JOB MARKET PAPER
The Anticompetitive Effect of Trade Liberalization (joint with C. Fuss and L. Trimarchi)
Abstract: Recent decades have been characterized by a surge in firms' market power within the global economy. In this paper, we study the role played by globalization in determining the evolution of markups in the small open economy of Belgium. Using detailed balance sheets and trade data for manufacturing firms over the period 2000-2015, we provide evidence of the role played by Chinese import competition on the evolution of various measures of market power. According to our estimates, the China shock increased aggregate markups and induced higher market concentration and markup dispersion.
These changes are driven not by the reallocation of market shares towards high-markup firms but by increases within incumbents along with productivity gains. Our findings suggest a winner-take-most type of rationale behind the observed increase in market power.
Abstract: Recent decades have been characterized by a surge in firms' market power within the global economy. In this paper, we study the role played by globalization in determining the evolution of markups in the small open economy of Belgium. Using detailed balance sheets and trade data for manufacturing firms over the period 2000-2015, we provide evidence of the role played by Chinese import competition on the evolution of various measures of market power. According to our estimates, the China shock increased aggregate markups and induced higher market concentration and markup dispersion.
These changes are driven not by the reallocation of market shares towards high-markup firms but by increases within incumbents along with productivity gains. Our findings suggest a winner-take-most type of rationale behind the observed increase in market power.
WORKING PAPERS
Demand Shocks, Sector-level Externalities, and the Evolution of the Comparative Advantage
IRES Discussion Paper, no. 7/2019.
Abstract: Does production size play any role in industrial productivity? And how important is its contribution to the evolution of comparative advantage over time? In this paper, I develop a multi-country multi-sector general equilibrium model of trade characterized by the presence of inter-temporal sector-level externalities. The model makes explicit the mechanism linking size and productivity and delivers at the equilibrium a dynamic gravity model of trade that can be empirically tested. I structurally estimate the dynamic scale parameter by exploiting exogenous demand shocks uncorrelated to any supply-side component of production. Results show that production scale can be a potential source of comparative advantage, with an estimated average dynamic scale parameter of 0.18. However, potential gains are heterogeneous, with values ranging between 0.12 and 0.20 across different industries.
IRES Discussion Paper, no. 7/2019.
Abstract: Does production size play any role in industrial productivity? And how important is its contribution to the evolution of comparative advantage over time? In this paper, I develop a multi-country multi-sector general equilibrium model of trade characterized by the presence of inter-temporal sector-level externalities. The model makes explicit the mechanism linking size and productivity and delivers at the equilibrium a dynamic gravity model of trade that can be empirically tested. I structurally estimate the dynamic scale parameter by exploiting exogenous demand shocks uncorrelated to any supply-side component of production. Results show that production scale can be a potential source of comparative advantage, with an estimated average dynamic scale parameter of 0.18. However, potential gains are heterogeneous, with values ranging between 0.12 and 0.20 across different industries.
Globalization and the Urban-Rural Divide in France (joint with F. Mayneris and G. Vannoorenberghe) - Draft available upon request
Abstract: Does globalization exacerbate the economic divide between urban and rural areas? Using establishment-level data for France over the period 1995-2015, we construct the domestic firms’ linkage structures across French Employment Zones (EZ). For any EZ pair, we define a linkage as the presence of at least one establishment in both EZs that belong to the same firm or group. We complement this measure of connectedness between EZs with a proxy for domestic trade and a measure of industrial dissimilarity. Along with information about the domestic firms' linkages, we exploit municipality-level information to construct an index of urbanization degree and customs data to define various measures of exposure to globalization. We document that i) over the sample period, employment in large urban areas grows, on average, faster than in rural/medium urban EZs; ii) rural/medium urban areas’ employment growth is positively associated with the presence of firms’ linkages to large, fast-growing urban areas; eventually, but only preliminary, iii) exposure to globalization reduces the number of firms' linkages between EZs.
Abstract: Does globalization exacerbate the economic divide between urban and rural areas? Using establishment-level data for France over the period 1995-2015, we construct the domestic firms’ linkage structures across French Employment Zones (EZ). For any EZ pair, we define a linkage as the presence of at least one establishment in both EZs that belong to the same firm or group. We complement this measure of connectedness between EZs with a proxy for domestic trade and a measure of industrial dissimilarity. Along with information about the domestic firms' linkages, we exploit municipality-level information to construct an index of urbanization degree and customs data to define various measures of exposure to globalization. We document that i) over the sample period, employment in large urban areas grows, on average, faster than in rural/medium urban EZs; ii) rural/medium urban areas’ employment growth is positively associated with the presence of firms’ linkages to large, fast-growing urban areas; eventually, but only preliminary, iii) exposure to globalization reduces the number of firms' linkages between EZs.
WORK IN PROGRESS
Factors' Prices and Technology Adoption: Evidence from the EU Agricultural Sector (joint with A. Frigo and R. Turati)
Credit Supply and Market Power (joint with M. Pelosi, E. Sette and L. Trimarchi)
Credit Supply and Market Power (joint with M. Pelosi, E. Sette and L. Trimarchi)
