ACADEMIC PUBLICATIONS

Published in working paper series

Mis-allocation Within Firms: Internal Finance and International Trade, 2020, CEPR Working paper No. DP14478
(joint work with Sebastian Doerr, Dalia Marin and Thierry Verdier) Quotation (bibtex)
Abstract. We develop a novel theory of mis-allocation within firms (rather than between firms) due to managers' empire building. We introduce an internal capital market into a two-factor model of multi-segment firms. We show that more open markets impose discipline on competition for capital within firms, which explains why exporters exhibit a lower conglomerate discount than non-exporters (a fact that we establish). Testing our model with data on US companies, we establish that import competition reduces mis-allocation within firms. A one standard deviation increase in Chinese imports lowers the conglomerate discount by 32% and over-reporting of costs by up to 15%.
(a current version of this working paper is available upon request at suverato@kof.ethz.ch)

Skill Scarcity and Export Intensity, 2019, CESifo Working paper No. 7787
(joint work with Carlo Perroni) Quotation (bibtex)
Abstract. We describe a model of trade with input based product differentiation and non-proportional trade costs that is capable of predicting a positive correlation between firms’ export intensity, the price of their exports, and the wages they pay to their workers. These correlations arise in the model solely from comparative input scarcity and independently of any productivity differentials: in equilibrium, firms that employ workers with comparatively scarcer skills, other things equal, export a larger proportion of their output, pay higher wages and charge higher prices.
(a current version of this working paper is available upon request at suverato@kof.ethz.ch)

Trade and the Labor Market: a Dynamic Model with on-the-job Search, 2014, Centro Studi Luca d'Agliano, University of Milan, Working paper No. 2014-368 Quotation (bibtex)
Abstract. This paper develops a dynamic general equilibrium model of trade with heterogeneous firms and homogeneous workers who search for a job also when they are employed; on the job search (OJS). The model is able to predict the short-run costs due to labor market adjustment and the long-run gains from increased trade exposure. The model shows how the destruction of jobs, caused by trade-induced rm exit, determines a rise in unemployment and a reduction in the probability to find a job. As a result, welfare decreases in the short-run. However, this allocation is unstable. The excessively low labor market tightness triggers the recovery. During the adjustment, the probability of receiving a wage o er grows, the wages increase and new exporters expand employment also at the expenses of relatively low productivity firms which shrink. In the long-run, trade increases welfare; not
only because of a greater aggregate productivity, but also because the initial loss of jobs is o set and the average wage is higher.
(a current version of this working paper is available upon request at suverato@kof.ethz.ch)

Income and Wealth Distributions in a Population of Heterogeneous Agents, 2014, Munich Discussion Paper No. 2014-21
(joint work with Pietro Muliere) Quotation (bibtex)
Abstract. This paper develops a simple framework to characterize the distribution of income and wealth in a real business cycle model. Agents are of two types depending on the human factor of production they own and they are located in separated markets,cities. In each city the two types of agent match to produce a composite factor, human service. We show that if the population is an exchangeable sequence of agents’ types generated according to a Pòlya urn then (i) the share of agents’ type follows a Beta distribution and (ii) the functional form of the matching function belongs to the family of the constant elasticity of substitution, with agent shares that depend on the composition of the population.
(a current version of this working paper is available upon request at suverato@kof.ethz.ch)

Work in Progress

Jobs Come and Go: Trade, Labor and the Age Trap, 2019
(joint work with Peter Egger and Katharina Erhardt)

Market Power and Wage Inequality in the New Global Economy, 2018
(joint work with Gianmarco Ottaviano)

A Model for the Production Function, 2017
(joint work with Pietro Muliere)

Migrant Networks, Search Frictions and Labor Market Outcomes, 2016
(joint work with Michele Battisti and Gabriel Felbermayr)

The Stolper-Samuelson Theorem when the Labor Market Structure Matters, 2016
(joint work with Kerem Cosar)