Research
Work in progress
The Intangible Economy and the Decline of Corporate Leverage in Europe (with Tomislav Ladika and Enrico Perotti). Draft coming soon;
Abstract
Contrary to trends in household and government debt, corporate leverage has steadily declined over the past two decades across most economies. This paper documents the EU trend using novel microdata for the near-universe of firms across 21 European countries. Leverage in the EU has fall steadily since 2002, in good and bad times, declining at similar rates across firms of different sizes, productivity and dividend policies. While traditional explanations focus on tighter credit supply, our evidence suggests a key role for falling credit demand, driven by lower prospects and in-house development of intangible capital. In a dynamic model of tangible and intangible investment, firms better at creating intangibles need less upfront financing and achieve greater economies of scale, higher profitability and market power. As intangibles are less appropriable, they face more external financing constraints, while retention of key human capital requires less financial risk. Firms thus store cash and limit net leverage for both strategic and traditional precautionary purposes. We quantify the importance of each channel in explaining the decline in European corporate leverage.Effects of Product Market Regulation on Service Productivity in the EU: Evidence from Firm Level Data (with Martin Borowiecki). 2025. OECD Working Paper ;Download paper
Abstract
This paper studies how product market regulation (PMR) affects firm-level labour productivity growth and within-sector labour reallocation across EU countries and service sectors from 2000 to 2021. Using productivity shocks to U.S. parent firms as instrument for productivity spillovers, it finds that stricter PMR weakens the positive impact of US shocks on EU subsidiary productivity growth and hampers within-sector labour reallocation. In highly regulated countries and sectors, productivity spillovers are diminished, and employment growth in more productive firms slows. The findings suggest that pro-competition reforms and greater market integration could strengthen productivity and reallocation in the EU service sector.Blurred Price Signals in EU Emissions Trading System (with Andrea Titton);
Abstract
We model firm the link between firms’ innovation decisions and the price of EU ETS. We then calibrate the model using French firm level data. We show that large volatility in the price of EU ETS can coordinate firms into postponing the green transition.Publications
Intangible assets and imperfections in product and labor markets (with Eric Bartelsman and Sabien Dobbelaere). 2026. European Economic Review, vol. 186, 105309 • Link to paper, VoxEU Article
Abstract
This paper develops a micro-founded framework linking price–cost and wage markups to intangible assets. Intangible assets, once created, are a source of firm rents. Owing to limits to enforceable ownership and the non-rival nature of knowledge, these rents can be both retained by the origin firm and transferred to a competitor through poaching of workers. Search and matching frictions affect labor mobility and result in bargaining over rents between the firm and the worker. This environment generates hold-up in intangible asset creation and motivates rent sharing. Under non-compete agreements, poached workers face start delays that weaken outside options. Using microdata from the Netherlands, we document higher price–cost and wage markups in more intangible-intensive firms and lower wages for workers with non-compete agreements, consistent with the model.The impact of the euro on trade: two decades into monetary union (with Vanessa Gunnella, Laura Lebastard, Paloma Lopez-Garcia and Roberta Serafini,). 2021. ECB Occasional Paper Series • Download paper
Abstract
The consensus back in 2008 – ten years after the introduction of the euro – was that the adoption of a common currency had made a limited impact of around 2% in total on the trade flows of the first wave of euro area countries (Baldwin et al., 2008). Since then, six more countries have joined the euro area, and firms have internationalised their production processes. These two phenomena are interrelated and may have changed the way the common currency affects the euro area economy. Therefore, with the common currency now into its third decade – and with more countries queuing to adopt it – this paper revisits the trade effects of the euro, focusing on the newer euro adopters (i.e. those countries that have adopted the euro since 2007) and their interaction with the first wave of euro area members via supply chains. The contribution of the paper is twofold. First, it revisits the estimated aggregate impact of the euro on euro area trade, as well as on trade within and between the two waves of adopters. Data on bilateral flows between 1990 and 2015 for an extended sample of countries to estimate a gravity equation indicate a significant trade impact, ranging between 4.3% and 6.3% in total on average, with the magnitude being the highest for exports from the second wave of adopters to the first wave of adopters. If a synthetic control approach (Abadie and Gardeazabal, 2003; Abadie et al., 2010) is used instead, the estimated gains associated with euro adoption are greater. In particular, exports of both intermediate and final products from countries belonging to the first wave of euro adopters to those belonging to the second wave are estimated to have increased by about 30% using this approach. The second contribution made by this paper relates to the channels through which trade might be affected by a currency union. This question is explored by looking separately at trade in intermediate goods and final products. While we find that trade gains were mainly driven by trade in intermediate goods among countries that adopted the currency earlier (5.3%), our results also show that the euro had a positive effect on the exports of final products from the second wave of adopters to other euro area countries. This effect is as high as 10.6% with the gravity model and 32% with the synthetic control approach. One of the reasons for the difference in the range of estimates between the two approaches might be that the gravity model can control for unobserved characteristics via fixed effects, while the synthetic control approach may fail to do so. These results suggest that the euro facilitated the establishment and expansion of international production chains in Europe. In turn, this is likely to have increased business cycle synchronisation in the euro area and to have supported market access for later adopters.Living with Lower Productivity Growth: Impact on Exports (with Filippo Di Mauro, Bernardo Mottironi, Gianmarco Ottaviano). 2019. Facing Up to Low Productivity Growth, Columbia University Press, New York (USA). eds. Posen A. and Zettelmeyer J. • Link to download