Green Public Procurement v.s. Environmental Taxation: implications for EU-MENA environmental policyJournal articleVera Danilina et Federico Trionfetti, FEMISE MED brief, Issue 16, 2019

Environmental policies are among the priorities of the UN agenda and figure highly in national and international policy agendas. This brief focuses on environ-mental taxes and green public procurement (GPP). These two environmental po-licy instruments differ in political viability and in the impact they have on consu-mers and producers. The brief provides a comparative analysis of their efficiency in closed and open economy and reveals the opportunities and threats of (un)harmo-nised environmental policy across countries. The results allow to consider particu-lar implications for the collaboration of EU-MENA countries.

Firm heterogeneity, comparative advantage and the transfer problemJournal articleFederico Trionfetti, European Economic Review, Volume 108, Issue C, pp. 246-258, 2018

This paper studies the transfer problem in a model featuring comparative advantage, monopolistic competition, trade costs, and firm heterogeneity in factor intensity. The results are very different from those of the previous literature. First, a transfer creates a secondary burden in situations where the neoclassical version of the Heckscher–Ohlin model would not. Second, a transfer affects wage inequality. Third, a transfer is not neutral to world welfare. Fourth, floating exchange rates do not substitute for deflation. Fifth, a simulation exercise shows that the quantitative effects of trade imbalances are comparable in magnitude to those arising from major trade agreements.

Public Debt and Economic GeographyJournal articleFederico Trionfetti, International Regional Science Review, Volume 38, Issue 1, pp. 92-113, 2015

This article studies the consequences of debt policies on the spatial distribution of output in a two-country model. It departs from the usual setup of local public finance by relaxing the assumption of balanced budget. Further, to single out the pure effect of debt, the article eliminates effects coming from tax and expenditure policies by assuming them exogenous and identical between countries except for the timing of taxation. Expected taxation rather than current tax levels motivates migration. Starting from an initial spatial configuration, be it Core-Periphery or symmetric equilibrium, the analysis identifies the critical thresholds of divergence or convergence of debt ratios which break the initial configuration. The article also shows that a high-debt country or a fast debt reducing country is a weaker player in the tax competition game. Finally, tax harmonization does not necessarily reduce migration flows.

Firm-level comparative advantageJournal articleMatthieu Crozet et Federico Trionfetti, Journal of International Economics, Volume 91, Issue 2, pp. 321-328, 2013

We study the consequences of heterogeneity in factor intensity on firm performance. We present a standard Heckscher–Ohlin model augmented with factor intensity differences across firms within a country–industry pair. We show that for any two firms, each of whose capital intensity is, for instance, one percent above (below) its respective country–industry average, the relative marginal cost of the firm in the capital-intensive industry of the capital-abundant country is lower (higher) than that of the other firm. Our empirical analysis, conducted using data for a large panel of European firms, supports this prediction. These results provide a novel approach to the verification of the Heckscher–Ohlin theory and new evidence on its validity.

Productivity, Networks, and Export Performance: Evidence from a Cross-country Firm DatasetJournal articleLuca Antonio Ricci et Federico Trionfetti, Review of International Economics, Volume 20, Issue 3, pp. 552-562, 2012

This paper uses a newly assembled multi-country multi-industry fi rm-level dataset to test the effect of productivity and networking on the export probability of firms. Results are in line with the new-new trade theory and with the literature on the information value of networks. Firms are more likely to export if they are more productive, larger, and if they bene fit from foreign networks (ownership and financial linkages), domestic networks (chamber of commerce, links to regulation), and communication networks (E-mail, internet). Firms bear a lower probability of exporting if they have state or labor networks. Overall, firms with better network connections by one standard deviation enjoy a 15% higher probability of exporting.

How wages and employment adjust to trade liberalization: Quasi-experimental evidence from AustriaJournal articleMarius Brülhart, Céline Carrère et Federico Trionfetti, Journal of International Economics, Volume 86, Issue 1, pp. 68-81, 2012

We study the response of regional employment and nominal wages to trade liberalization, exploiting the natural experiment provided by the opening of Central and Eastern European markets after the fall of the Iron Curtain in 1990. Using data for Austrian municipalities, we examine differential pre- and post-1990 wage and employment growth rates between regions bordering the formerly communist economies and interior regions. If the 'border regions' are defined narrowly, within a band of less than 50km, we can identify statistically significant liberalization effects on both employment and wages. While wages responded earlier than employment, the employment effect over the entire adjustment period is estimated to be around three times as large as the wage effect. The implied slope of the regional labor supply curve can be replicated in an economic geography model that features obstacles to labor migration due to immobile housing and to heterogeneous locational preferences.

National oligopolies and economic geographyJournal articleBarbara Annicchiarico, Federica Orioli et Federico Trionfetti, Annals of Regional Science, Volume 48, Issue 1, pp. 71-99, 2012

We replace monopolistic competition with national oligopolies in a model of "new economic geography". There are many possible bifurcation diagrams but, unlike in monopolistic competition, the symmetric equilibrium is always stable for low trade costs. The antitrust policy, though identical in both countries, affects the geographical distribution of firms. In turn, migration attenuates the effectiveness of the antitrust policy in eliminating collusive behavior. For high trade costs a toughening of the antitrust policy is likely to result in more agglomeration and may reduce world welfare. The antitrust policy is more likely to be welfare improving when market integration progresses.

A test of trade theories when expenditure is home biasedJournal articleFederico Trionfetti et Marius Brülhart, European Economic Review, Volume 53, Issue 7, pp. 830-845, 2009

We develop a criterion to distinguish two dominant paradigms of international trade theory: homogeneous-goods perfectly competitive models, and differentiated-goods monopolistically competitive models. Our analysis makes use of the pervasive presence of home-biased expenditure. It predicts that countries' relative output and their relative home biases are positively correlated in differentiated-goods sectors (the "home-bias effect"), while no such relationship exists in homogeneous-goods sectors. This discriminating criterion turns out to be robust to a number of generalisations of the baseline model. Our empirical results, based on a world-wide cross-country data set, suggest that the differentiated-goods model fits particularly well for the machinery, precision engineering and transport equipment industries, which account for some 40% of sample manufacturing output.

Trade costs and the Home Market EffectJournal articleFederico Trionfetti et Matthieu Crozet, Journal of International Economics, Volume 76, Issue 2, pp. 309-321, 2008

Most of the theoretical and empirical studies on the Home Market Effect (HME) assume the existence of an "outside good" that absorbs all trade imbalances and equalizes wages. We study the consequences on the HME of removing this assumption. The HME is attenuated and, more interestingly, it becomes non-linear. The non-linearity implies that the HME is more important for very large and very small countries than for medium size countries. The empirical investigation conducted on a database comprising 25 industries, 25 countries, and 7 years confirms the presence of the HME and of its non-linear shape.

ForewordJournal articleValérie Mignon et Federico Trionfetti, Economie Internationale, Issue 105, pp. 5-5, 2006