Jacopo Ponticelli is another UPF doctoral candidate on the job market... shooting all the lights out. We have had some spectacular successes in recent years, and I am very happy we have another winner. Jacopo works on the effects of financial reform on credit availability and firm productivity, looking at a natural experiment in Brazil. The abstract of this JMP is
Financial reform designed to improve creditor protection is often encouraged as a way to increase credit access for firms in developing countries. In this paper, I show that when court enforcement works poorly, financial reform is ineffective in fostering both credit access and the productivity of firms. In the empirical analysis, I exploit variation in the quality of court enforcement across Brazilian judicial districts and use a panel of manufacturing firms. I find that, after the introduction of a major pro-creditor bankruptcy reform, firms operating in districts with efficient court enforcement experienced substantially higher increase in capital investment and productivity than firms operating in districts with poor court enforcement. I provide evidence that this effect is due to a higher probability of external funds being used to finance investment in new technologies. To show that the results are not driven by district-level omitted variables, I use an IV strategy based on state laws establishing the geographical boundaries of judicial districts.His fly-out list now includes Harvard BSchool, Stanford GSB, Berkeley, Princeton Econ, Chicago Booth (another flyout without an interview), Kellogg, Bocconi, LSE, Science Po. Of course, getting the fly-out is only half the job... fingers crossed. So far, I am thrilled. I am not his main advisor, but on the committee... and a co-author on a joint paper on the effects of austerity on social unrest and instability:
Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. The results show a clear correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the case. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest after austerity measures. Growing media penetration does not strengthen the effect of cut-backs on the level of unrest.