Published work

A firm level approach on the effects of IMF programs (with Silvia Marchesi) - Journal of International Money and Finance (2023)

This paper evaluates the effects of IMF programs at the firm level and considers the role of firm financing constraints as a channel of transmission. We examine different dimensions of a Fund program, namely participation and scope of conditionality. We find a positive effect of IMF programs on firms’ sales growth, such that average sales growth can be up to 26 percent higher in firms exposed to IMF programs, and such effect is persistent over time. We also find evidence that the firms’ financing constraint plays a role in the transmission of effects, and alleviation of these constraints improves performance. This paper, aside from providing new evidence on the effectiveness of IMF programs, brings attention to the role (and effectiveness) of official intervention, an important but under-analyzed dimension of international finance. 

Is to Forgive to Forget? Sovereign Risk in the Aftermath of Private or Official Debt Restructurings (with Silvia Marchesi and Tania Masi) - IMF Economic Review (2023)

We examine the link between sovereign defaults and credit risk by distinguishing between commercial and official debt and by taking into account the extent of the final restructuring events, which take place at the end of a default spell. We use a local projection-based approach, combined with propensity score weighting (Jordà and Taylor 2016), to estimate the average treatment effect of the final restructuring on our outcome variables of agency ratings and bond yield spreads. Our results show that the average treatment effect on ratings is negative (and positive for bond spreads) up to seven years following the final restructuring with private creditors, while the opposite holds for official creditors. Furthermore, our results are robust to using a panel analysis, which allows us to investigate the importance of the final haircut size. Specifically, we find that the rating (spread) variation (increase) is larger for cases with deeper haircuts. Therefore, we find evidence that official and private defaults have different costs and then may induce selective defaults. 

Critical dimensions in the empirical measurement of common shareholding  (with Nicoletta Rosati and Maria Martinez Cillero) - Research in International Business and Finance (2024)

The debate on common shareholding and its potential antitrust effects is currently on the agenda of major institutions worldwide. Discussions point to the need for improved empirical quantification of this phenomena. This work presents a flexible, multifaceted statistical framework for a set of new common shareholding indicators, covering both firm and investor perspectives, which can be adopted under different economic models. Many indices currently used in the literature fall within this framework as special cases. Aggregation at market level yields suitable industry-level indicators, providing policymakers with tools to evaluate the extent of common ownership in strategic markets. The indices are tested using firm-level data for European Mobile Network Operators in 2007–2021, showing a sector with concentrated ownership under large corporate groups, but also the presence of institutional investors with extensive ownership across the major firms. 

Works in progress

Wedded to Prosperity? Informal Influence and Regional Favoritism (with Axel Dreher, Andreas Fuchs, Teresa Hailer, Andreas Kammerlander, Lennart Kaplan, Silvia Marchesi, Tania Masi, Charlotte Robert, and Kerstin Unfried) - CEPR Discussion Paper 18878

We investigate the informal influence of political leaders' spouses on the subnational allocation of foreign aid. Building new worldwide datasets on personal characteristics of political leaders and their spouses as well as on geocoded development aid projects (including new data on 19 Western donors), we examine whether those regions within recipient countries that include the birthplace of leaders' spouses attract more aid during their partners' time in office. Our findings for the 1990-2020 period suggest that regions including the birthplaces of political leaders' spouses receive substantially more aid from European donors, the United States, and China. We find that more aid goes to spousal regions prior to elections and that developmental outcomes deteriorate rather than improve as a consequence. For Western aid but not for China, these results stand in some contrast to those for leader regions themselves. This suggests that aid from Western donors is directed from serving obvious political motives to promoting more hidden ones.

Do IMF Programs Stimulate Private Sector Investments? (with Silvia Marchesi and Rima Turk Ariss) - (Revise and Resubmit IMF Economic Review)

In this paper, we consider that the adoption of an IMF program reduces policy uncertainty in the country, improving its future economic prospects and therefore firm investments. First, we use a local projection methodology to estimate the dynamic response of firm investments to the approval of an IMF arrangement, finding that distinguishing between General Resource Account (GRA) and Poverty Reduction and Growth Trust (PRGT) financing matters for the path of investment. In the second part of the paper, we adopt a difference-in-differences approach to exploit firm-level information. We focus on three main characteristics, namely external financial dependence, sectoral uncertainty, and whether the firm operates within the country, documenting the mechanisms through which policy uncertainty may affect firm investments. Our results show that firms relying more on external finance, or which are more subject to uncertainty, invest more following a program approval. Finally, using ownership data, we find that private investments are stimulated more for firms having domestic ownership. The presence of a private investment transmission channel could help improve our understanding of what factors can influence the effectiveness of IMF programs. 

Policy work

Common shareholding in Europe  (with Nicoletta Rosati, Massimiliano Ferraresi, Annalisa Frigo, and Michela Nardo)

EU Commission DG-JRC technical report 121476 prepared for DG-Competition, 2020, studying the presence of common ownership trends in the European Union. Report is mentioned in the 2020 Annual report on Competition Policy, Commission Staff Working Document (2021) 177.