with each other, across time and with measures obtained from other approaches. In doing so, we find quantity TFP and demand to be strongly negatively correlated with each other so suggesting a trade-off between the quality of a firm’s products and their production cost. We also show how our framework provides deeper and sharper insights on the response of firms to increasing import competition from China. In particular, we find that changes in revenue productivity materialise as the outcome of complex, and sometimes offsetting, changes in quantity TFP, demand, markups and production scale.

Journal article

Forlani E, Martin R, Mion G, Muuls Met al., 2023, Unraveling Firms: Demand, Productivity and Markups Heterogeneity, Publisher: OXFORD UNIV PRESS

Working paper

Barker M, Degond P, Martin R, Muûls Met al., 2023, A mean field game model of firm-level innovation, Mathematical Models and Methods in Applied Sciences, Vol: 33, Pages: 929-970, ISSN: 0218-2025

Knowledge spillovers occur when a firm researches a new technology and that technology is adapted or adopted by another firm, resulting in a social value of the technology that is larger than the initially predicted private value. As a result, firms systematically under-invest in research compared with the socially optimal investment strategy. Understanding the level of under-investment, as well as policies to correct it, is an area of active economic research. In this paper, we develop a new model of spillovers, taking inspiration from the available microeconomic data. The model developed is a mean field game model, which allows for heterogeneity in the productivity of a firm and allows for a novel approach to describing sector-level spillovers. The model is constructed from a network of interacting firms, whose connections represent knowledge transfers. We prove existence and uniqueness of solutions to the model, and we conduct some initial simulations to understand how indirect spillovers contribute to the productivity of a sector.

Journal article

De Haas R, Martin R, Muûls M, Schweiger Het al., 2023, Managerial and Financial Barriers to the Net Zero Transition

Working paper

De Haas R, Martin R, Muûls M, Schweiger Het al., 2023, Managerial and Financial Barriers to the Net Zero Transition, Publisher: Elsevier BV

Working paper

Martin R, De Haas R, Muûls M, Schweiger Het al., 2023, Managerial and Financial Barriers during the Green Transition

Working paper

Muuls M, Narula R, Piscitello L, Zanfei Aet al., 2023, Global value chains: antecedents and new perspectives, Journal of Industrial and Business Economics, Vol: 50, Pages: 19-23, ISSN: 0391-2078

Journal article

Muuls M, Martin R, De Haas R, Schweiger Het al., 2022, Firms and finance during the green transition, Scaling Up Sustainable Finance and Investment in the Global South, Editors: Schoenmaker, Volz, Publisher: CEPR Press, Pages: 11-20, ISBN: 978-1-912179-66-4

Book chapter

Colmer J, Martin R, Muûls M, Wagner UJet al., 2022, Does Pricing Carbon Mitigate Climate Change? Firm-Level Evidence from the European Union Emissions Trading Scheme

Working paper

Dechezleprêtre A, Gennaioli C, Martin R, Muûls M, Stoerk Tet al., 2021, Searching for carbon leaks in multinational companies, Journal of Environmental Economics and Management, Vol: 112, ISSN: 0095-0696

Does a unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, we analyze the effect of the European Union Emissions Trading System (EU ETS) on the geographic distribution of carbon emissions by multinational companies. The empirical evidence is based on unique data for the period 2007-2014 from the Carbon Disclosure Project, which tracks the emissions of multinational businesses by geographic region within each company. Because they already operate from multiple locations, multinational firms should be the most prone to carbon leakage. Our data includes the regional emissions of 1,122 companies, of which 261 are subject to EU ETS regulation. We find no evidence that the EU ETS has led to a displacement of carbon emissions from Europe toward the rest of the world, including to countries with lax climate policies and within energy-intensive companies. A large number of robustness checks confirm this finding. Overall, the paper suggests that modest differences in carbon prices between countries do not induce carbon leakage.

Journal article

Trask A, Wills K, Green T, Staffell I, Auvermann O, Coutellier Q, Muuls M, Hardy J, Morales Rodriguez D, Martin R, Sivakumar A, Pawlak J, Faghih Imani SA, Strbac G, Badesa Bernardo Let al., 2021, Impacts of COVID-19 on the Energy System, Impacts of COVID-19 on the Energy System

This Briefing Paper explores the impactthe COVID-19 pandemic had on the UK’senergy sector over the course of thefirst government-mandated nationallockdown that began on 23 March 2020.Research from several aspects of theIntegrated Development of Low-carbonEnergy Systems (IDLES) programme atImperial College London is presented inone overarching paper. The main aim isto determine what lessons can be learntfrom that lockdown period, given theunique set of challenges it presented inour daily lives and the changes it broughtabout in energy demand, supply, anduse. Valuable insights are gained intohow working-from-home policies,electric vehicles, and low-carbon gridscan be implemented, incentivised, andmanaged effectively.

Report

Coutellier Q, Hardy J, Martin R, Muûls Met al., 2021, Homeworking can be Net Positive, Evidence from the UK Lockdown during COVID-19

Working paper

De Haas R, Martin R, Muûls M, Schweiger Het al., 2021, Managerial and Financial Barriers During the Green Transition

Working paper

Yong SK, Wagner UJ, Shen P, Preux LD, Muûls M, Martin R, Cao Jet al., 2021, Management Practices and Climate Policy in China

Working paper

Martin R, Haas RD, Muûls M, Schweiger Het al., 2021, Managerial and Financial Barriers to the Net-Zero Transition

Working paper

Wagner UJ, Kassem D, Gerster A, Jaraite J, Klemetsen ME, Laukkanen M, Martin R, Muûls M, de Preux L, Rosendahl KE, Schusser Set al., 2020, Carbon Footprints of European Manufacturing Jobs: Stylized Facts and Implications for Climate Policy, Publisher: Elsevier BV

Working paper

Colmer J, Martin R, Muûls M, Wagner UJet al., 2020, Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading scheme Acknowledgements

In theory, market-based regulatory instruments correct market failures at least cost. However, evidence on their efficacy remains scarce. We evaluate the European Union Emissions Trading Scheme (EU ETS)-the world’s first and largest market-based climate policy. Using administrative data on almost 4,000 French manufacturing firms, we estimate that the EU ETS induced regulated firms to reduce carbon dioxide emissions by 8-12% compared to unregulated firms after the Pilot phase, a necessary condition for climate change mitigation. These reductions account for 26% of the concurrent decline in aggregate industrial emission in France. We do not estimate any negative effects on the scale of production; instead we find that firms reduced the emissions intensity of value added by making targeted investments. We find no evidence that firms outsourced production to unregulated firms or markets. Collectively, these findings suggest that the EU ETS induced global emissions reductions, a necessary and sufficient condition for mitigating climate change.

Working paper

Coutellier Q, Gosnell G, Gurguc Z, Martin R, Muuls Met al., 2020, Consumer Driven Virtual Power Plants: A Field Experiment on the Adoption and Use of Prosocial Technologies

Working paper

Chassagneux J-F, Chotai H, Muûls M, 2017, A Forward-Backward SDEs Approach to Pricing in Carbon Markets, Publisher: Springer, ISBN: 9783319631158

In this chapter, we consider a model for the valuation of carbon emissions market allowances. In each year from 2006 to 2011 inclusive, combustion installations accounted for between 72 and 75% of verified emissions under the EU ETS (Emissions Trading System), see Fig. 3.1. It is reasonable to assume that most of these installations are involved in electricity generation. Given the importance of power producers in such markets, the model focuses on the electricity generation sector.

Book

Alberts G, Gurguc Z, Koutroumpis P, Martin R, Muuls M, Napp Tet al., 2016, Competition and norms: a self-defeating combination?, Energy Policy, Vol: 96, Pages: 504-523, ISSN: 1873-6777

This paper investigates the effects of information feedback mechanisms on electricity and heating usage at a student hall of residence in London. In a randomised control trial, we formulate different treatments such as feedback information and norms, as well as prize competition among subjects. We show that information and norms lead to a sharp – more than 20% - reduction in overall energy consumption. Because participants do not pay for their energy consumption this response cannot be driven by cost saving incentives. Interestingly, when combining feedback and norms with a prize competition for achieving low energy consumption, the reduction effect – while present initially – disappears in the long run. This could suggest that external rewards reduce and even destroy intrinsic motivation to change behaviour.

Journal article

Martin R, Muuls M, Wagner U, 2016, The impact of the European Union Emissions Trade Scheme on regulated firms: what is the evidence after ten years?, Review of Environmental Economics and Policy, Vol: 10, Pages: 129-148, ISSN: 1750-6824

This article reviews the recent literature on ex post evaluation of the impacts of the European Union (EU) Emissions Trading Scheme (ETS) on regulated firms in the industrial and power sectors. We summarize the findings from original research papers concerning three broadly defined impacts: carbon dioxide emissions, economic performance and competitiveness, and innovation. We conclude by highlighting gaps in the current literature and suggesting priorities for future research on this landmark policy. ( JEL : Q52, Q54, Q58)

Journal article

Muuls M, 2015, Exporters, importers and credit constraints, Journal of International Economics, Vol: 95, Pages: 333-343, ISSN: 1873-0353

This paper analyzes the interaction between credit constraints and trading behavior, decomposing trade in extensive and intensive margins. I construct a unique dataset containing firm-level trade transaction data, balance sheets and credit scores from an independent credit insurance company for Belgian manufacturing firms between 1999 and 2007. Firms are more likely to be exporting or importing if they enjoy lower credit constraints. Also, firms that have better credit rating export and import more. Importing and exporting behaviors differ in how both the level and growth of the various margins of trade are related to credit constraints in one important dimension. In the case of exports, it is the intensive and extensive margins of exports in terms of both product and destinations that are significantly associated with credit constraints whereas for imports it is the extensive margin in terms of products only.

Journal article

Martin R, Muuls M, Wagner UJ, 2015, Trading Behavior in the EU ETS, Workshop on Emissions Trading as Climate Policy Instruments - Evaluation and Prospects, Publisher: MIT PRESS, Pages: 213-238

Conference paper

Martin R, Dechezleprêtre A, Gennaioli C, Muûls Met al., 2014, Searching for carbon leaks in multinational companies, Publisher: Imperial College Business School

Working paper

Martin R, Muûls M, de Preux LB, Wagner UJet al., 2014, On the empirical content of carbon leakage criteria in the EU Emissions Trading Scheme, Ecological Economics, Vol: 105, Pages: 78-88, ISSN: 0921-8009

The EU Emissions Trading Scheme continues to exempt industries deemed at risk of carbon leakage from permit auctions. Carbon leakage risk is established based on the carbon intensity and trade exposure of each 4-digit industry. Using a novel measure of carbon leakage risk obtained in interviews with almost 400 managers at regulated firms in six countries, we show that carbon intensity is strongly correlated with leakage risk whereas overall trade exposure is not. In spite of this, most exemptions from auctioning are granted to industries with high trade exposure to developed and less developed countries. Our analysis suggests two ways of tightening the exemption criteria without increasing relocation risk among non-exempt industries. The first one is to exempt trade exposed industries only if they are also carbon intensive. The second one is to consider exposure to trade only with less developed countries. By modifying the carbon leakage criteria along these lines, European governments could raise additional revenue from permit auctions of up to €3 billion per year, based on a permit price of €30.

Journal article

Martin R, Muûls M, de Preux LB, Wagner UJet al., 2014, Industry compensation under relocation risk: a firm-level analysis of the EU Emissions Trading Scheme, The American Economic Review, Vol: 104, Pages: 2482-2508, ISSN: 0002-8282

When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyzing compensation rules proposed under the EU Emissions Trading Scheme, where emission permits are allocated free of charge to carbon intensive and trade exposed industries. We show that this practice results in substantial overcompensation for given carbon leakage risk. Efficient permit allocation reduces the aggregate risk of job loss by more than half without increasing aggregate compensation.

Journal article

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