Persistence of Politicians and Firms'Innovation

We empirically investigate whether the persistence of politicians in political institutions affects the innovation activity of firms. We use 12,000 firm-level observations from three waves of the Italian Observatory over Small and Medium Enterprises, and introduce a measure of political persistence defined as the average length of individual political careers in political institutions of Italian municipalities. Standard OLS shows no raw correlation between political persistence and firms' innovation activity. However, once the causal effect is isolated by means of instrumental variables, using death of politicians as an exogenous source of variation of political persistence, we find a robust negative relation between political persistence and the probability of process innovation. This finding is consistent with the view that political stability may hinder firms' incentive to innovate to maintain their competitiveness, as long as they can extract rents from long-term connections with politicians.

Intellectual Property Rights and South-North Global Innovation Networks

This paper explores the role of IPR protection in the emergence of R&D linkages from newly emerging economies. Using data from a new survey on Chinese and Indian firms in the ICT sector, we find IPR protection to be key in the engagement of Southern firms in global innovation networks. A complementary exercise uses global bilateral patent data to investigate the location-specificity of IPR enforcement for this phenomenon. We find that a stringent IPR regime in the North (South) discourages (encourage) foreign patenting activities of firms in the South, suggesting that a global convergence of IPRs can stimulate Southern innovation.

Trade and Geography in the Economic Origins of Islam: Theory and Evidence

This research examines the economic origins of Islam and uncovers two empirical regularities. First, Muslim countries, virtual countries and ethnic groups, exhibit highly unequal regional agricultural endowments. Second, Muslim adherence is systematically larger along the pre-Islamic trade routes in the Old World. The theory argues that this particular type of geography (i) determined the economic aspects of the religious doctrine upon which Islam was formed, and (ii) shaped its subsequent economic performance. It suggests that the unequal distribution of land endowments conferred differential gains from trade across regions, fostering predatory behavior from the poorly endowed ones. In such an environment it was mutually bene.cial to institute a system of income redistribution. However, a higher propensity to save by the rich would exacerbate wealth inequality rendering redistribution unsustainable, leading to the demise of the Islamic unity. Consequently, income inequality had to remain within limits for Islam to persist. This was instituted via restrictions on physical capital accumulation. Such rules rendered the investments on public goods, through religious endowments, increasingly attractive. As a result, capital accumulation remained low and wealth inequality bounded. Geography and trade shaped the set of economically relevant religious principles of Islam affecting its economic trajectory in the preindustrial world.

Intellectual property rights and south-north formation of global innovation networks

With the rise of the knowledge economy, delivering sound innovation policies requires a thorough understanding of how knowledge is produced and diffused. This paper takes a step to analyze a new form of globalization, the so-called system of Global Innovation Networks (GINs), to shed light on how the protection of intellectual property rights (IPRs) influences their creation and development. We focus on the role of IPR protection in fostering international innovative activities in emerging economies (South), such as China and India, and more generally, how IPRs affect the development of GINs between newly industrialized countries and OECD countries. Using both survey-based firm-level and country-level global data, we find IPRs to be an important determinant of participation in GINS from a Southern perspective. We find IPR protection at home and its harmonization across county pairs foster South-North formation of GINs. We also find that a stringent regime in the destination country discourages foreign international innovative activities that originate in NICs. Both levels of our analysis confirm the ICT industry, particularly the hardware segment, to rely on IPRs when engaging in the international outsourcing and offshoring of innovation or in patenting activities abroad

Historical social contracts and their legacy: a disaggregated analysis of the medieval republics

We study the comparative political economy within the territories ruled by the medieval republics in Northern Italy. Building on the historical evidence, we conceptualize the emergence of more inclusive vs. extractive institutions in these sovereign polities as driven by the interests of local rulers and their need to build state capacity. We provide novel insights on the role of geography and historical contingencies in the development of public governance, individual attitudes, and social-inclusion, which mutually supported each other and persisted over time. We measure the origin, territorial evolution, and disappearance of all the sovereign polities that ruled over the Italian peninsula during the period of 1000-1800 AD. The empirical analysis connects contemporary socio-economic outcomes across spatially disaggregated northern Italian localities, at the municipality level, to local political history. We distinguish between so-called “communal” and “maritime republics” and show that the intensity and stability of exposure to the different types of republican rule in pre-industrial times continues to shape local public good provision and individual fiscal compliance, and has left a tangible imprint on today’s population diversity

Trade and Geographyin the Economic Origins of Islam: Theory and Evidence

This research examines the economic origins of Islam and uncovers two empirical regularities. First, Muslim countries, virtual countries and ethnic groups, exhibit highly unequal regional agricultural endowments. Second, Muslim adherence is systematically larger along the pre-Islamic trade routes in the Old World. The theory argues that this particular type of geography (i) determined the economic aspects of the religious doctrine upon which Islam was formed, and (ii) shaped its subsequent economic performance. It suggests that the unequal distribution of land endowments conferred di§erential gains from trade across regions, fostering predatory behavior from the poorly endowed ones. In such an environment it was mutually beneÖcial to institute a system of income redistribution. However, a higher propensity to save by the rich would exacerbate wealth inequality rendering redistribution unsustainable, leading to the demise of the Islamic unity. Consequently, income inequality had to remain within limits for Islam to persist. This was instituted via restrictions on physical capital accumulation. Such rules rendered the investments on public goods, through religious endowments, increasingly attractive. As a result, capital accumulation remained low and wealth inequality bounded. Geography and trade shaped the set of economically relevant religious principles of Islam a§ecting its economic trajectory in the preindustrial world

Life Expectancy, Human Capital Accumulation, Technological Adoption and the Process of Economic Growth

This chapter provides a positive theory that explains how an economy might evolve when the longevity of its citizens both influences and is influenced by the process of economic development. This analysis is based on recently advanced unified growth theories and captures the intricate evolution of income per-capita, technology, human capital and life expectancy over the course of human history. We base our explanation on the three periods OLG model proposed by Lancia and Prarolo (2007) where agents, during their lifetime, cover different economic roles characterized by different incentive schemes and time horizon. As in the above mentioned work, we assume that agents' decisions embrace two dimensions: the private choice about education and the public one upon innovation policy. The theory focuses on the crucial role played by heterogeneous interests in determining innovation policies, which are one of the keys to the growth process: the economy can be discontinuously innovation-oriented due to the different incentives of individuals and different schemes of political aggregation of preferences

Islam and human capital in historical Spain

We use a unique dataset on Muslim domination between 711-1492 and literacy in 1860 for about 7500 municipalities to study the long-run impact of Islam on human-capital in historical Spain. Reduced-form estimates show a large and robust negative relationship between length of Muslim rule and literacy. We argue that, contrary to local arrangements set up by Christians, Islamic institutions discouraged the rise of the merchant class, blocking local forms of self-government and thereby persistently hindering demand for education. Indeed, results show that a longer Muslim domination in Spain is negatively related to the share of merchants, whereas neither later episodes of trade nor differences in jurisdictions and different stages of the Reconquista affect our main results. Consistent with our interpretation, panel estimates show that cities under Muslim rule missed-out on the critical juncture to establish self-government institutions