Little is known about where hotspots of gentrification emerge within a city and the role that some types of businesses play in the process. We develop a method to detect the sectors whose presence heralds the process of gentrification in a neighborhood. We show that these sectors, mostly found in cultural and creative industries, help to anticipate neighborhood change and that their predictive power complements that of traditional gentrification determinants. We also examine mechanisms related to amenities, worker characteristics, and signaling that are consistent with these results. The analysis illustrates the importance of businesses in the sociodemographic dynamics of neighborhoods.

We study how stickiness in business relationships influences the trade impact of aggregate uncertainty. To begin, we construct a product-level index of relationship stickiness using firm-to-firm relationship duration data. We then demonstrate how relationship stickiness shapes trade dynamics in response to uncertainty shocks. We find that episodes of uncertainty lead to a decline in the overall establishment of new business relationships, with the impact varying depending on the level of stickiness. In markets characterized by high stickiness, uncertainty shocks primarily impede investments in new firm-to-firm relationships. In contrast, for non-sticky products, the adjustment to uncertainty shocks mainly manifests as the disruption of existing relationships.

This paper analyzes the transfer pricing of multinational firms. Intrafirm prices may systematically deviate from arm’s-length prices for two motives: pricing to market and tax avoidance. Using French firm-level data on arm’s-length and intrafirm export prices, we find that the sensitivity of intrafirm prices to foreign taxes is reinforced once we control for pricing-to-market determinants. Most important, we find no evidence of tax avoidance if we disregard tax haven destinations. Tax avoidance through transfer pricing is economically sizable. The bulk of this loss is driven by the exports of 450 firms to ten tax havens.