PERSISTENCE OF POLITICIANS AND FIRMS' INNOVATION

We empirically investigate whether the persistence of politicians in political institutions affects the innovation activity of firms. We use 12,000 firm‐level observations from three waves of the Italian Observatory over Small and Medium Enterprises, and introduce a measure of political persistence defined as the average length of individual political careers in political institutions of Italian municipalities. Using death of politicians as an exogenous source of variation of political persistence, we find a robust negative relation between political persistence and the probability of process innovation. This finding is consistent with the view that political stability may hinder firms' incentive to innovate to maintain their competitiveness, as long as they can extract rents from long‐term connections with politicians. (JEL D22, D72, O31)     

International mobility of professional knowledge from the Global South: Indian IT workers in the Netherlands

Although there are many studies on both expatriates and the phenomenon of brain drain, there are few on those professionals who move from a less to a more advanced economy through a transfer from one division of a transnational corporation to another. In a study of Indian IT professionals employed by the Dutch division of the producer‐service company Capgemini, we assessed the reasons for their recruitment and the type of professional knowledge they bring to the job. Our main findings are that the international mobility of Indian professionals is not just a matter of reducing labour costs and that, though some Indian IT professionals engage in routine programming activities, others are involved in activities that require tacit forms of knowledge. This applies to those who link the Dutch and Indian offices of Capgemini and to those who acquire assignments operating in the epistemic community of the international business milieu.     

PEER EFFECTS IN HIGHER EDUCATION: DOES THE FIELD OF STUDY MATTER?

Does the peer effect vary with the field of study? Using data from a middle‐sized public university located in southern Italy and exploiting the random assignment of first‐year students to college accommodation, we find that roommate peer effects for freshmen enrolled in the hard sciences are positive and significantly larger than for freshmen enrolled in the humanities and social sciences. We present a simple theoretical model which suggests that the uncovered differences between fields in the size of the peer effect could plausibly be generated by between‐field variation in labor market returns, which affect optimal student effort. (JEL I21, Z13, J24)