ABSTRACT. No abstract

ABSTRACT. Climate change can be a determinant factor when we consider the reasons behind the mobility of the people. In this paper, we aim to shed light upon the connection between climate change and international migration from Asia. This region is one of the most affected across the globe, due to the vulnerability of its inhabitants to climate change driven events based on various factors. We study migration of people from 44 Asian countries to 29 OECD destination countries during 2000-2020. We employ Poisson Pseudo Maximum Likelihood estimator (PPML) with fixed effects and the main specification uses temperature changes as a proxy for climate change. The results show that climate change plays an important role in migration from Asia. For robustness checks we change the proxy for climate change, by using natural disasters and CO2 emissions. Results are stable, as we find a significant influence of climate change on migration.

ABSTRACT. Immigrant return flows are a crucial aspect of the migration phenomenon. However, empirical evidence remains scarce due to limited data availability. This paper exploits a unique administrative dataset covering the entire population of immigrants in Italy to estimate the impact of various macro- and micro-level factors on migration duration using time-to-event models. We begin by providing descriptive evidence on return migration for all immigrants who arrived in or departed from Italy between 2011 and 2022. We then focus on the cohort that arrived in 2011, conducting a duration analysis. Our findings from the survival model, despite its limitations, indicate that economic factors play a more significant role than political ones in driving return migration. Additionally, male and older migrants tend to have shorter stays compared to women and younger migrants. To gain deeper insights into migration duration, we employ quantile regression, which allows us to overcome some limitations of the survival model. The results show that factors such as gender, age, economic conditions, and political stability influence migration duration differently across short- and long-term stays. At higher percentiles of duration, women and younger migrants stay for shorter periods than men and older migrants, whereas the opposite is observed at lower percentiles. Political instability in origin countries primarily affects migrants with longer stays. Economic factors have a more uniform impact across all quantiles, with higher living costs in Italy and rising GDP per capita in origin countries reducing migration duration, while higher average wages in Italy prolong it.

ABSTRACT. This paper quantifies the importance of political push factors as motives for asylum migration for a global sample of 84 sending and 31 receiving OECD countries over the period 2000-2023. Push factors include: political terror, civil liberties, political rights and political risk factors such as government stability, military in politics, law and order, conflict, ethnic and religious tensions, corruption, democratic accountability, bureaucratic quality, and investment risk. We estimate a gravity model and transform all political factors so that we can apply a Poisson pseudo maximum likelihood estimator with high dimensional fixed effects (PPMLHDFE), controlling for asylum recognition (acceptance) rates, per capita income ratio, migrant networks, and development aid. Instrumenting for political factors and using the control function approach these estimations (PPMLHDFEcfa) show that political risk factors collectively explain asylum applications over the period 2000-2023. In particular, government stability is relevant throughout the period 2000-2023, and internal conflict becomes relevant in the period 2012-2023. The control function approach also provides evidence that the political factors we examine can be considered exogenous. Using these techniques, there is no evidence that political terror triggers asylum applications. Some heterogeneity emerges when examining specific subsamples. The Latin American region is most sensitive to overall political risk, while MENA, Sub-Saharan countries, East Asian and South Asian countries are not sensitive to overall political risk. Internal conflicts play a role for MENA countries, and ethnic tensions are relevant for Eastern Europe when looking at sub-components of political risk.

ABSTRACT. This paper investigates the role of shipping costs in global crude oil and refined petroleum markets. For this purpose a Global VAR (GVAR) model is estimated jointly for the oil and refined petroleum markets; this includes the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI) as measures of the cost of shipping crude oil and refined petroleum commodities, respectively. The results suggest that shocks to the cost of shipping petroleum commodities have a particularly severe negative impact on real economic activity and on refined petroleum consumption in most regions. Shocks to the price of crude oil and refined petroleum instead have inflationary effects, especially in countries that are net importers of those commodities. Further, it appears that the relationship between commodity prices and their respective shipping costs has broken down since the beginning of the Covid-19 pandemic. Specifically, a counterfactual analysis shows that the pandemic moved the prices of crude oil and refined petroleum and their costs of shipping in opposite directions. A second counterfactual scenario concerning the impact of Russian oil sanctions shows that there is a high probability that they increased shipping costs.

ABSTRACT. We propose a new approach to measure the sensitivity of economic growth to natural disasters in developing countries at different time horizons (short, medium, and long term). We allow for heterogeneous effects across growth regimes and intensities of disaster shocks using quantile-on-quantile regressions and wavelet decomposition. Our findings yield several insights. First, small disaster shocks boost GDP per capita growth in low-growth countries across all horizons. By contrast, in high-growth countries, such shocks cause sharp short-term growth declines, followed by a rapid recovery in the medium term, albeit without regaining the pre-disaster growth trajectory in the long term. Second, severe disaster shocks lead to long-term growth losses in high-growth countries, despite their initial resilience. Conversely, low-growth countries experience immediate and persistent growth declines that worsen over time. Third, the role of macroeconomic variables in mitigating or amplifying growth losses varies depending on the growth regime, disaster severity, and time horizon.

ABSTRACT. We analyze the relationship between climate risk and fiscal space in a more systematic and rigorous way. To do so, we use panel local projections to examine the role of political stability and financial development in the relationship. For a sample of 199 economies in 1990-2022, we first empirically confirm that climate risks adversely affect fiscal space. We find that such effects are most pronounced for economies most vulnerable to climate change. However, our evidence indicates that political stability and financial development can mitigate such effects. We also identify nonlinearities in the climate risk-fiscal space nexus. More specifically, the impact of climate risk on fiscal space is greater when fiscal space is most constrained, i.e., at the upper quantile of the distribution. While fiscal consolidation is the key to mitigating the adverse effect of climate risks on fiscal space, our results suggest that both political stability and financial development can contribute as well.

ABSTRACT. We estimate the contribution of spatial centrality to determine city size. We do this using archaeological data on cities of the region of Bukhara observed in the 9th CE. The unique feature of this region is that it was homogeneous in all respects (technology, amenities, climate, culture, language, religion, etc.) and has been homogeneous for the twelve centuries before the 9th CE. This homogeneity rules out confounding factors and endogeneity issues. A simple general equilibrium spatial model that we estimate predicts very well the 9th century city size thus showing that spatial centrality is the major determinant of city size. The Silk Road contributes to explaining what centrality cannot. Interestingly, the estimated on data for the same region in the 21st century performs less well, indicating that other factors influence city size in modern economies. In a further comparison with the 21st century, we find little evidence of the persistence of the oasis urban structure. We find instead that the centroid of the region has moved towards the economic core of the Uzbek economy, both in terms of population and location of cities. In a counterfactual exercise, we use the model estimated for the 9th century to compute the counterfactual population shares of the U.S. commuting zones. As expected, the model underestimates the population share of large and central zones while overestimates the share of small and peripheral zones. In a comparative counterfactual we estimate that infrastructures explain about eleven percent of populations shares of U.S. commuting zones.

ABSTRACT. This paper analyzes the location patterns of firms in the Cultural and Creative Industries (CCIs) across 947 Catalan municipalities. The interest in these industries stems from their potential for job creation, knowledge generation, and enhancing city reputation, both in urban and rural areas. Empirical literature has demonstrated these benefits, making CCIs a relevant focus of study. Catalonia is particularly interesting due to the spatial heterogeneities between urban and rural areas and the widespread presence of CCIs. Specifically, this paper examines 18 CCIs, highlighting their spatial distribution and location determinants. To account for spatial heterogeneities across Catalan municipalities, we apply a Geographically Weighted Regression (GWR), which captures the asymmetrical effects of location determinants across different areas. This approach allows for better-tailored firm entry promotion policies, recognizing that location determinants do not act uniformly across municipalities.

ABSTRACT. In the last decades, the geography of innovation activity became much more concentrated. By focusing on the US metropolitan statistical area of residence of the inventors of patents filed to the United States Patents and Trademark Office between 1990 and 2016, we show that this is increasingly true also for “green” innovation, i.e. patents covering mitigation or adaptation to climate change. We find a sharp increase in concentration across areas after the beginning of the 2000s, with areas that are generally more innovative also producing more green patents. Focusing on the relationship between green innovation and urban density, we find evidence of a positive significant relationship only after 2002. To shed some light on this puzzling outcome, we further qualified the concept of density to urban human capital density, finding the expected significant relationship between green innovation and density before and after 2002.

ABSTRACT. The current literature has largely overlooked the effects of foreign aid on tourism demand in developing countries and the channels through which this relationship operates. This study fills this gap by examining the direct and indirect effects of aid on tourism demand using data form 96 developing countries from 1995 to 2020. We reveal the existence of an inverted U-shaped relationship where aid negatively affects tourism demand beyond a specific threshold. Our findings also suggest that institutional quality and political stability are crucial for maximizing the impact of aid, while human development and economic growth serve as key mediating channels. These results imply that to effectively boost tourism demand, recipient countries should focus on strengthening governance and institutional frameworks, while donors may prioritize aid targeting human development and infrastructure that supports the tourism sector. Addressing these areas enables both donor and recipient countries to alleviate poverty and strengthen economic resilience.

ABSTRACT. This paper examines how a firm’s foreign liability composition affects its resilience during economic turmoil and identifies the key factors shaping foreign capital structures. Using firm-level data, we find that firms with a higher share of foreign equity in their liabilities were significantly less affected by the global financial crisis. This resilience can be attributed mainly to intra-firm trade credit and intra-firm loans, which provided critical financial buffers when external capital markets were distressed and domestic financing was constrained. Furthermore, firms with a positive foreign equity share were less likely to default after the crisis, highlighting the stabilizing role of foreign equity financing in improving firm resilience and supporting overall financial stability.

ABSTRACT. This paper examines the impact of US import tariffs on trade and investment through the lens of a dynamic two-country model (US vs. RoW) with monopolistically competitive firms that decide between exports and FDI. We explicitly model international supply linkages, foreign subsidiaries, and the cost and demand channels influencing FDI. Using trade elasticities and estimates on the tariff effect on the import-to-inward FDI sales ratio, we analyze how tariff revenues impact economic outcomes. Our findings highlight that a unilateral US tariff with transfers to households boosts US consumption, raises inward FDI, and reduces imports. However, higher production and investment costs lower total US investment. A real dollar appreciation cushions the impact on RoW exporters but raises production and investment costs, causing negative spillovers. If tariffs fund investment subsidies, the expansionary effects for the US intensify, and total investment turns positive, particularly for FDI inflows. The resulting investment boom raises global interest rates, amplifying negative effects on the RoW. The allocation of tariff revenues also determines the impact of retaliation. Under transfers, the US suffers more due to its higher openness, increasing production and investment costs. With subsidies, this ranking reverses, as greater openness generates more tariff revenue, supporting domestic investment. Our analysis suggests that tariff-jumping FDI will play an increasing role in a protectionist environment. Future research should explore export restrictions and digital trade barriers, which could further shape trade and FDI dynamics in the evolving global economy.

ABSTRACT. This paper analyzes the impact of the National Sword policy introduced by China in 2018 on its import flows, particularly on waste imports. Our analysis examines the heterogeneous impact of the policy across products, time, and exporters. We also explore other moderating factors, including income, environmental stringency, and geopolitics, that may have influenced the effectiveness of this policy.

To perform our analysis, we use CEPII BACI HS6 bilateral, product-level data from 1996 to 2022 for 213 exporters to China. We estimate a gravity model using Poisson-Pseudo Maximum Likelihood (PPML) with high-dimensional fixed effects. Our findings indicate that the National Sword policy reduced China’s imports in quantities by 115.0%, with banned products reduced by 219.6% and products subject to quality controls by 102.9%. The results also indicate a high degree of heterogeneity in the impact across income levels, exporters, and waste products addressed in the National Sword.

ABSTRACT. Acquisitions by firms from developing countries have soared in developed countries in the last 20 years. This period has seen the exponential rise of new major players (e.g., China, India, Russia, and other East Asian countries) in the outward foreign direct investment (OFDI) landscape, starting from the early 2000’s and surging in the last decade. This paper examines the impact of this current generation of acquirers from developing countries on the post-acquisition performance of target firms from developed countries during the period 2000-2019. This study uses difference-in-differences and propensity score matching to create a comparison group using acquisitions by developed countries of target firms from developed countries. This paper finds that compared to acquisitions by developed countries, acquisitions by developing countries do not have a favorable impact on the financial performance of target firms from developed countries. Specifically, there is a negative effect on the sales, profitability, assets, employment, and the return on assets of target firms from developed countries in the five-year post-acquisition period.

ABSTRACT. This paper investigates the impact of Chinese restrictions on export of REE on European Union trade.

ABSTRACT. This study investigates the impact of mega events and large-scale projects on economic diversification and sustainability in two Gulf Cooperation Council countries, namely Qatar and Saudi Arabia from 2000 to 2023. While these countries have emphasized the role of economic diversification as a crucial aspect to mitigate their dependence on hydrocarbons, the extent of their success in achieving this goal remains relatively unknown. This study employs advanced econometric methods, including a nonlinear Autoregressive Distributed Lag model and a time-varying Granger causality test, to analyze the impact of mega events on economic growth and diversification. We find that government expenditure positively affects GDP growth, especially after the announcement of mega events. Interestingly, this positive effect is more pronounced in the non-oil sector compared to the oil sector. Thus, our results demonstrate how these events affect a country’s diversification and sustainability efforts, ultimately reducing the reliance on oil and gas revenues. We also find that labor and capital accumulation play a more substantial role in fostering economic growth in the non-oil sector compared to the oil sector. Our results are of paramount importance to policymakers and stakeholders with several policy implications.

ABSTRACT. The weaponization of the justice system against political opponents, or "lawfare," is an increasingly prevalent strategy in modern governance, spanning both democracies and autocracies. This paper provides the first causal evidence of lawfare. Employing a regression discontinuity design, the study examines corruption convictions in Pakistan’s Anti-Corruption Courts. It reveals that opposition politicians who narrowly win elections face a significantly higher likelihood of being tried and convicted for corruption compared to their narrowly defeated counterparts. In contrast, government-aligned politicians who narrowly win elections are systematically less likely to face prosecution or conviction. The evidence reveals career incentives of judges as the key mechanism: judges who convict opposition politicians are more likely to receive promotions, underscoring the judiciary's susceptibility to political influence. Moreover, the prioritization of politically motivated cases crowds out legitimate corruption prosecutions, particularly those involving non-political actors. Overall, our study highlights how lawfare distorts judicial processes and undermines democratic accountability.

ABSTRACT. This paper explores the relationship between microfinance and economic development using a cross-country dataset of 60 developing countries from 2000-2018. We employ the Panel VAR model, estimated by the generalised method of moments (GMM). Microfinance institutions (MFIs) indicators are categorised into social and financial performance variables. Social performance variables include the number of clients served (NOB) and the percentage of women borrowers (PFB), while financial performance indicators consist of the portfolio at risk (PAR), operational self-sufficiency (OSS), and operating expenses (OPX). Economic development is assessed using the Human Development Index (HDI), which integrates economic indicators like Gross National Income per capita (GNI) with social indicators such as educational attainment (EDI) and life expectancy at birth (LE). We perform a Granger causality test confirming a Granger causal relationship between microfinance and economic development. Our findings indicate that shocks to social performance variables positively influence economic development, and shocks to financial performance variables significantly impact the human development index.

ABSTRACT. Many business entities still prioritize profits over environmental protection and perceive these two goals as inherently incompatible. Thus, this study examines the impact of environmentally oriented investments on the firms’ integration into global value chains (GVCs). Using firm-level data in 41 countries from the Business Environment and Enterprise Performance Survey (BEEPS), we show that firms could raise their opportunity to participate in GVCs by adopting environment protection actions through the mediation of productivity gains, yet the impact of adopting such actions on the intensity of GVC participation tends to be negligible. Likewise, larger firms are more likely to experience a raise of their chance to participate in international trade through environmental upgrading rather than their smaller counterparts. This finding is important since firms are increasingly being held accountable for their significant contribution in the environment degradation.

ABSTRACT. This paper examines the role of Foreign Direct Investment (FDI) in the decoupling of economic growth and emissions observed in France in recent decades. Despite increased production, domestic emissions have notably decreased, suggesting that offshoring through FDI may be a key driver of this paradox. Using sectoral FDI data over a 24-year period, we decompose France's CO2 emissions linked to FDI into scale, composition, and technique effects. Our main findings indicate that while the scale effect is substantial, it is partly offset by a composition effect, as FDI is increasingly directed towards regions with more lenient environmental regulations, such as Asia and Africa. In these regions, emissions are five and nine times higher, respectively, than the corresponding emissions from FDI directed towards France. Furthermore, we identify a technique effect, driven by the adoption of cleaner production technologies, which has contributed to a 40% reduction in French emissions. This effect has more than offset the scale effect, emerging as the primary explanation for the observed decline in emissions—well before the Paris Agreement came into force. Lastly, we demonstrate through a simple empirical model that environmental regulations significantly contribute to the materialization of these effects, underscoring the need for coordinated policies across countries to effectively address the climate crisis.

ABSTRACT. This paper tests the influence of environmental regulation (ER) on the location’s decision of Foreign Direct Investment (FDI). The study considers both cross border Mergers and Acquisition (M&A) and greenfield investments (GF) projects for a large sample of countries, sectors and years, using a structural gravity approach. We show that M&A and GF behave differently regarding ER. Stricter ER would encourage outward M&As while this policy discourages investors to realise GF projects abroad. We also test whether the impact of ER differs depending on the level of development of investors and investees as well as between dirty and clean sectors. Both M&As and GFs escape from high-income countries to middle-low income countries when high-income counties impose more stringent environmental policies in dirty sectors what partially confirm the pollution haven hypothesis (PHH). However, GF projects operating in clean sectors prefer to remain in countries with stricter ER (especially flows from high to high income countries) or to flow to countries with stricter ER (especially GFs from middle-low to middle-low income countries) while M&As in clean sectors are not affected by ER.