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.
Economic Linkages and the Urban-Rural Divide in France (joint with F. Mayneris and G. Vannoorenberghe)
Abstract: In recent years, high-income economies have experienced diverging economic trends between large urban areas and rural peripheries. Using rich administrative micro data for France over the 1995-2015 period, we show that changes in the spatial transmission of economic shocks do not drive urban-biased employment growth. We start by documenting three main stylized facts: first, employment in large urban areas grows faster relative to the rest of the country. Second, proximity to large urban areas generates positive spillovers to employment growth. Third, the proximity to urban premium is stable over time. Motivated by these findings, we build and estimate a spatial general equilibrium model that endogenizes regional linkages through multi-region firms' economies of scale. The model allows to quantify the role of preferences and productivity shocks in shaping the evolution of employment across locations. Using theory-consistent measures of linkages, we show that the urban-rural divide does not explain the diverging employment trends across French locations.
Abstract: In recent years, high-income economies have experienced diverging economic trends between large urban areas and rural peripheries. Using rich administrative micro data for France over the 1995-2015 period, we show that changes in the spatial transmission of economic shocks do not drive urban-biased employment growth. We start by documenting three main stylized facts: first, employment in large urban areas grows faster relative to the rest of the country. Second, proximity to large urban areas generates positive spillovers to employment growth. Third, the proximity to urban premium is stable over time. Motivated by these findings, we build and estimate a spatial general equilibrium model that endogenizes regional linkages through multi-region firms' economies of scale. The model allows to quantify the role of preferences and productivity shocks in shaping the evolution of employment across locations. Using theory-consistent measures of linkages, we show that the urban-rural divide does not explain the diverging employment trends across French locations.
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)
Lobbying Against Free Markets: the Political Economy of Rising Concentration in U.S. Markets (joint with E. Navarra and L. Trimarchi)
Credit Supply and Market Power (joint with M. Pelosi, E. Sette and L. Trimarchi)
Lobbying Against Free Markets: the Political Economy of Rising Concentration in U.S. Markets (joint with E. Navarra and L. Trimarchi)