Filomena Pietrovito

FDI and Growth: What Cross-Country Industry Data Say

We simulate the macroeconomic and welfare implications of different fiscal consolidation scenarios in Italy using a medium scale two-areas dynamic general equilibrium currency-union model. Differently from similar models, ours is rich in the terms of fiscal features. We assume distortionary taxes (on labor income, capital income and consumption) and welfare-enhancing public expenditure. We distinguish between public spending on final goods and services, public employment and transfers to households. The scenarios that we consider envisage a decreases in the public debt to GDP ratio of 10 percentage points in 5 years. Based on our simulations we find that: first, fiscal distortions are quantitatively significant; second, a consolidation strategy that reduces expenditure and simultaneously lowers tax rates has a positive effect on long-run GDP of 5% to 7% and on welfare of 4% to 7% of the initial levels, depending on the composition of the adjustment; third, consumption and investment are stable or grow on impact and along the path to the new steady state; finally, spillovers to the rest of the euro area are expansionary and sizeable both in the long run and along the transition.

Trade Impact of European Union Preferential Policies: A Meta-Analysis of the Literature

The gravity model is used frequently to estimate the impact of European Union (EU) Preferential Trade Agreements (PTA) on trade flows. Because of differences in the datasets, sample sizes and independent variables employed, existing studies report very different estimates. This chapter reviews and analyses a large number of results using Meta-Analysis (MA) to provide pooled estimates of the effect of PTA on bilateral trade, based on fixed and random effects models. We test the estimation results for sensitivity to alternative specifications and different control variables. After filtering out potential biases, the MA confirms our expectations of a robust and positive effect of PTA.

Local context and exports: an analysis with a matched sample of firm–province data

ABSTRACT New–new international economics literature argues that firm characteristics have a primary impact on their ability to export. However, a parallel strand of the literature highlights the role of context where firms operate. This paper studies the export performance of about 4300 Italian manufacturing firms between 2000 and 2013. The results show that, even by controlling the effect of firms’ characteristics, features of the local context where firms operate – such as the distance from foreign markets, the level of social capital, the efficiency of the public sector, the degree of financial development and the extent of agglomeration economies – have a significant impact on firms’ export.

Determinants of Exports: Firm Heterogeneity and Local Context

It is frequently argued that the geographical context in which firms operate can have a crucial impact on their propensity to internationalize. In this paper, we present the results of an empirical analysis that examines the determinants of export performance for a sample including more than 4,300 Italian manufacturing firms over the period 2000-2013, focusing on the role of provincial context, after controlling for firm-level characteristics. To this end, we first adopt a cluster analysis methodology to classify each Italian province in terms of context variables, such as: the distance to foreign markets, the level of human and social capital and the degree of efficiency of the public administration. Second, we estimate a set of binomial choice and linear models to assess the impact of the economic and social environment on the extensive and intensive margins of trade. The results, after confirming that firm-specific factors (size, experience, productivity, capital intensity, innovation, geographical agglomeration and, to some extent, credit constraints) affect both the intensive and the extensive margins of exports, show that context characteristics at the province level have an additional (statistically and economically) significant impact on the export performances of firms.