Second Best Environmental Policies under Uncertainty

We construct a strategic environmental policy model of an international duopoly. Governments use environmental policies, such as an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to firms, however, governments are unable to perfectly foresee the actual level of demand and the cost of abatement. Our results suggest that not only the presence but also the absolute level of uncertainty matters for the optimal choice of the environmental policy instrument. Moreover, the optimality conditions under strategic behavior may lead to welfare losses relative to the cooperative outcomes because of under‐regulation and lack of policy coordination between the two countries.     

Reassessing Moral Legitimacy in Times of Instability

The presence of conflicting cues about what is legitimate provided by various stakeholders, begs the question of how the legitimacy of contested institutionalized practices is justified. Recent critique of tax minimization strategies exemplifies this difficulty: on one hand, practitioners need to increase shareholders' profits; on the other, a growing number of stakeholders push for ‘fairer’ corporate tax payments. Conducted during a time of public criticism of Australian corporate tax strategies, our study draws on justifications of corporate tax minimization strategies by senior tax practitioners and corporate submissions to a Senate Inquiry on corporate tax avoidance. The study explores how legitimacy judgements come under pressure by conflicting cues. Through the application of Boltanski and Thévenot's (2006) Economies of Worth (EW) framework, we advance legitimacy scholarship by clarifying what constitutes situated judgements in times of instability. Our work puts forward the concept of perceived forecasted consensus as a guide for individuals in making situated legitimacy judgements in times of instability.     

The time-varying independence of Italian peak judicial institutions

The paper investigates the stability of the degree of independence of the judiciary vis à vis both the classical political branches and other independent institutions, such as regulatory agencies, using evidence about the Italian Constitutional Court and the Council of State. Both peak judicial courts feature time varying factors of independence that affect their jurisprudence, especially in the case of the legitimacy review by the Constitutional Court. The less conclusive evidence found in the Council of State related to decisions of independent regulatory authorities might be due to the more complex set of interactions in which the Council operates.     

A model of the Italian cut-off system for taxing small businesses

The Studi di Settore are used by the Italian tax administration to calculate reference revenue levels for small businesses and provide a kind of cut-off level for tax audits. Recently new rules have been introduced in order to render the Studi di Settore more efficient in producing realistic estimates, with the aim of reducing the “legalized evasion” that might arise in case of a systematic downward bias. Voices of the involved categories, however, convinced the Government to partially step back. Building upon the standard firm’s tax evasion model of Cowell [Cowell, F.A., 2004. Carrots and sticks in enforcement. In: Aaron, H.J., Slemrod, J. (Eds.), The Crisis in Tax Administration. The Brookings Institution, Washington DC, pp. 230–275] and the approach of Santoro [Santoro, A.C., 2006. Evasione delle società di capitali: evidenze empiriche e proposte di policy. In: Brosio, G., Muraro, M. (Eds.), Il Finanziamento del Settore Pubblico. SIEP, Angeli, Milano, pp. 163–186] we show that, under given conditions, a stringency increase might backfire implying a larger overall tax evasion and a smaller tax revenue.     

Form of Ownership and Financial Constraints:Panel Data Evidence From Flow of Funds and Investment Equations

This paper analyzes the effects of the form of ownership on the substitutability between internal and external sources of finance in Italy. In particular, we test whether financial constraints are more severe for independent firms compared to members of large national business groups and subsidiaries of foreign multinational corporations. The results obtained from flow of funds and investment equations estimated for a panel of Italian companies imply that independent firms face more severe financial constraints. In fact, not only members of national groups and subsidiaries of multinational corporations find it easier to substitute cash flow with external finance when the former falls but they do not display excess sensitivity to cash flow and debt in their investment decisions.     

Decisions on Production and the Behaviour of Savers in Recent General Equilibrium Models

Modern general equilibrium theory faces notorious difficulty in extending the analysis of production to economies without complete forward markets, since at the ‘initial date’ the owners of any firm will typically disagree about the choice of the production plan. This paper examines the main approaches to the problem, with the specific aim of verifying whether they allow a satisfactory account of the interplay between firms and savers. It is argued that the theory oscillates between assumptions that may prove incompatible with savers' rationality, and hypotheses that prevent this shortcoming but render the formation of production decisions quite hard to explain.     

Updates management in mobile applications: iTunes versus Google Play

This paper focuses on a specific strategy that developers of mobile applications may use to stimulate demand: The release of updates. We develop a theoretical analysis that shows that developers have incentives to release updates when experiencing a drop in performance. The predictions of the model are then tested using an unbalanced panel of top 1,000 apps in iTunes and Google Play for five European countries. We estimate that while in iTunes the release of an update stimulates a 26% increase in download growth, in Google Play updates play a less significant role. This difference is partly due to systematic differences in apps and in developers operating in the two stores (“selection effect”), and partly to a lack of quality control on apps and updates in Google Play (“quality check effect”). These findings highlight the crucial importance of an appropriate management of updates as well as the relevance of institutional characteristics of the app stores.     

From central planning towards a market economy: The role of ownership and competition in Vietnamese firms’ productivity

This paper examines the role of ownership and market competition in Vietnamese firms’ total factor productivity (TFP) from 2001 to 2011. Making use of a large panel dataset of manufacturing firms, we find that, on average, both foreign-owned enterprises (FOEs) and state-owned enterprises (SOEs) have performed better than privately owned enterprises (POEs) in terms of their TFP levels. However, while FOEs’ TFP ranked the highest in the period 2001–2006, SOEs “closed the gap” in the period 2007–2011. Moreover, we find that market competition has been effective in enhancing average firm productivity and in reducing the gaps in efficiency across ownership types. SOEs’ remarkable performance may be linked to several concurrent factors experienced during the period 2001–2011, namely, the process of restructuring the state sector during the 2000s, the increased economic integration due to the country's accession to the World Trade Organization (2007) and, finally, the preferential access to financial capital and land granted to SOEs. While some evidence supports SOEs’ equitization as an explanation for their remarkable productivity performance, WTO accession and cheaper access to inputs do not fully explain it.