This paper empirically shows that the imbalance between an ethnic group's political and military power is crucial to understanding the likelihood that such a group engages in a conflict. We develop a novel measure of a group's military power by combining machine-learning techniques with rich data on ethnic group characteristics and outcomes of civil conflicts in Africa and the Middle East. We couple this measure with available indicators of an ethnic group's political power as well as with a novel proxy based on information about the ethnicity of cabinet members. We find that groups characterized by a higher mismatch between military and political power are between 30% and 50% more likely to engage in a conflict against their government depending on the specification used. We also find that the effects of power mismatch are non-linear, which is in agreement with the predictions of a simple model that accounts for the cost of conflict. Moreover, our results suggest that high-mismatched groups are typically involved in larger and centrist conflicts. The policy implication is that power-sharing recommendations and institutional design policies for peace should consider primarily the reduction of power mismatches between relevant groups, rather than focusing exclusively on equalizing political power in isolation.

This study investigates the impact of code-sharing (CS) agreements on airfares in Africa, a region largely overlooked in existing airline cooperation research. Analysing a comprehensive dataset covering international one-stop routes in Africa from 2017 to 2019, we examine the direct effects of CS agreements on connecting itinerary discount economy fares that swap from interline to CS. Additionally, we explore the spillover effects of airlines adopting CS on the fares of those that do not implement it. Our key findings reveal that the implementation of CS agreements results in an approximately 18% reduction in airfares for African international routes. Furthermore, we identify a negative spillover effect, demonstrating reduced airfares for interline itineraries by 12% when rival pairs adopt CS, while online and direct itineraries experience smaller reductions (around 4%).

This paper shows that trade in services is still at its infancy in Africa. Its growth started later than for other developed and developing economies and, so far, it involves mostly low‐skilled services. Disentangling the different sources of trade growth, we find that demand and supply determinants have been relatively stable during the period 2002–2016, while service diversification and trade policy are the main propellants. In particular, trade in goods liberalisation increased services trade as well due to the complementarities between the two. In terms of geographical and industrial involvement, services produced in Africa are able to reach farther destinations than goods, but they are concentrated on industries close to final demand, thus missing high‐skilled services that are more upstream, but represent higher value‐added inputs. Therefore, there is still plenty of scope to consider trade in services as a potential source of growth and development for African countries.

What determines violent reaction during state formation processes? To address this question, we exploit the uprisings that occurred when southern Italy was annexed to Piedmont during Italian unification in the 1860s. We assemble a novel dataset on episodes of brigandage, a form of violent rebellion against the unitary government, and on pre-unification social and economic characteristics of southern Italian municipalities. We find that the intensity of brigandage is ceteris paribus lower in and close to settlements of Piedmontese origin. We argue that geographical distance from these communities is a proxy for cultural distance from the Piedmontese rulers. Thus, our results suggest that, in the context of state formation, cultural proximity to the new ruler reduces social unrest by local communities. After ruling out alternative mechanisms consistent with the economic literature, we provide suggestive evidence of cultural persistence and diffusion in our context, and discuss two possible culture-based drivers of our results: social identification with the Piedmontese rulers, and a clash between local values and some specific content of the new institutions.

Can religiosity affect the emergence and migration patterns of scientists? We focus on 19th-century France, a period in which the Catholic Church had embraced a particularly antiscientific attitude, and we exploit variation in intensity of Catholicism. Using data on the places of birth and death of famous individuals from 1790 to 1880, we show that more religious cantons were less likely to give birth to scientists, but religiosity did not play a role for their migration choices. We shed light on the mechanism and suggest that accumulation of scientific human capital earlier in life was key: religious vs. secular secondary education can partly explain the negative relationship between religiosity and the “birth” of scientists. Finally, placebo regressions show that religiosity is not associated with the birth and migration patterns of famous individuals in nonscientific professions.

We study the effects of import competition on workers' mental distress, using unique longitudinal data on mental health for British residents, coupled with measures of import competition in more than 100 industries over 1995–2007. We find that import competition has a large negative impact on individual mental health. Compared to a worker employed in the industry at the 25th percentile of the import competition distribution, a worker employed in the industry at the 75th percentile would need a yearly monetary compensation of £270 to make up for her greater utility loss. We find import competition to have larger effects on the right tail of the mental distress distribution, thereby increasing inequality in mental health not only across but also within industries. We show that this is consistent with import competition disproportionately hitting specific groups of workers in an industry, such as the youngest or those with a large family, a poor financial condition, a short job tenure, a temporary contract, and a blue-collar or tradable job. Using information on family ties, we find that import competition has negative spillovers to other family members. In particular, women's mental distress increases as a consequence of the import competition faced by their partners. Moreover, paternal import competition leads to reduced investment in child rearing and worsened children's self-esteem and life satisfaction. Finally, we provide evidence that import competition is likely to work through a complex set of channels. These include observable labor market outcomes such as higher likelihood of job displacement and lower wage growth, but also reduced job satisfaction and gloomier expectations about the future.

This article presents evidence that cultural proximity between the exporting and the receiving countries positively affects the adoption of new institutions and the resulting long-term economic outcomes. We obtain this result by combining new information on pre-Napoleonic principalities with county-level census data from nineteenth-century Prussia. We exploit a quasi-natural experiment generated by radical Napoleonic institutional reforms and the deeply rooted cultural heterogeneity across Prussian counties. We show that institutional reforms in counties that are culturally more similar to France, in terms of religious affiliation, generate better long-term economic performance.

We study how cultural distance affects the rejection of imposed institutions. To do so, we exploit the transplantation of Piedmontese institutions on Southern Italy that occurred during the Italian unification. We assemble a novel and unique dataset containing municipal-level information on episodes of brigandage, a form of violent uprising against the unitary government. We use the geographic distance from local settlements of Piedmontese descent as a proxy for the cultural distance between each municipality and the new rulers. We find that cultural distance from the origins of the transplanted institutions is significantly associated with more intense resistance to these institutions. We provide evidence that our results are partially explained by a clash between the content of the Piedmontese institutions and local social norms. Our findings further suggest that the rejection of transplanted institutions may have a long-lasting effect on political participation.

We study how cultural distance affects the rejection of imposed institutions. To this purpose, we exploit the transplantation of Piedmontese institutions on Southern Italy which occurred during the Italian unification. We assemble a novel and unique dataset containing information on episodes of brigandage, a form of violent uprising against the unitary government, at the municipal level. We use geographic distance from local settlements of Piedmontese descent as a proxy for cultural distance between each municipality and the new rulers. We find robust evidence that cultural distance from the origins of the transplanted institutions is significantly associated with more intense resistance to these institutions. Our results further suggest that the rejection of the transplanted institutions may have a long lasting effect on political participation.

We study the effect of import competition on workers’ mental distress. To this purpose, we source information on the mental health of British workers from the British Household Panel Survey, and combine it with measures of import competition in more than 100 industries over 2001-2007. We find an increase in import competition to have a positive, statistically significant, and large impact on mental distress. The effect is strikingly robust to controlling for a wide range of individual, household, and industry characteristics. We show that part of the effect is due to import competition worsening the current labor market situation of individuals, in terms of higher probability of job displacement and lower wage growth. Additionally, and most importantly, we show that import competition worsens mental health also for individuals witnessing no change in observable labor market conditions, by increasing stress on the job and worsening expectations about the future.

We study how financial imperfections affect product quality across countries and industries, and analyze the implications for trade flows and prices. To this purpose we assemble a unique data set, which contains estimates of export quality, financial development, and financial vulnerability, for all countries and manufacturing industries over the last three decades. We find the interplay between cross-country differences in financial frictions and cross-industry differences in financial vulnerability to be an important determinant of the geographical and sectoral variation in average product quality. We show that this effect mostly occurs along an intensive margin, whereby financial imperfections distort the quality of existing exports to a given destination market. Finally, we provide evidence that quality adjustments are an important mechanism through which financial development shapes the variation in trade flows and export prices across countries and industries.

This paper measures price-cost margins (PCM) at firm level by using balance sheet data. These measures, once aggregated at industry level, provide values close to the ones obtained through the estimation method proposed by Roeger (1995). The advantage of a firm-level measure is that it allows to decompose aggregate PCM dynamics into five components: a within effect (which is the change attributable to the pricing behavior of the incumbents given their market share), a reallocation effect (which accounts for the redistribution of market shares among incumbents, keeping the PCM constant), the interaction effect (which gives information about the underlying market dynamics) and entry and exit effects. Using data for Italy for the period 2000-2007 in 30 sectors (defined at NACE 3-digit level) we find some contrasting evidence for PCMs in manufacturing industries, while we observe a clear upward trend for PCMs in services.

Working on a strati…ed sample of French and Italian …rms extracted from the EFIGE dataset and matched to AMADEUS balance sheet data, we …rst apply a Laspeyres-type decomposition of …rm-level price-cost margin (PCM) in order to distinguish …rms into four competitive classes, according to the combined changes of their PCM and market shares over the 2000-2009 period. We then exploit the unique information available in the EFIGE dataset in order to match …rm-speci…c characteristics (export and foreign status, multi-product, quality, pricing strategy) to these di¤erent reactions of …rms to competitive shocks via a multinomial

This Report analyses and compares a number of indicators related to the evolution of the competitive behaviour of firms in the Single Market, from 1999 to 2007, in a selected number of both manufacturing and services industries and eight EU countries: Belgium, Germany, France, Italy, Poland, Romania, Spain and Sweden. A novelty of the approach is that the analysis is derived from firm-level observable data, which allow to grasp not only information on the average changes taking place in each industry and across countries, but also the distribution and sources of these changes in terms of individual firms' pricing behaviour and market shares, an information which is impossible to gather in detail from aggregate, traditional sector-level measures.

We investigate the effects of import penetration on the observed price-cost margins using an unbalanced panel of some 70,000 firms, on average, operating in the Italian manufacturing sector from 2000 to 2007, controlling for the potential endogeneity of the trade measure and the multi-product characteristics of firms. Using an error correction model to distinguish the short vs. long-run adjustment path of the PCM, we find that, in the short-run, multiproduct firms have a more sluggish adjustment of their PCM to the trade shock. In the long-run we find a robust negative relationship between the PCM and import penetration, while no significant role is played by the multi-product characteristic of the firm. This finding suggests that the pro-competitive effect of trade shocks affect steady-state industry equilibria, with the characteristic of being a multi-product firm endogenous to the market structure. However, in the short run the adjustment process of multi-product firms to the trade shock might be significantly more sluggish. JEL classification: F15, L11