Lorien Sabatino

Welcome to my website!

I am a Postdoctoral Researcher at the Polytechnic University of Turin (DIGEP).

My research interests are Applied Microeconomics, Industrial Organization, Innovation, Market Regulation & Competition Policy, and Digital Economics.

I received my Ph.D. in economics from the Vilfredo Pareto Doctorate in Economics held by the University of Turin & Collegio Carlo Alberto.

You can download my cv here.

Working Papers:

Digital Highways and Firm Turnover (with Carlo Cambini) - Under review

We study the impact of ultra-fast broadband (UBB) internet connections on firm entry and exit dynamics. These connections are based on optical fiber cables that link telecommunication operators to final users, allowing a significantly higher performance compared to traditional copper-line networks. We leverage on a unique comprehensive dataset collecting municipality-level information on broadband diffusion and firm turnover in Italy for the period 2012-2019. Our empirical strategy exploits the staggered roll-out of UBB, starting from 2015. Using an event study design, we find that UBB increases firm exit, particularly for small firms. At the opposite, ultra-fast connections have negligible effects on firm entry. Results are confirmed by instrumental variable estimates that exploit plausibly exogenous variation in the physical and geographical peculiarities of the telecommunication infrastructure, both at local and national levels. Exploring potential mechanisms, we find that the increased competition posed by digitization can explain the rise in firm exit. Our findings have important implications for the ongoing debate around the massive investments in high-speed digital infrastructures, as they argue against the conventional idea that business activities equally benefit from last generation broadband technologies.

Online Privacy and Market Structure: Theory and Evidence (with Geza Sapi) - R&R Information Economics and Policy

This paper investigates how privacy regulation affects the structure of online markets. We empirically analyze the effects of the 2009 ePrivacy Directive in Europe on firm revenues. Our results indicate that, if any, only large firms were weakly negatively affected by the implementation of the Directive. We also provide a simple theoretical model predicting an avenue how the privacy regulations may predominantly influence the revenues and profits of larger firms, even if - as some of our evidence indicates - these larger firms may actually offer more privacy than smaller rivals. Our results suggests that while privacy regulation is not without costs to businesses, it need not distort competition to the favor of larger firms.

Ultra-Fast Broadband Access and Productivity: Evidence from Italian Firms (with Carlo Cambini and Elena Grinza) - R&R IJIO

We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013-2019 period on incorporated firms in Italy. Using the geographical location of the firms, we match firm data with municipality-level information on the diffusion of UFB, which started in 2015 in Italy. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the NorthWest and South of Italy. We further decompose the impact of full-fiber networks (FTTH) from mixed copper-fiber connections (FTTC) and find that FTTH networks significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level.

The Impact of Privacy Regulation on Web Traffic: Evidence from the GDPR (with Raffaele Congiu and Geza Sapi) - Under review

We use traffic data from around 5,000 web domains in Europe and United States to investigate the effect of the European Union’s General Data Protection Regulation (GDPR) on web traffic and visitor behaviour. We document an overall traffic reduction of approximately 15% in the long-run and find a measurable reduction of user engagement with websites. Traffic from direct visits, organic search, email and social media marketing, display ads and referrals dropped significantly, but paid search traffic - mainly Google search ads - was barely affected. We observe an inverted U-shaped relationship between website size and change in visits due to privacy regulation: the smallest and largest websites lost visitors, while medium ones were less affected. Our results are consistent with the view that users care about privacy and may defer visits altogether in response to website data handling policies. Privacy regulation can impact market structure and may increase dependence on large advertising service providers. Enforcement matters as well: The effects were amplified considerably in the long-run, following the first significant fine issued eight months after full entry into force.

The Faster the Better? Advanced Internet Access and Student Performance (with Carlo Cambini and Sarah Zaccagni)

In this paper, we study the impact of high-speed internet access on student performance. Our empirical analysis leverages a unique dataset that combines information on ultra-broadband (UBB) diffusion in Italy with data on student performance in 2nd, 5th, and 8th grades for the period 2012-2017. We exploit the staggered roll-out of UBB, starting from 2015. Through an event study approach, we find evidence of endogeneity between student performance and broadband diffusion. We deal with this issue through an instrumental variable approach that exploits plausibly exogenous variation in the diffusion of the essential UBB input. Our results suggest that advanced internet connections significantly decrease student performance in Mathematics and Italian language in the 8th grade. In contrast, we do not find any significant effect in the 2nd and 5th grades. Male students from low-educated parental backgrounds are those more adversely affected, especially if they attend schools with a low IT usage.

Work in Progress:





Postal Address:

Polytechnic University of Turin

Department of Management and Production Engineering

Corso Duca degli Abruzzi 24, 10129 Turin, Italy