Is there a paradox of pledgeability?

We show that in the limited-commitment framework of Donaldson, Gromb, and Piacentino (2019), firm value always increases in the fraction of cash flows that can be pledged as collateral. That is, pledgeability increases investment efficiency and relaxes a firm's financing constraint. We derive this conclusion using the same contracts considered by the authors and generalize the result to an arbitrary number of states. We also show that the first best can always be implemented by a nonstate-contingent secured debt contract, which differs from the ones they consider

Estrategias de flexibilidad: empresarios, sindicatos y gobierno local. El caso de Prato

Sin resume

Optimal leverage and strategic disclosure

Firms seeking external financing jointly choose what securities to issue, and the extent of their disclosure commitments. The literature shows that enhanced disclosure reduces the cost of financing. This paper analyses how disclosure affects the optimal composition of financing means. It considers a market where firms compete for external financing under costly-state-verification, but, in contrast to the standard model: (i) the degree of asymmetric information between firms and outside investors is variable, and (ii) firms can affect it through a disclosure policy, modeled as a verifiable signal with a cost decreasing in its noise component. Two central predictions emerge. On the positive side, optimal disclosure and leverage are negatively correlated. Efficient equity financing requires that firms are sufficiently transparent, whereas debt does not; it solely relies on the threat of bankruptcy and liquidation. Therefore, more transparent firms issue cheaper equity and face a higher opportunity cost of leveraged external financing. The prediction is shown to be consistent with the behavior of US corporations since the 1980s. On the normative side, disclosure externalities and time inconsistencies lead to under-disclosure and excessive leverage relative to the constrained best. If mandatory disclosures are feasible – that is, they cannot be easily dodged – they increase welfare. Otherwise, endogenously higher transparency can be triggered if regulators set capital requirements. Capital regulation proves especially useful when (i) firm performances are highly correlated, and (ii) disclosure requirements can be easily dodged – conditions that seem to apply to large financial firms. The view of capital standards as a means to improve the information environment is novel in the literature; its policy implications and challenges are discussed

Exchange Rates and Political Uncertainty: The Brexit Case

This paper studies the impact of political risk on exchange rates. We focus on the Brexit Referendum as it provides a natural experiment where both exchange rate expectations and a time-varying political risk factor can be measured directly. We build a simple portfolio model which predicts that an increase in the Leave probability triggers a depreciation of the British Pound, both on account of exchange rate expectations and of political risk. We estimate the model for multilateral and bilateral British Pound exchange rates. The results confirm the model\u2019s main implications. When we extend the analysis to a portfolio model of multiple currencies, we find that the cross-currencies restrictions implied by the theory are not rejected by our system estimation. Moreover, the joint estimates of the multi-currency model in the presence of time-varying political risk premium are in many cases consistent with the Uncovered Interest Parit

Exchange Rates and Political Uncertainty: The Brexit Case

This paper studies the impact of political risk on exchange rates. We focus on the Brexit Referendum as it provides a natural experiment where both exchange rate expectations and a time-varying political risk factor can be measured directly. We build a simple portfolio model which predicts that an increase in the Leave probability triggers a depreciation of the British Pound, both on account of exchange rate expectations and of political risk. We estimate the model for multilateral and bilateral British Pound exchange rates. The results confirm the model’s main implications. When we extend the analysis to a portfolio model of multiple currencies, we find that the cross-currencies restrictions implied by the theory are not rejected by our system estimation. Moreover, the joint estimates of the multi-currency model in the presence of time-varying political risk premium are in many cases consistent with the Uncovered Interest Parity

La costruzione sociale dell'innovazione

In contemporary economics the social and relational dimension of innovation comes to predominate over the corporate aspect. Innovative processes mature not only within the confines of the enterprise, but increasingly through the formal and informal relations that the companies develop between them, and with the suppliers, the customers and the structures for education and research. This connotation of interaction and dialogue is accompanied by a new local embedding of the innovative activities: it is within the territory, through direct interaction often of an informal nature, that tacit knowledge is developed as a crucial resource for innovation. It is on this process of innovation that the essays in this volume focus, bringing to light the consequences that derive for the mapping of policies aimed at sustaining innovative initiatives

Why the Italian Mezzogiorno did not Achieve a Sustainable Growth: Social Capital and Political Constraints

This article analyses the reasons for the persisting economic and social backwardness of the Italian Mezzogiorno. The South of Italy, a large and densely populated region, has lagged behind the rest of the country over the last 60 years, despite considerable investments in development aid. Understanding the reasons for this failure is particularly important not only for the future of Italy citizens but also for regional development policies in Europe. Current explanations focused on either an insufficiency of economic aid from the central government or a lack of social capital in the Southern regions. Both of them are weak in a number of respects. The insufficient aid thesis overlooks the large absolute scale of net transfers form the state to the South (especially in terms of spending on public services). The social capital thesis points out the weaker endowment of civicness in the Mezzogiorno, but overlooks the role of political institutions that hinder economic development and the growth of civic culture. The major argument of this article is that the problem of the South should be explained primarily through reference to the dynamics of the political system (both local and national). The prevalence of clientelism in the politics of the South helps explain the inefficiency of aid policy, and also provides a more convincing explanation for the lack of social capital. Clientelism in local politics is supported and even encouraged at the national level because of the importance of the Mezzogiorno in national electoral politics

Crescita economica e coesione sociale nelle democrazie avanzate

After the Second World War, the economies of advanced Countries have long been characterized by inclusive economic growth. In recent decades, on the other hand, there has been a steady increase in inequalities and a worsening for low-income social groups. What is the possibility of rebuilding a more inclusive development like that of the post-war three decades? Is it a viable road? And under what conditions? Or should we instead speculate that divorce is inevitable between economic growth and social cohesion in advanced democracies? There is no sure answer to this question, but it can be a good exercise, especially for those who believe that inclusive development is an essential component of the quality and stability of democracies, asking themselves under what conditions we can try to pursue this goal. The path proposed in this text focuses, in a comparative key, on the significant differences in the forms of economic and social regulation between the various advanced democracies that are reflected in more or less inclusive development paths and models of capitalism. Why have some countries managed to better defend the conditions for inclusive development over the past three decades? Through which economic and social regulatory choices? Moreover, another overlooked question is worth asking. How has politics created consensus around these choices and made them possible, while in other contexts it has supported growth accompanied by greater inequalities? What is certain is that giving up the goal of finding a more satisfactory balance between economic growth and social cohesion not only jeopardizes economic development, but also weakens and impoverishes democratic institutions

Siracusa in età catalana. La città nuova nell'età delle regine (1420-1536).

URL del artículo en la web de la Revista: https://www.upo.es/revistas/index.php/atrio/article/view/3069Nella Siracusa tardo-medievale si rispecchiano gli usi, le tradizioni e lo stile architettonico dell'antica corona d'Aragona, cui appartenne il regno di Sicilia. Il governo delle regine si impone in particolare negli anni tra il 1420 e il 1530 in cui Siracusa diviene capitale della Camera Reginale e tra le più importanti città di Sicilia. In quest'epoca i porti di Siracusa, Catania e Agrigento, come già quelli di Palermo, Trapani e Messina, diventano meta privilegiata e approdo dei ricchi mercanti che dalla penisola iberica commerciano con i siciliani, a loro volta in contatto con Barcellona e altre città della Spagna. Sono gli stessi ufficiali al servizio delle regine a importare gli usi architettonici che riproducono a Siracusa la chiarezza palaziale delle dimore spagnole di Barcellona, Lleida, Girona, Valencia o Centelles. In tutta quest'area fiorisce il "gotico mediterraneo", con i suoi chiaroscuri, i ricami di pietra, le bifore e trifore che ingentiliscono le facciate dei palazzi. Questo articolo delinea i caratteri della città aragonese-catalana, rimasta in ombra e quasi del tutto da scoprire. Addentrarsi nei patii con scale a cielo aperto e loggiato di chiaro influsso catalano è un'esperienza unica che fa comprendere la ricchezza della storia urbana, intreccio di culture diverse ed espressione di una civiltà edilizia che è un unicum.En la Edad Media de Siracusa se reflejan las costumbres, tradiciones y el estilo arquitectónico de la antigua corona de Aragón, que pertenecía al reino de Sicilia. El gobierno de las reinas se impone en particular en los años entre 1420 y 1530 en que Syracuse se convierte en la capital de la Camera Reginale y una de las ciuda- des más importantes de Sicilia. En este momento los puertos de Siracusa, Catania y Agrigento, como ya los de Palermo, Trapani y Messina, se convierten en un destino privilegiado y puerto de ricos mercaderes que desde la Península Ibérica comercian con los sicilianos, a su vez en contacto con Barcelona y otras ciudades de España. Los mismos funcionarios sirven a las reinas para importar los usos arquitectónicos que reproducen en Siracusa la claridad palaciega de las residencias españolas de Barcelona, Lleida, Girona, Valencia o Centelles. En toda esta zona florece el "gótico mediterráneo", con su claroscuro, los bordados de piedra, las ventanas geminada y las ventanas de tres luces que refinano las fachadas de los edificios. Este artículo describe los personajes de la ciudad aragonesa-catalana, quedada en la oscuridad y casi completamente por descubrir. Entrar en los patios escaleras descubierta y una galería de arcos de clara influencia catalana es una experiencia única que nos hace comprender la riqueza de la historia urbana, el mezcla de diferentes culturas y la expresión de una civilización constructora que es única.In the late-medieval Syracuse customs, traditions and architectural style of the ancient Crown of Aragon, which belonged to the kingdom of Sicily, are reflected. The Government of the Queens is imposed, in particular in the years between 1420 and 1530, when Syracuse becomes the Capital of the Camera Reginale and one of the most important cities of Sicily. At that time, the ports of Syracuse, Catania and Agrigento, as already were those of Palermo, Trapani and Messina, became a privileged destination and port for rich merchants, who were trading from the Iberian Peninsula with the Sicilians, that in turn were in contact with Barcelona and other cities in Spain. The same officials who served the Queens imported the architectural uses that reproduce in Syracuse the palatial clarity of the Spanish residences of Barcelona, Lleida, Girona, Valencia or Centelles. In all this area the "Mediterranean Gothic" flourishes, with its chiaroscuro, the stone embroideries, and the two- or three-light windows that decorate the buildings' facades. This article outlines the characters of the Aragonese- Catalan city, so far left in the somewhat shade and almost entirely to be discovered. Entering the patios with their open-air stairs and loggias of clear Catalan influence is an extraordinary experience that makes us understand the richness of urban history, interweaving of different cultures and expression of a unique building civilization.Universidad Pablo de Olavid