Compensations as signaling devices in the political economy of reforms*

We propose an explanation for why efficient reforms are not carried out when losers can block their implementation and compensations are feasible. In our model, a government tries to sequentially implement two efficient reforms by bargaining with interest groups. The organization of interest groups is endogenous. Compensations are distortionary and different governments care differently about distortions. Governments use low compensations to discourage losers who just want to receive transfers from organizing. This comes at the cost of reforms being blocked by interest groups with relatively high losses, resulting in a bias against payment of compensations and the implementation of reforms.     

The globalisation of technology and its implications for developing countries: Windows of opportunity or further burden?

On the basis of a categorisation of ways in which the generated knowledge is transmitted, this paper explores the impact of the different forms of the globalisation of technology on developing countries. Through travelling, media, scientific and technical workshops, Internet and many other communication channels, globalisation allows the transmission of knowledge at a much greater pace than in the past. However, this does not automatically imply that developing countries succeed to benefit from technological advances. On the contrary, this will strongly rely on the nature of the technology and of the policies implemented in both advanced and developing countries.     

Long-run Effective Demand in the US Economy: An Empirical Test of the Sraffian Supermultiplier Model

The Sraffian supermultiplier is a model of demand-led growth that stresses the importance of the autonomous components of aggregate demand (exports, public spending and autonomous consumption). This article tests empirically some major implications of the model employing macroeconomic data for the United States. In particular, we study the long-run relation between autonomous demand and output through cointegration analysis. The results suggest that autonomous demand and output are cointegrated and that autonomous demand exerts a long-run effect on output. There is also some evidence of simultaneous causality, especially in the short-run. Movements in autonomous demand and in the investment share are also found to be positively related, with Granger-causality going from Z to I/Y.     

Riding out of a financial crisis: The joint effect of trust and corporate ownership

We study how generalized trust shapes the ability of firms with different ownership forms to obtain trade financing and perform during a financial crisis. Exploiting geographic variations in trust across Italian regions and the occurrence of the 2008-09 financial crisis in a difference-in-differences setting, we show that generalized trust makes family firms less able to obtain trade financing during the crisis. This finding maps into performance results: trust alleviates the negative effect of a crisis for non-family firms, while it aggravates the negative effect for family firms. This latter result depends crucially on a firm's corporate governance: trust does not harm family firms whose board is open to non-family directors. Collectively, our findings illustrate how culture interacts with corporate attributes in shaping a firm's prospects.     

The Impact of Degree Duration on Higher Education Participation: Evidence from a Large‐scale Natural Experiment

This paper investigates the effects on enrolment, retention rate and on‐time graduation of a nationwide Bologna Process reform introduced in Italy to establish BAs with a duration of three years, followed by optional second‐tier degrees of two years, in place of single‐tier degrees of four or five years. The analysis exploits exogenous delay of treatment conditions and the unique availability of microdata that cover the universe of the departments. We estimate that the reform boosted first‐year enrolments by 14.5–17.3 percentage points, compared to a counterfactual status of no reform. This enrolment shift was due to participation gains rather than substitution effects, and it is likely to have persisted in the longer term. Moreover, no trade‐off between increased participation and deteriorated retention and on‐time graduation emerged.     

Evolutionary variational inequalities and applications to complex dynamic multi-level models

In this paper we consider a supply chain network model with three tiers of decision-makers (manufacturers, retailers, and consumers) in the case when prices and shipments are evolving on time. Moreover, we assume that excesses of production and excesses of demand of the commodity are present. For such a framework we furnish, using the infinite dimensional duality theory, the equilibrium conditions for the representatives of each tier of the supernetwork, the time-dependent variational formulation governing the complete supply chain supernetwork, and we provide some existence theorems and a numerical example.     

How do managerial successions shape corporate financial policies in family firms?

Despite recent evidence on the importance of chief executive officer (CEO) successions in family firms, we still know little about the differences in corporate strategies entailed by family and professional managers around transition. We investigate the consequences of managerial successions for the financial policies of Italian family firms. Our findings indicate that the appointment of non-family professional CEOs leads to a significant increase in the use of debt, primarily driven by short-term maturities. We document substantial heterogeneity in the impact of professional successions on debt financing: the increase in debt is particularly pronounced for young firms, firms with a high level of investment, and firms in which the controlling family maintains a dominant representation on the board of directors. Examining the importance of financial flexibility, we find that the increase in debt occurs primarily when firms are cash-poor, and when incoming CEOs can exploit spare borrowing capacity.     

The Impact of Social Comparisons on Reciprocity*

In this paper, we investigate how social comparison information about referent others (i.e., learning what similar others do, and how they are treated) affects reciprocal relationships. Using three‐person gift‐exchange games, we study how employees’ reciprocity towards an employer is affected by pay comparison information (what co‐workers earn) and effort comparison information (how co‐workers perform). We find strong evidence of the effects of effort comparison: employees are more willing to reciprocate by choosing high effort in response to a high wage if they observe others doing so. In our setting, we find somewhat weaker evidence of the effects of pay comparison.