Updated November 2009

  juan.carluccio "at" pse.ens.fr
  + 33 (0)6 77 35 73 05

PhD in Economics, EHESS and Paris School of Economics (with Highest Honors)

Thesis Title: Essays on Globalization and Industrial Structure
Committee: Thierry Verdier (advisor), Thierry Mayer, Gianmarco Ottaviano, Diego Puga, Steve Redding.

CV   

Currently Visiting Scholar at the London School of Economics

Research Interests
Primary Field: International Trade
Secondary Field: Development Economics

References
Thierry Verdier (Paris School of Economics),Thierry Mayer (Sciences Po),
Stephen Redding (London School of Economics)

Job market paper

Wage Bargaining and the Boundaries of the Multinational Firm
with Maria Bas

Do variations in labor market institutions across countries affect the cross-border organization of the firm? Using firm-level data on multinationals located in France, we show that firms are more likely to outsource the production of intermediate inputs to external suppliers when importing from countries with empowered unions. Moreover, this effect is stronger for firms operating in capital-intensive industries. We propose a theoretical mechanism that rationalizes these findings. The fragmentation of the value chain weakens the union's bargaining position, by limiting the amount of revenues that are subject to union extraction. The outsourcing strategy reduces the share of surplus that is appropriated by the union, which enhances the firm's incentives to invest. Since investment creates relatively more value in capital-intensive industries, increases in union power are more likely to be conducive to outsourcing in those industries. Overall, our findings suggest that multinational firms use their organizational structure strategically when sourcing intermediate inputs from unionized markets.

Research paper #2

Global Sourcing under Imperfect Capital Markets
with Thibault Fally
Revise and re-submit at The Review of Economics and Statistics

We develop a simple model to study the interactions between a supplier's financial constraints and contract incompleteness in a vertical relationship. Production complexity increases the extent of contract incompleteness and the hold-up problem, which generates a cost when the supplier needs financial participation from the downstream firm. Vertical integration alleviates the impact of financial constraints but reduces the supplier's incentives. We apply the model to an analysis of multinational firms' sourcing strategies and predict that (1) complex and specific inputs are more likely to be sourced from financially developed countries and (2) multinationals are more likely to integrate suppliers located in countries with poor financial institutions, especially when trade involves complex goods. We examine and validate these predictions using firm-level trade data on multinational firms with operations in France. We provide evidence that financial development generates a comparative advantage in the supply of complex goods. Moreover, we find higher shares of intra-firm imports of complex inputs from countries with a lower level of financial development. The findings are robust to different measures of complexity and specificity, and are not driven by industry differences in fixed costs or traditional measures of external financial dependence. Quantitatively, we find that financial development is as important as contract enforcement in alleviating hold-up problems.

Research paper #3

Multinationals, Technological Incompatibilities and Spillovers
with Thibault Fally

Empirical studies provide evidence of positive spillovers from multinational firms to upstream suppliers coupled with negative spillovers to firms in the same industry. This paper shows that these empirical regularities can be rationalized in a model with incompatibilities between foreign and domestic technologies. When foreign technologies require specialized inputs, some local suppliers self-select into production for multinational firms. This "technological segmentation" in the upstream industry magnifies the productivity advantage of multinationals by restricting backward and forward linkages to groups of firms using the same technology. In this setting, we study the role of heterogeneity among domestic firms. We show that only the best suppliers adopt the foreign technology and cater to multinationals. In the long run, technology adoption by the most productive downstream firms creates complementarities with multinationals that can offset the negative impact of segmentation.

Contact
Tel. : + 33 (0)6 77 35 73 05
Email : carluccio "at" pse.ens.fr