Imperial College London

Ralf Martin

Business School

Professor of Economics
 
 
 
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Contact

 

+44 (0)20 7594 2615r.martin CV

 
 
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Location

 

CAGB 487City and Guilds BuildingSouth Kensington Campus

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Summary

 

Publications

Publication Type
Year
to

65 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

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

Dechezlepretre A, Einio E, Martin R, Kieu Nguyen T, van Reenen Jet al., 2023, Do tax incentives increase firm innovation? an RD design for R&D, patents, and spillovers, American Economic Journal: Economic Policy, Vol: 15, Pages: 486-521, ISSN: 1945-7731

We present evidence of the positive causal impacts of research and development (R&D) tax incentives on a firm’s own innovation and that of its technological neighbors (spillovers). Exploiting a change in the assets-based size thresholds that determine eligibility for R&D tax relief, we implement a Regression Discontinuity (RD) Design using administrative data. We find statistically and economically significant effects of tax relief on (quality-adjusted) patenting (and R&D) that persist up to seven years after the change. Moreover, we also find causal evidence of R&D spillovers on the innovation of technologically close peer firms. We can rule out elasticities of patenting with respect to the user cost of R&D of under 2 at the 5% level and show evidence that our large effects are likely because the treated group are more likely to be financially constrained.

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

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

Working paper

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, Benabou R, Aghion P, Roulet Aet al., 2023, Environmental preferences and technological choices: is market competition clean or dirty?, The American Economic Review Insights, Vol: 5, Pages: 1-20, ISSN: 2640-2068

We investigate the effects of consumers’ environmental concerns and market competition on firms’ decisions to innovate in “clean” technologies. Agents care about their consumption and environmental footprint; firms pursue greener products to soften price competition. Acting as complements, these forces determine R&D, pollution, and welfare. We test the theory using panel data on patents by 7,060 automobile sector firms in 25 countries, environmental willingness to pay, and competition. As predicted, exposure to prosocial attitudes fosters clean innovation, all the more so where competition is strong. Plausible increases in both together can spur it as much as a large fuel price increase. (JEL D22, L62, O31, O34, Q52, Q53, Q54)

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

Martin R, Mohnen P, Thomas C, Verhoeven D, Guillard Cet al., 2021, Efficient Industrial Policy for Innovation: Standing on the Shoulders of Hidden Giants

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

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

Barker M, Degond P, Martin R, Muûls Met al., 2021, A mean field game model of firm-level innovation, Publisher: arXiv

Knowledge spillovers occur when a firm researches a new technology and thattechnology is adapted or adopted by another firm, resulting in a social valueof the technology that is larger than the initially predicted private value. Asa result, firms systematically under--invest in research compared with thesocially optimal investment strategy. Understanding the level ofunder--investment, as well as policies to correct it, is an area of activeeconomic research. In this paper, we develop a new model of spillovers, takinginspiration from the available microeconomic data. We prove existence anduniqueness of solutions to the model, and we conduct some initial simulationsto understand how indirect spillovers contribute to the productivity of asector.

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

Martin R, Unsworth S, Valero A, Verhoeven Det al., 2020, Innovation for a strong and sustainable recovery

Report

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

Martin R, Roulet A, Aghion P, Bénabou Ret al., 2020, Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty?, Publisher: NBER Working Paper No 26921

Working paper

Gosnell G, Martin R, Muûls M, Coutellier Q, Strbac G, Sun M, Tindermans Set al., 2019, Making Smart Meters Smarter the Smart Way

We report first results from a large scale randomized control trial of different forms of energy consumption feedback facilitated by smart meters and smart phone feedback apps. Nearly 40,000 customers of a large energy retailer in the UK were exposed to either very basic feedback apps-i.e. simply giving consumers access to monthly energy consumption-or more advanced feedback involving peer group comparisons as well as dis-aggregation of total electricity consumption. We find that more advanced feedback can lead to an average consumption reduction of nearly 4% (Intent to Treat). Taking into account that a large number of customers never sign in to any feedback apps suggests that the reduction effect among customers that do sign in is up to 12%. The smart meter installation was implemented by different installation firms across our sample and we find the reduction effect only for one customers of one installer who displays higher capabilities along a number of metrics. This could suggest that achieving energy preservation objectives does not only depend on the technology involved but also on the capabilities and skills of firms installing those technologies. In the UK, smart meters are by default installed with In Home Displays (IHD) that provide real time feedback on energy use. Some of the customers in our sample did not receive an IHD and we explore if this had any impact on the consumption reduction effect described above. Customers with (and without) IHD comprise a self-selected sample so we have to be careful in drawing causal conclusions. However, we do not find any evidence that any energy reducing effect is contingent on IHDs.

Working paper

Criscuolo C, Martin R, Overman H, van Reenen Jet al., 2019, Some causal effects of an industrial policy, American Economic Review, Vol: 109, Pages: 48-85, ISSN: 0002-8282

Business support policies designed to raise employment and productivity are ubiquitous around the world. We exploit changes in the area-specific eligibility criteria for a major program to support manufacturing jobs through investment subsidies (Regional Selective Assistance). European state aid rules determine whether a sub-national geographical area is eligible for these subsidies, and we construct instrumental variables for area (and plant) eligibility based on the estimated parameters of these rule changes. We find areas eligible for higher subsidies significantly increase manufacturing jobs and reduce unemployment. An exogenous ten-percentage point increase in an area’s maximum investment subsidy stimulates about a 9% increase in manufacturing employment. The treatment effect exists solely for small firms – large companies appear to “game” the system, accepting subsidies without increasing activity. There are positive effects on investment and employment for incumbent firms but no effect on Total Factor Productivity.

Journal article

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

Martin R, Van Reenen J, Elias Einiö E, Nguyen K-T, Dechezleprêtre Aet al., 2016, Do tax Incentives for Research Increase Firm Innovation? An RD Design for R&D

Working paper

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