Working papers and Works in progress

This paper quantifies the balance sheet consequences of ransomware attacks on European firms. We match attacks posted on leak sites between 2020 and 2024 to the financial accounts of 1,934 non-listed firms and compare them with about 10.6 million never-attacked firms. Targeted firms are larger, more productive and more capital-intensive. Using a doubly robust staggered difference-in-differences estimator, we find that the quick ratio falls by about 4 percent in the year of the attack and 10 percent two years later, as current liabilities rise relative to total assets and cash holdings decline. Non-current liabilities do not rise, and the equity ratio shows no robust change. Among the firms that report an income statement, operating performance shows no significant response. Point estimates are larger for attacks that ended in a recorded data leak. Overall, ransomware operates chiefly as a short-run working-capital shock, absorbed by drawing down cash and by short-term rather than long-term liabilities.

I propose a mechanism for the coexistence of vertical integration and outsourcing within an industry. In a monopolistically competitive model with incomplete contracts, final-good producers under either organizational form combine labor and differentiated inputs to produce fixed capital. Since its unit cost depends on the industry price index, distinct zero-profit conditions can hold, sustaining a mixed free-entry equilibrium. The forms differ in fixed-capital cost per unit of contribution to the price index; this ranking determines comparative statics and whether local stability is possible. I derive a sufficient condition ensuring stability whenever the mixed equilibrium exists. In numerical parameterizations using empirically standard elasticities of substitution, the condition holds throughout the admissible range of vertical-linkage intensity. Within the stable region, larger markets raise the integrated share without changing output prices or supplier bargaining terms. Relative firm size depends on governance costs and upstream bargaining share, so the model imposes no uniform ranking.