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CHIARA FUMAGALLI

Work in progress

Working Papers

Insurance Between Firms: The Role of Internal Labor Markets (with G. Cestone, F. Kramarz and G. Pica)

CEPR Discussion Paper No. 11336

ABSTRACT: We explore how business groups use internal labor markets (ILMs) in response to changing economic conditions. We show that group-affiliated units faced with positive shocks to growth opportunities gain market share relying on their ILM to ensure swift hiring, especially of technical managers and skilled blue collar workers. A closer access to the group's human capital facilitates employee relocations in order to fully exploit growth opportunities.Adverse shocks affecting one unit in the organization increase workers' mobility to other units in the group rather than to external firms, with stricter employment protection causing an additional increase in internal mobility. Overall, ILMs provide an insurance mechanism between firms in a group, allowing such organizations to bypass hiring and firing frictions; they provide job stability to employees as a by-product.orkers' mobility to other units rather than external firms, with stricter employment protection causing an additional increase in internal mobility. ILMs emerge as a co-insurance mechanism, allowing organizations to bypass fi ring and hiring frictions and providing job stability to employees as a by-product.

REvisED AND RESUBMITTED TO THE rESTUD. Find here the SLIDES of the LATEST VERSION OF THE PAPER.

Dymanic vertical foreclosure (with M. Motta). NEW VERSION!

IGIER Working Paper No. 640

ABSTRACT: This paper shows that vertical foreclosure can have a dynamic rationale. By refusing to supply an eFFIcient downstream rival, a vertically integrated incumbent sacri FIces current pro FIts but can exclude the rival by depriving it of the critical proFI ts it needs to be successful. In turn, monopolising the downstream market may prevent the incumbent from losing most of its future proFI ts because: (a) it allows the incumbent to extract more rents from an eFFIcient upstream rival if future upstream entry cannot be discouraged; or (b) it also deters future upstream entry by weakening competition for the input and reducing the post-entry proFI ts of the prospective upstream competitor.

REVISED AND RESUBMITTED TO THE jOURNAL OF lAW AND eCONOMICS.

 

Work in Progress

Export shocks and input quality adjustments. Which margin do firms use most? (with R. Crinò and G. Pica), mimeo, 2018.

 

SHELVING OR DEVELOPING? ACQUISITION OF POTENTIAL COMPETITORS.  (with M. Motta and E. Tarantino), mimeo, 2019.

 

Last change 06/02/2020