Results

CEP discussion paper

Trade and intergenerational income mobility: Theory and evidence from the US

This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we find that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of ...Read more...

CEP discussion paper

Regional and aggregate economic consequences of environmental policy

This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. ...Read more...

CEP discussion paper

It takes (more than) a moment: Estimating trade flows with superstar exporters

Understanding producers' selection into exporting and its consequences for micro-founded gravity estimation calls for an in-depth analysis of the interplay between aggregate exports and the distribution of producers' pro...Read more...

CEP discussion paper

Leaving the global playing field through optimal non-discriminatory corporate taxes and subsidies

Due to markup distortions, in international trade models with monopolistic competition and heterogeneous firms the market equilibrium is inefficient unless demand exhibits constant elasticity of substitution. When it doe...Read more...

CEP discussion paper

Fantastic beasts and where to find them

Fantastic beasts are magical creatures that cannot be seen unless one looks for them with the eye of the wizard, but that still play a significant role in the world. The fantastic beasts we hunt and find in the present p...Read more...

CEP discussion paper

The social footprint of globalization: Towards the introduction of strategic industries in quantitative trade models

We argue that our understanding of industrial policy in the presence of 'strategic' industries that exert positive externalities on the national economy may benefit from an extension of quantitative general equilibrium t...Read more...

CEP discussion paper

Rethinking revealed comparative advantage with micro and macro data

The Balassa's index of revealed comparative advantage does not necessarily reveal Ricardian comparative advantage. We propose an alternative sufficient statistics approach based on a quantitative standard trade model inc...Read more...

CEP discussion paper

Has financial fair play changed European football?

In 2011 UEFA, the governing body of European football, introduced the Financial Fair Play Regulation (FFPR), consisting of a set of financial restraints to be met by clubs as a prerequisite for participation to its compe...Read more...

Journal article

Journal of the European Economic Association:

City of dreams

Bigger cities offer more valuable experiences and opportunities in exchange for higher housing costs. While higher-ability workers benefit more from bigger cities, they are not more likely to move to one. Our model of ur...Read more...

CEP discussion paper

Robot adoption, worker-firm sorting and wage inequality: evidence from administrative panel data

Leveraging the geographic dimension of a large administrative panel on employer-employee contracts, we study the impact of robot adoption on wage inequality through changes in worker-firm assortativity. Using recently de...Read more...

Blog

Vox EU:

Robot adoption, worker-firm sorting, and wage inequality: Evidence from administrative panel data

Technological progress has contributed to rising wage inequality in recent decades. Automation and digitalisation increasingly require workers with specialised knowledge for specific tasks, say Ester Faia, Gianmarco Otta...Read more...

CEP discussion paper

Cultural homophily and collaboration in superstar teams

One may reasonably think that cultural preferences affect collaboration in multinational teams in general, but not in superstar teams of professionals at the top of their industry. We reject this hypothesis by creating a...Read more...

Journal article

Journal of the European Economic Association :

Talents and cultures: immigrant inventors and ethnic diversity in the age of mass migration

We investigate the importance of co-ethnic networks and diversity in determining immigrant inventors' settlements in the United States by following the location choices of thousands of them across counties during the Age...Read more...

Chapter

On the employment consequences of automation and offshoring

in Robots and AI - a new economic era

We argue that automation may make workers and firms more selective in matching their specialized skills and tasks. We call this phenomenon "core-biased technological change", and wonder whether something similar could be...Read more...

Chapter

The backlash of globalization

in Handbook of International Economics

We review the literature on the globalization backlash, seen as the political shift of voters and parties in a protectionist and isolationist direction, with substantive implications on governments' leaning and enacted p...Read more...

Blog

VoxEU:

The globalisation backlash

As populist parties have surged across advanced democracies so, it seems, has a 'globalisation backlash'. This column provides descriptive evidence on the backlash, discusses its theoretical underpinnings within standard...Read more...

CEP discussion paper

Business groups as knowledge-based hierarchies of firms

Hierarchical differentiation is a cornerstone of the organizing process. In this paper, we do three things. First, exploiting a newly assembled dataset, we provide the first worldwide overview of the patterns of hierarch...Read more...

CEP discussion paper

The backlash of globalization

We review the literature on the globalization backlash, seen as the political shift of voters and parties in a protectionist and isolationist direction, with substantive implications on governments' leaning and enacted p...Read more...

CEP Insights

Brexit

The UK's vote to leave the European Union in 2016 triggered economic reactions that will define the country's future for years to come. Why does leaving the EU have such a profound impact - and how do economists estimate...Read more...

Journal article

Fiscal Studies:

Global banking: Endogenous competition and risk taking

When banks expand abroad, their riskiness decreases if foreign expansion happens in destination countries that are more competitive than their origin countries. We reach this conclusion in three steps. First, we develop ...Read more...

Journal article

The Review of Economics and Statistics:

Product mix and firm productivity responses to trade competition

We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, French firms skew their export sal...Read more...

CEP discussion paper

Dream jobs

Understanding why certain jobs are ‘better’ than others and what implications they have for a worker’s career is clearly an important but still relatively unexplored question. We provide both a theoretical framework and ...Read more...

Blog

LSE Business Review:

Dream jobs: managers in internationally active firms have higher lifetime wages

People at managerial level in international companies accumulate strong experience that is useful also in other firms, write Giordano Mion, Luca David Opromolla, and Gianmarco Ottaviano....Read more...

CEP discussion paper

Immigrant inventors and diversity in the age of mass migration

A possible unintended but damaging consequence of anti-immigrant rhetoric, and the policies it inspires, is that they may put high-skilled immigrants off more than low-skilled ones at times when countries and businesses ...Read more...

CEP discussion paper

Automation, globalization and vanishing jobs: a labor market sorting view

We show, theoretically and empirically, that the effects of technological change associated with automation and offshoring on the labor market can substantially deviate from standard neoclassical conclusions when search ...Read more...

CEP discussion paper

Rising protectionism and global value chains: quantifying the general equilibrium effects

Quantifying the effects of trade policy in the age of ’global value chains’ (GVCs) requires an enhanced analytical framework that takes the observed international input-output relations in due account. However, existing ...Read more...

CEP discussion paper

Intellectual property and the organization of the global value chain

This paper introduces the concept of intangible assets in a property rights model of sequential supply chains. Firms transmit knowledge to their suppliers to facilitate input customization. Yet, to avoid knowledge dissip...Read more...

Journal article

European Economic Review:

Strategic inattention, delegation and endogenous market structure

We model an industry in which a discrete number of firms choose the output of their differentiated products, deciding whether or not to consider the impact of their decisions on aggregate output. The firm's choice of ign...Read more...

Journal article

Journal of International Economics:

Geography, competition, and optimal multilateral trade policy

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a mo...Read more...

Journal article

Journal of International Economics:

Foreign expansion, competition and bank risk

Using a novel dataset on the 15 European banks classified as G-SIBs from 2005 to 2014, we find that the impact of foreign expansion on risk is always negative and significant for most individual and systemic risk metrics...Read more...

CEP discussion paper

Geography, competition and optimal multilateral trade policy

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a mo...Read more...

Journal article

Economic Policy:

The productivity puzzle and misallocation: an Italian perspective

Productivity has recently slowed down in many economies around the world. A crucial challenge in understanding what lies behind this 'productivity puzzle' is the still short time span for which data can be analysed. An e...Read more...

CEP discussion paper

Foreign expansion, competition and bank risk

Using a novel dataset on the 15 European banks classified as G-SIBs from 2005 to 2014, we find that the impact of foreign expansion on risk is always negative and significant for most individual and systemic risk metrics...Read more...

Journal article

International Economics:

Relaxing credit constraints in emerging economies: The impact of public loans on the productivity of Brazilian manufacturers

In emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm productivity growth in manufacturing. Huge amount of public money is devoted to the removal of suc...Read more...

CEP discussion paper

Financial markets and the allocation of capital: the role of productivity

The efficient allocation of credit is a key element for the success of an economy. Traditional measures of allocative efficiency focus on the Q-theory of investment and, in particular, on the elasticity of finance to inv...Read more...

Journal article

Journal of International Economics:

The buyer margins of firms’ exports

We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter'...Read more...

Journal article

Journal of International Economics:

Immigration, trade and productivity in services: Evidence from U.K. firms

This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may i...Read more...

Journal article

Papers in Regional Science:

UK trade and FDI: A post-Brexit perspective

Leaving the EU will reshape the UK's economic relations with the rest of the world. This paper summarizes the findings of recent research studying the UK's role in the global economy, and the consequences of Brexit for U...Read more...

CentrePiece article

Poor productivity: an Italian perspective

Productivity growth has been slow in Western countries since the global financial crisis, but in Italy it has been stagnating for 25 years. Fadi Hassan and Gianmarco Ottaviano investigate inefficiency and misallocation i...Read more...

CEP discussion paper

The productivity puzzle and misallocation: an Italian perspective

Productivity has recently slowed down in many economies around the world. A crucial challenge in understanding what lies behind this \productivity puzzle" is the still short time span for which data can be analysed. An e...Read more...

Journal article

Research in Economics:

Monopolistic competition and optimum product selection: Why and how heterogeneity matters

After some decades of relative oblivion, the interest in the optimality properties of monopolistic competition has recently re-emerged due to the availability of an appropriate and parsimonious framework to deal with fir...Read more...

Journal article

Journal of Regional Science:

A review of volume 5 of the Handbook of Regional and Urban Economics

[No abstract available]...Read more...

Journal article

Economic Policy:

The costs and benefits of leaving the EU: trade effects

This paper estimates the welfare effects of Brexit in the medium to long run, focusing on trade and fiscal transfers.We use a standard quantitative general equilibrium trade model with many countries and sectors and trad...Read more...

CEP discussion paper

UK trade and FDI: a post-Brexit perspective

Leaving the EU will change the UK’s economic relations with the rest of the world. This paper discusses the UK’s role in the global economy and the consequences of Brexit for the UK’s trade, investment and living standar...Read more...

CEP discussion paper

International expansion and riskiness of banks

We exploit an original dataset on European G-SIBs to assess how banks’ internationalization affects risk in the banking sector. We find a robust negative correlation between foreign expansion and banking risk as captured...Read more...

CEP discussion paper

The costs and benefits of leaving the EU: trade effects

This paper estimates the welfare effects of Brexit, focusing on trade and fiscal transfers. We use a standard quantitative general equilibrium trade model with many countries and sectors and trade in intermediates, as in...Read more...

CEP discussion paper

Global banking: risk taking and competition

Direct involvement of global banks in local retail activities can reduce risk-taking by promoting local competition. We develop this argument through a model in which multinational banks operate simultaneously in differe...Read more...

Journal article

Oxford Review of Economic Policy:

A hitch-hiker's guide to post-Brexit trade negotiations: Options and principles

Brexit will require the UK to negotiate new trade arrangements with the EU. After summarizing the main options for future UK-EU trade relations, this article reviews the purpose of trade agreements. We highlight that tra...Read more...

CEP report

UK growth: a new chapter

The UK Economy is at a critical juncture. Leaving the EU creates economic challenges that necessitate widespread policy change. But this also generates an opportunity to tackle some of the long-standing challenges which ...Read more...

CEP discussion paper

Product mix and firm productivity responses to trade competition

We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their expo...Read more...

Blog

LSE British Politics and Policy:

Foreign investors love Britain – but Brexit would end the affair

Foreign investment brings many benefits to the UK, including higher pay and productivity. But a Brexit vote could end it all, write Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen. First, not being...Read more...

CEP Brexit analysis

BREXIT 2016: policy analysis from the Centre for Economic Performance

On June 23rd, the British people will vote in a referendum over whether or not to remain in the European Union. It is the most important vote that most of us will have in our lifetimes. And one that will have major reper...Read more...

CentrePiece article

Why immigration is no reason to leave the EU

A major argument of Brexit campaigners is that leaving the European Union would give the UK more control over the flow of immigrants, who they claim hurt the jobs and pay of native-born workers. CEP research shows that E...Read more...

CentrePiece article

Foreign investors love Britain - but Brexit would end the affair

Investment from overseas brings many benefits to the UK economy, including higher pay and productivity. According to CEP research, leaving the European Union could lead to a fall in inward foreign direct investment in th...Read more...

CentrePiece article

Brexit: the impact on UK trade and living standards

For over two years, a CEP research team has been studying the likely impact on the living standards of UK households of a referendum vote to leave the European Union. The first of three reports summarised here focuses on...Read more...

Blog

LSE European Politics and Policy Blog:

The ‘Britain Alone’ scenario: how Economists for Brexit defy the laws of gravity

There is a degree of consensus among economists that a Brexit will make us worse off. The exception is recent work by Economists for Brexit. Their forecast of income gains from Brexit contrasts with all other economic an...Read more...

Blog

LSE British Politics and Policy:

The ‘Britain Alone’ scenario: how Economists for Brexit defy the laws of gravity

There is a degree of consensus among economists that a Brexit will make us worse off. The exception is recent work by Economists for Brexit. Their forecast of income gains from Brexit contrasts with all other economic an...Read more...

CEP Brexit analysis

‘ECONOMISTS FOR BREXIT’: A critique

Read more...

CEP Brexit analysis

Brexit and the impact of immigration on the UK

A reduction in immigration from the European Union (EU) following a vote for Brexit would not lead to any improvement in living standards for those born in the UK. Cuts in EU immigration would not offset the big fall in ...Read more...

CEP Brexit analysis

The UK Treasury analysis of 'The long-term economic impact of EU membership and the alternatives': CEP Commentary

Overly cautious assumptions in the Treasury’s recent report on the long-run consequences for the UK economy of leaving the European Union (EU) mean that it has probably underestimated the economic costs. That is one of t...Read more...

CEP Brexit analysis

The impact of Brexit on foreign investment in the UK

The third in a series of Brexit reports from the Centre for Economic Performance (CEP), examines how leaving the EU would affect UK incomes through changes in foreign investment in the UK. Leaving the European Union (EU)...Read more...

Blog

LSE British Politics and Policy:

The question is not whether Brexit will cost the UK in economic terms but how much

For over two years, a research team at the Centre for Economic Performance (CEP) has been studying the likely impact of the UK leaving the European Union. Their latest report focuses on the impact of ‘Brexit’ through cha...Read more...

CEP Brexit analysis

The consequences of Brexit for UK trade and living standards

The economic consequences of leaving the EU will depend on what policies the UK adopts following Brexit. But lower trade due to reduced integration with EU countries is likely to cost the UK economy far more than is gain...Read more...

CEP discussion paper

How have EU's trade agreements impacted consumers?

Over the past two decades, the European Commission has negotiated a number of Free Trade Agreements (FTAs) which contain both traditional elements of bilateral tariff reductions, as well as additional liberalisation meas...Read more...

External publication

Measuring competitiveness in Europe: resource allocation, granularity and trade:

The importance of micro data in assessing aggregate outcomes

In recent years, researchers and policymakers have been able to use sophisticated databases to provide insightful economic analysis. The increasing variety of available microeconomic databases and the improvement in the ...Read more...

CentrePiece article

Immigration: the link to international trade in services

Two notable features of globalisation are the growth of immigration and the growth of international trade in services. Exploring links between these phenomena, Gianmarco Ottaviano, Giovanni Peri and Greg Wright find that...Read more...

CEP discussion paper

Immigration, trade and productivity in services: evidence from UK firms

This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may i...Read more...

CEP election analysis

#ElectionEconomics: The Research Evidence on Key Issues for Voters in the 2015 UK General Election

Please see the CEP #ElectionEconomics report(Paper 1)and the Executive Summary (Paper 2) that cover all the election 2015 briefings, discussing the research evidence on 15 of the UK's key policy battlegrounds: immigratio...Read more...

CEP election analysis

Should We Stay or Should We Go? The economic consequences of leaving the EU

We analyze the effects of Brexit on the UK economy. The most important economic consequence of Brexit would likely be reduced trade with EU countries. We consider an optimistic scenario with relatively small increases in...Read more...

CEP discussion paper

Relaxing credit constraints in emerging economies: the impact of public loans on the performance of Brazilian manufacturers

n emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm innovation and productivity growth in manufacturing. Huge amounts of public money are devoted to th...Read more...

CEP discussion paper

City of dreams

Higher ability workers benefit more from bigger cities while housing costs there are higher for everyone, and yet there is little sorting on ability. A possible explanation is that young individuals have an imperfect ass...Read more...

CentrePiece article

Fiat Chrysler and the future of industry

Machines cannot fully replace people even in a high-tech industry like car-making. That is one of the conclusions of research which uses the example of the newly merged transatlantic car-maker Fiat Chrysler to debunk a n...Read more...

CEP discussion paper

European integration and the gains from trade

This chapter discusses whether and how .new quantitative trade models.(NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further...Read more...

CEP discussion paper

Immigration, diversity and the labour market outcomes of native workers: some recent developments

This brief essay provides a selective discussion of how in recent years economists in the neoclassical tradition have addressed the questions whether and how immigration affects native workers’ labour market outcomes. In...Read more...

Blog

LSE European Politics and Policy Blog:

Leaving the European Union would likely have a significant negative impact on the UK’s economy

How would leaving the EU affect the UK’s economy? Gianmarco Ottaviano, João Paulo Pessoa, Thomas Sampson and John Van Reenen outline findings from a new report on the economic consequences of a ‘Brexit’. They indicate th...Read more...

CEP policy analysis

Brexit or Fixit? The Trade and Welfare Effects of Leaving the European Union

Since a speech by the Prime Minister in January 2013 , the Conservative party has been committed to holding a referendum on the UK’s membership of the European Union (EU) in 2017. So this is a good moment to consider wha...Read more...

CEP report

Internationalization and Innovation of Firms: Evidence and Policy

We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European coun...Read more...

Journal article

American Economic Review:

Immigration, offshoring, and American jobs

Following Grossman and Rossi-Hansberg (2008) we present a model in which tasks of varying complexity are matched to workers of varying skill in order to develop and test predictions regarding the effects of immigration a...Read more...

CEP discussion paper

The buyer margins of firms' exports

We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that aggregate exports are disproportionally driven by few multi-buyers exporters whose foreign sales of any produ...Read more...

CEP discussion paper

Regional growth and regional decline

Since the early 1990s, there has been a renaissance in the study of regional growth, spurred by new models, methods and data. We survey a range of modelling traditions, and some formal approaches to the ’hard problem’ of...Read more...

CEP discussion paper

Monopolistic Competition and Optimum Product Selection: Why and How Heterogeneity Matters

After some decades of relative oblivion, the interest in the optimality properties of monopolistic competition has recently re-emerged due to the availability of an appropriate and parsimonious framework to deal with fir...Read more...

CEP discussion paper

Immigration, Offshoring and American Jobs

How do offshoring and immigration affect the employment of native workers? What kinds of jobs suffer, or benefit, most from the competition created by offshore and immigrant workers? In contrast to the existing literatur...Read more...

CEP discussion paper

Market Size, Competition, and the Product Mix of Exporters

We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export ma...Read more...

CEP discussion paper

Global Value Chains During the Great Trade Collapse: A Bullwhip Effect?

This paper analyzes the performance of global value chains during the trade collapse. To do so, it exploits a unique transaction-level dataset on French firms containing information on cross-border monthly transactions m...Read more...

CEP discussion paper

Agglomeration, Trade and Selection

This paper studies how firm heterogeneity in terms of productivity affects the balance between agglomeration and dispersion forces in the presence of pecuniary externalities through a selection model of monopolistic comp...Read more...

Journal article

Journal of the European Economic Association:

Rethinking the effect of immigration on wages

This paper calculates the effects of immigration on the wages of native US workers of various skill levels in two steps. In the first step we use labor demand functions to estimate the elasticity of substitution across d...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Productivity and Firm Selection: Quantifying the 'New' Gains from Trade

We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial...Read more...

CEP discussion paper

Agglomeration in a global Economy: A Survey

This review of recent contributions reveals common conclusions about the effects of integration on location. For high trade costs, the need to supply markets locally encourages firms to spread across different regions. I...Read more...