We build a matched firm-director panel dataset for the universe of limited liability companies in... more We build a matched firm-director panel dataset for the universe of limited liability companies in Italy, tracking directors across different firms over time. Exploiting cross-sectional variation due to board interlocking and longitudinal variation due to director moves between firms over time, we estimate how much of the variation in firms’ productivity can be attributed to director fixed effects (which we name talent). We find that, after controlling for firm fixed effects and time-varying characteristics, the board talent explains a significant portion of variation in firm productivity. The impact is higher for firms more exposed to competition, grows with firm size and age, and is lower for family-owned firms. To shed light on what managers do to boost firm productivity, we exploit survey data on a wide set of firm strategies. We find that the increase in TFP is driven by an increase in firm output and by a reduction in the number of low-pay employees. We also show that board tal...
To address gender gaps in politics, a new policy introduces double preference voting conditioned ... more To address gender gaps in politics, a new policy introduces double preference voting conditioned on gender and guarantees a minimum presence of both genders on candidate lists. We focus on Italian local elections, which were subject to this policy for the first time in 2013, and we study its impact on the share of female councilors and on the composition of municipal spending. Using a regression discontinuity design, we estimate that the reform raises the share of elected female politicians by 19 percentage points. The result is mainly driven by the increase in preference votes cast for female candidates, suggesting a salient role of double preference voting in promoting female empowerment in politics. We also find that municipalities with a larger share of female councilors caused by the policy spend more on education and environment.
We analyze the effect of the introduction of gender quotas in candidate lists on the quality of e... more We analyze the effect of the introduction of gender quotas in candidate lists on the quality of elected politicians. We consider an Italian law which introduced gender quotas in local elections in 1993, and was abolished in 1995. As not all municipalities went through elections during the period the reform was in force, we can identify two groups of municipalities and use a Difference in Differences estimation to analyze the effect of gender quotas on the quality of elected politicians. We find that gender quotas are associated with a higher average number of years of schooling of elected politicians, with the effect ranging from 0.12 to 0.18 years of education. This effect is due not only to the higher number of elected women, who are on average more educated than their male colleagues, but also to the lower number of loweducated elected men. The positive effect on quality is confirmed also when we measure the latter with alternative indicators of the quality of politicians, it per...
Journal of the European Economic Association, 2019
This paper studies whether firms trade political contributions for public procurement contracts. ... more This paper studies whether firms trade political contributions for public procurement contracts. Combining data on Lithuanian government tenders, corporate donors, and firm characteristics, I examine how a ban on corporate contributions affects the awarding of procurement contracts to companies that donated in the past. Consistent with political favoritism, donors’ probability of winning falls by five percentage points as compared to that of nondonor firms after the ban. Evidence on bidding and victory margins suggests that corporate donors may receive auction-relevant information affecting procurement outcomes in their favor.
Using Italian data on municipal public works tendered in the period 2009-2013, we study how a ref... more Using Italian data on municipal public works tendered in the period 2009-2013, we study how a reform extending the scope of bureaucrat discretion affects supplier selection. We find that the share of contracts awarded to politically connected firms increases while the (ex-ante) labor productivity of the winning firm decreases, thus suggesting a potential misallocation of the public funds. These effects are concentrated among municipalities characterized by less competent politicians and bureaucrats and by higher levels of corruption. We also show that under broader discretion public agencies comply less frequently with transparency requirements. JEL codes: D72, D73, H57, P16. * We thank Giuliana Palumbo, Paolo Sestito and participants at the Bank of Italy internal seminars, the Petralia workshop, the Political Economy Workshop of Galatina Summer Meetings, the SIEP Annual Conference in Catania and the ISLE Annual Conference in Rome for their helpful comments, and Ivan Triglia for exc...
This paper studies the role of managerial talent in determining corporate performance. For this p... more This paper studies the role of managerial talent in determining corporate performance. For this purpose, we build a matched firm-director panel dataset for the universe of limited liability companies in Italy, tracking directors across different firms over time. We measure managerial talent by their ability to boost firms’ total factor productivity, estimated with a two-way fixed effects model. First, we find that managerial talent influences a number of corporate features conducive to positive firm performance. Namely, we show that talented managers are better able to forecast the firm performance; they diminish their middle-management layers and move towards highly-skilled workers at all organization levels; they are also associated with the adoption of good managerial practices and advanced technology. Second, and more importantly, we find complementarities between managerial ability and the other key internal drivers of productivity. While the workforce human capital, the use of...
Political Finance Reform and Public Procurement: Evidence from Lithuania. Can political donation... more Political Finance Reform and Public Procurement: Evidence from Lithuania. Can political donations buy influence? This paper studies whether firms trade political contributions for public procureme ...
Can political donations buy influence? This paper studies whether firms trade political contribut... more Can political donations buy influence? This paper studies whether firms trade political contributions for public procurement contracts. To answer this question, I focus on the Lithuanian political economy. Combining data on a large number of government tenders, the universe of corporate donors and firm characteristics, I examine how a ban on corporate donations affects the awarding of procurement contracts to companies that donated in the past. Consistent with political favoritism, contributing firms’ probability of winning goes down by five percentage points as compared to that of non-donor firms after the ban. Among different mechanisms, the hypothesis that corporate donors get confidential information on competing bids prevails. The empirical results are in line with predictions from a first-price sealed-bid auction model with one informed bidder. Evidence on firm bidding and victory margins suggests that contributing firms adjust their bids in order to secure contracts at a maxi...
There is evidence that age matters in politics. In this paper we study whether implementation of ... more There is evidence that age matters in politics. In this paper we study whether implementation of affirmative action policies on gender can generate additional effects on an alternative dimension of representation, namely, the age of politicians. We consider an Italian law which introduced gender quotas in candidate lists for local elections in 1993, and was abolished in 1995. As not all municipalities went through elections during this period, we can identify two groups of municipalities and use a Difference in differences estimation to analyze the effect of gender quotas on the age of elected politicians. We find that gender quotas are associated with election of politicians that are younger by more than one year. The effect occurs mainly due to the reduction in age of elected male politicians and is consistent with the optimizing behavior of parties or of voters. JEL-Code: D720, J450.
We build a matched firm-director panel dataset for the universe of limited liability companies in... more We build a matched firm-director panel dataset for the universe of limited liability companies in Italy, tracking directors across different firms over time. Exploiting cross-sectional variation due to board interlocking and longitudinal variation due to director moves between firms over time, we estimate how much of the variation in firms’ productivity can be attributed to director fixed effects (which we name talent). We find that, after controlling for firm fixed effects and time-varying characteristics, the board talent explains a significant portion of variation in firm productivity. The impact is higher for firms more exposed to competition, grows with firm size and age, and is lower for family-owned firms. To shed light on what managers do to boost firm productivity, we exploit survey data on a wide set of firm strategies. We find that the increase in TFP is driven by an increase in firm output and by a reduction in the number of low-pay employees. We also show that board tal...
To address gender gaps in politics, a new policy introduces double preference voting conditioned ... more To address gender gaps in politics, a new policy introduces double preference voting conditioned on gender and guarantees a minimum presence of both genders on candidate lists. We focus on Italian local elections, which were subject to this policy for the first time in 2013, and we study its impact on the share of female councilors and on the composition of municipal spending. Using a regression discontinuity design, we estimate that the reform raises the share of elected female politicians by 19 percentage points. The result is mainly driven by the increase in preference votes cast for female candidates, suggesting a salient role of double preference voting in promoting female empowerment in politics. We also find that municipalities with a larger share of female councilors caused by the policy spend more on education and environment.
We analyze the effect of the introduction of gender quotas in candidate lists on the quality of e... more We analyze the effect of the introduction of gender quotas in candidate lists on the quality of elected politicians. We consider an Italian law which introduced gender quotas in local elections in 1993, and was abolished in 1995. As not all municipalities went through elections during the period the reform was in force, we can identify two groups of municipalities and use a Difference in Differences estimation to analyze the effect of gender quotas on the quality of elected politicians. We find that gender quotas are associated with a higher average number of years of schooling of elected politicians, with the effect ranging from 0.12 to 0.18 years of education. This effect is due not only to the higher number of elected women, who are on average more educated than their male colleagues, but also to the lower number of loweducated elected men. The positive effect on quality is confirmed also when we measure the latter with alternative indicators of the quality of politicians, it per...
Journal of the European Economic Association, 2019
This paper studies whether firms trade political contributions for public procurement contracts. ... more This paper studies whether firms trade political contributions for public procurement contracts. Combining data on Lithuanian government tenders, corporate donors, and firm characteristics, I examine how a ban on corporate contributions affects the awarding of procurement contracts to companies that donated in the past. Consistent with political favoritism, donors’ probability of winning falls by five percentage points as compared to that of nondonor firms after the ban. Evidence on bidding and victory margins suggests that corporate donors may receive auction-relevant information affecting procurement outcomes in their favor.
Using Italian data on municipal public works tendered in the period 2009-2013, we study how a ref... more Using Italian data on municipal public works tendered in the period 2009-2013, we study how a reform extending the scope of bureaucrat discretion affects supplier selection. We find that the share of contracts awarded to politically connected firms increases while the (ex-ante) labor productivity of the winning firm decreases, thus suggesting a potential misallocation of the public funds. These effects are concentrated among municipalities characterized by less competent politicians and bureaucrats and by higher levels of corruption. We also show that under broader discretion public agencies comply less frequently with transparency requirements. JEL codes: D72, D73, H57, P16. * We thank Giuliana Palumbo, Paolo Sestito and participants at the Bank of Italy internal seminars, the Petralia workshop, the Political Economy Workshop of Galatina Summer Meetings, the SIEP Annual Conference in Catania and the ISLE Annual Conference in Rome for their helpful comments, and Ivan Triglia for exc...
This paper studies the role of managerial talent in determining corporate performance. For this p... more This paper studies the role of managerial talent in determining corporate performance. For this purpose, we build a matched firm-director panel dataset for the universe of limited liability companies in Italy, tracking directors across different firms over time. We measure managerial talent by their ability to boost firms’ total factor productivity, estimated with a two-way fixed effects model. First, we find that managerial talent influences a number of corporate features conducive to positive firm performance. Namely, we show that talented managers are better able to forecast the firm performance; they diminish their middle-management layers and move towards highly-skilled workers at all organization levels; they are also associated with the adoption of good managerial practices and advanced technology. Second, and more importantly, we find complementarities between managerial ability and the other key internal drivers of productivity. While the workforce human capital, the use of...
Political Finance Reform and Public Procurement: Evidence from Lithuania. Can political donation... more Political Finance Reform and Public Procurement: Evidence from Lithuania. Can political donations buy influence? This paper studies whether firms trade political contributions for public procureme ...
Can political donations buy influence? This paper studies whether firms trade political contribut... more Can political donations buy influence? This paper studies whether firms trade political contributions for public procurement contracts. To answer this question, I focus on the Lithuanian political economy. Combining data on a large number of government tenders, the universe of corporate donors and firm characteristics, I examine how a ban on corporate donations affects the awarding of procurement contracts to companies that donated in the past. Consistent with political favoritism, contributing firms’ probability of winning goes down by five percentage points as compared to that of non-donor firms after the ban. Among different mechanisms, the hypothesis that corporate donors get confidential information on competing bids prevails. The empirical results are in line with predictions from a first-price sealed-bid auction model with one informed bidder. Evidence on firm bidding and victory margins suggests that contributing firms adjust their bids in order to secure contracts at a maxi...
There is evidence that age matters in politics. In this paper we study whether implementation of ... more There is evidence that age matters in politics. In this paper we study whether implementation of affirmative action policies on gender can generate additional effects on an alternative dimension of representation, namely, the age of politicians. We consider an Italian law which introduced gender quotas in candidate lists for local elections in 1993, and was abolished in 1995. As not all municipalities went through elections during this period, we can identify two groups of municipalities and use a Difference in differences estimation to analyze the effect of gender quotas on the age of elected politicians. We find that gender quotas are associated with election of politicians that are younger by more than one year. The effect occurs mainly due to the reduction in age of elected male politicians and is consistent with the optimizing behavior of parties or of voters. JEL-Code: D720, J450.
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