Pierpaolo Giannoccolo

The Brain Drain: A Survey of the Literature

This paper reviews the theoretical and empirical literature on Brain Drain (BD). We propose an ideal path that links the first studies with the most recent ones. In this development, the literature on BD focuses on a variety of economic and social issues and recalls to national and international debates. This paper uses more than 350 articles from a variety of sources. The sources are specialized professionals journals, internet research engines, governmental publications and newspapers. In the first section we analyse the main motivations of the researchers to study the BD and we propose an ideal path to interpret this literature. In the second section we analyse the different definitions of the BD and we show that the BD is a wide and complex phenomenon. In the third section we analyse the historical roots of the BD by identifying the BD “ante litteram”. In the fourth section we analyse the “geography” of the BD. Finally, in the fifth section we analyse both some important topics linked to the BD (International Organizations, Population and Research), both the economics models that study the BD.

Formation of share market prices under heterogeneous beliefs and common knowledge

Financial economic models often assume that investors know (or agree on) the fundamental value of the shares of the firm, easing the passage from the individual to the collective dimension of the financial system generated by the Share Exchange over time. Our model relaxes that heroic assumption of one unique “true value” and deals with the formation of share market prices through the dynamic formation of individual and social opinions (or beliefs) based upon a fundamental signal of economic performance and position of the firm, the forecast revision by heterogeneous individual investors, and their social mood or sentiment about the ongoing state of the market pricing process. Market clearing price formation is then featured by individual and group dynamics that make its collective dimension irreducible to its individual level. This dynamic holistic approach can be applied to better understand the market exuberance generated by the Share Exchange over time.

Complementarities and coopetition in presence of intangible resources

Purpose – The purpose of this paper is to develop a model of innovative industries which face coopetition: firms compete while committing at the same time to RD they raise specific accounting issues concerned with recognition and measurement of intangible resources committed to, and generated from them.Design/methodology/approach – The paper develops a heuristic industrial economic model characterized by joint utility of outputs for custumers on the demand side, and potential complementarities in R&D activities on the supply side. The authors’ model describes different scenarios generated by alternative corporate pricing strategies. In particular, these strategies (as implemented by firms or imposed by regulators) influence both infrastructure corporate investments and the creation and stability of coopetitive relationships.Findings – The model scenarios ...

Financial Disclosure and the Board: A Case for Non-Independent Directors

In listed companies, the Board of directors has ultimate responsibility for information disclosure. The conventional wisdom is that director independence is an essential factor in improving the quality of that disclosure. In a sense, this approach subordinates expertise to independence. We argue that effective certification may require firm-specific expertise, in particular for intangible-intensive business models. However, this latter form of expertise is negatively related to independence as it is commonly measured and evaluated. Accordingly, there exists an optimal share of independent directors for each company, related to the level of intangible resources.

Strategic Urban Development Under Uncertainty

The aim of this paper is to analyze the equilibrium strategies of two developers in the real estate market, when demands are asymmetric. In particular, the paper considers three key features of the real estate market. First, the cost of redeveloping a building is, at least partially, irreversible. Second, the rent levels for different buildings vary stochastically over time. Third, demand functions for space are interrelated and may produce positive or negative externalities. Using the method of option pricing theory, the paper addresses this issue at three levels. First, it models the investment decision of a firm as a preassigned leader as a dynamic stochastic game. Then, it solves for the non-cooperative case, and for the perfectly cooperative case, in which redevelopment of an area is coordinated between firms. Finally, it analyzes the efficiency/inefficiency of the equilibria of the game. It is found that if one firm has a significantly large comparative advantage, the preemptive threat from the rival will be negligible. In this case, short burst and overbuilding phenomena, as predicted by Grenadier (1996), will occur only as a limiting case.

Brain Drain and Fiscal Competition: A Theoretical Model for Europe

In this paper we study Brain Drain (BD) and Fiscal Competition (FC) in a unified framework for the European Union (EU) specific context. Potential mobility of educated workers can increase the degree of FC through taxation or the provision of public education. An increase in FC can be caused by competition among different jurisdictions that aim to attract educated workers. When the importance of FC increases, then the European States may employ FC as a new policy tool. We propose a simple model in which is possible describe different scenarios: Brain Gain (when BD may increase average productivity in the source economy); Brain Drain (when there is unidirectional flow of highly skilled workers that is welfare-deteriorating in the source economy); Migration Competition (when the regions have not high differences in the productivity and they compete attracting educated workers); Fiscal Competition (when jurisdictions compete either to attract a mobile tax base), This simple model help us to explain several policies implemented by European regions.

Revealing incentives for vertical integration in the presence of glocal policies

Local and regional policy makers are acquiring an increasingly active role in affecting firms’ specialization decisions that in turn influence firms’ vertical organization. We analyse the relation between vertical integration incentives and trade liberalization in the presence of glocal policies, i.e., specific (local) policies that have international (global) impact. More precisely, one of the most important reasons for vertical integration in the presence of sunk costs of specialization is avoiding the risk of hold up. We introduce the idea that this sunk cost can be manipulated by the policy maker at national/regional/local level. We characterize the conditions under which policies are effective in achieving a particular equilibrium in terms of vertical structure and specialization decision. The main result is that the policy effectiveness is stronger the higher is the importance of the hold-up problem. In particular, we investigate how glocal policies interact with policies that affect the market openness (trade policy). We find that for high values of the specialization upgrade cost, trade policies are ineffective. At the same time, if the trading cost is very low, glocal policies are ineffective. Finally, in the presence of intermediate specialization upgrade and trading cost, either policy supplements the other policy.

Fiscal Competition, Brain Drain and Redistribution

The debate on the effects of high skilled migration (Brain Drain) has recently intensified. Actually, the BD literature is not adequate to explain the European Brain where there are not strong differences between sending and receiving country and there is a bi-directional BD. To cover this lack in the literature, we propose a simple model which helps us to analyze the BD mechanisms between symmetric countries. In this paper we analyze the impact of BD on redistributive policies and the provision of education as a publicly provided good. Differently of the main BD literature, this analysis is adequate to simulate the new European framework, where mobility of European citizens is free of institutional constraints and where Fiscal treatments must be identical for all the European citizens of the same region. In these contests study of the BD linked with the Fiscal Competition (FC) and the choice of education for both workers and/or by governments. Potential mobility of educated workers can increase the degree of FC through taxation or the provision of public education. An increase in FC can be caused by competition among different jurisdictions that aim to attract educated workers. When the importance of FC increases, then the States may employ FC as a new policy tool. The contribution of this study is to emphasize the increase of effciency loss caused by the two negative effects due to the absence of coordination among jurisdictions: less redistribution and less provision of education as a publicly provided good.

Migration Competition in Enlarged European Union: A Theoretical Model

In this article, we propose a theoretical model which help us to define two possible settings where the European “migration competition” could be analysed. First, we analyse the scenario in which there are two regions: a receiving country and a net sending country. In this scenario we introduce the possibility for each country to increase, by investing resources, the level of integration between countries which consequently reduces the level of migration costs. Thus it is possible to capture the receiving country’s trade off between investing resources in order to attract foreign high skilled workers or investing on educational incentives for his citizens. Second, we analyse the scenario in which there are three regions. Starting from the first scenario’s framework, we could analyse either the case in which a new country is able to intercept a significant quota of the flow of skilled migrants, either the effect of migration competition between the two regions in order to attract the skilled workers of the sending country. In both case analysed, the presence of a central authority which coordinates the migration and fiscal policies is determinant to obtain better results.