Globalisation and local labour markets

This paper begins with a review of the literature on the labour market’s impact of globalisation. An interesting case-study is provided by the province of Brescia, an industrial area in Northern Italy, where both de-localisation and immigration have been two important means of reducing the pressure of labour demand on the locally scarce human resources. The conclusion is that, in order to preserve competitive positions in the long run, it is worthy to consider the qualitative consequences, e.g. the indispensable changes in the structure of production, rather than focusing on the quantitative effects on domestic employment. This paper was presented at the International Conference on “Developments in Economic Theory and Policy, Institutions and European Integration”, Bilbao, 15–17 July, 2004. It is part of a wider research: see the Working Paper by Albertini and Marelli (2003). The sections prepared by S.Albertini, referring to organisational change and human resources management implications, are not included in this final paper. I am grateful to anonymous referees for helpful comments.     

Exporters and Importers of Services: Firm‐Level Evidence on Italy

This work contributes to the growing literature on international trade in services at firm level. Our data set provides information on exports and imports of services (excluding transportation and travel) in 2008–09 for almost 3,000 Italian industrial and services firms, divided by partner country and type of service. We report a set of stylised facts on services trade and analyse the choice between export and foreign direct investment in services at the firm level. We find that the export and import of services are highly concentrated in just a few firms. Firm‐level variation in trade is positively correlated with firm size and productivity. Country‐level variation is to a large extent explained by the standard gravity variables: distance strongly reduces trade in services in spite of their intangibility. Smaller and less productive firms choose to export rather than sell through foreign affiliates, although there is some heterogeneity among service types.     

Finance and inequality: Channels and evidence

We provide a framework to interpret the recent literature on financial development and inequality. In many developing countries, access to funding and financial services by firms and households is still very skewed. Recent evidence suggests that poor access does not only reflect economic constraints but also barriers erected by insiders. Inequality affects the distribution of political influence, so financial regulation often is easily captured by established interests in unequal countries. Captured reforms deepen rather than broaden access, as small elites obtain most of the benefits while risks are socialized. Financial liberalization motivated to increase access may in practice increase fragility and inequality, and lead to political backlash against reforms. Thus financial reforms may succeed only if matched by a buildup in oversight institutions. Journal of Comparative Economics 35 (4) (2007) 748–773.     

Why are crude oil prices high when global activity is weak?

There have been substantial increases in liquidity in recent years and real oil prices have almost returned to the high levels achieved before the global financial crisis. Unanticipated increases in global real M2 led to statistically significant increases in real oil prices. The historical impact of global real M2 on the real price of crude oil is important in the recovery of oil prices over 2009 to 2011.     

Security Markets versus Bank Finance: Legal Enforcement and Investors' Protection

When minority investors’ rights are poorly protected, the ability of firms to raise equity capital is impaired, leading to less finance for new ventures. Fewer firms will be financed with outside equity, resulting in a low market capitalization relative to GNP. External funding requires easily enforceable claims such as debt or requires long‐term relationships with institutions. Provision of funding shifts from risk capital to debt, and to a predominance of intermediated over market finance. We report supporting evidence for a few countries. To measure investor protection, we use a price measure, the premium on voting stock, related to the control premium. In countries where the voting premium is large, corporate financing is dominated by bank lending and equity markets are much smaller.