Working papers:

"Shocks and the organisation of the firm: who pays the bill?"

Winner of: Best Presentation Award (Unicredit & Universities)

Abstract: What happens to firms’ organisational structure when they are hit by a negative shock? By matching employer-employee data with firm loans and bank balance sheets, I study firm reactions to a credit shock–the global financial crisis–and compare it to a trade shock–the entry of China in the WTO. When hit by a credit supply shock, firms reduce employment of higher skilled workers more than lower skilled production workers, while no adjustment is found on the wages. In contrast, a trade shock affects the hierarchy of the firm from the bottom to the top: firms rescale the organisation and reduce employment at all levels. Results support the existence of heterogenous complementarities between capital and skills along the hierarchy of the firm: a shock to credit hits workers in the middle of the hierarchy, while a trade induced demand shock affects the scale of the firm, hence all skills proportionally.

Revise and resubmit at the Journal of Political Economy

Working papers: NBER, CEPR DP12213, CEP DP 1494.

Media coverage: VOXEU

Abstract: The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equilibrium model with trade in goods and labor mobility across countries to study and quantify the economic effects of trade and labor market integration. In our model trade is costly and features households of different skills and nationalities facing costly forward-looking relocation decisions. We use the EU Labour Force Survey to construct migration flows by skill and nationality across 17 countries for the period 2002-2007. We then exploit the timing variation of the 2004 EU enlargement to estimate the elasticity of migration flows to labor mobility costs, and to identify the change in labor mobility costs associated to the actual change in policy. We apply our model and use these estimates, as well as the observed changes in tariffs, to quantify the effects from the EU enlargement. We find that new member state countries are the largest winners from the EU enlargement, and in particular unskilled labor. We find smaller welfare gains for EU-15 countries. However, in the absence of changes to trade policy, the EU-15 would have been worse off after the enlargement. We study even further the interaction effects between trade and migration policies and the role of different mechanisms in shaping our results. Our results highlight the importance of trade for the quantification of the welfare and migration effects from labor market integration.

Working papers: CEPR DP 11706, CEP DP 1458, CESifo WP, Banco de Portugal WP 1/2017

Media coverage: The world Economic Forum, VOXEU and LSE Business Review, Lavoce (Italian)

Abstract: Better managers and managerial practices lead to better firm performance. Yet, little is known about what happens when managers move across firms. Does a firm hiring a good manager improve its performance? If yes is there some valuable knowledge the manager has acquired and successfully diffused to the new firm? In order to answer these questions we use information related to specific activities the manager was involved in when working for previous firms: exporting. Crucially, we exploit the end of the civil war in Angola as an event study to account for the endogeneity of the matching between managers and firms. Our data is rich enough to allow controlling for both manager and firm unobservables and wash out any time-invariant ability of the manager as well as overall firm performance. We find that the export experience gained by managers in previous firms leads their current firm towards higher export performance, and commands a sizable wage premium for the manager. We further refine our analysis by looking at different types of managers (general, production, financial and sales) and show how specific export experience interacts with the degree of product differentiation and/or the financial vulnerability of a firm’s products as well as with rising import competition from China.

Work in progress:

  • "Labor rigidities and the (non-)cleansing effects of credit shocks" (Joint with Edoardo M. Acabbi and Ettore Panetti)

Abstract: This paper examines the effect of variation in voter turnout to electoral outcomes in Italy. I use data on spatial distribution of turnout for 2008 and 2013 to examine how it can affect differences in electoral outcomes. Exploiting the exogenous variation in weather conditions across municipalities I use rainfalls to instrument for turnout levels: if non-voters systematically differ from habitual voters in terms of their characteristics or preferences, the effect of turnout on the electoral outcome can generate "extreme" outcomes. I find that bad weather decreases turnout and that a higher turnout favours the Movimento 5 Stelle, while both the Democrats and the Centre are negatively affected.

Policy Papers:

The Performance of TNCs’ Affiliates across European Regions, C. Altomonte, L. Saggiorato and A. Sforza, UNCTAD, TNC Journal (2012) here

FDI in Lombardy: A comparative analysis of Foreign Direct Investments across European Regions, C. Altomonte, L. Saggiorato and A. Sforza, Camera di Commercio di Milano (2012) here