Migration and the location of MNE activities: Evidence from Italian provinces

We investigate the migration-inward foreign direct investment (FDI) nexus in narrow geographies. A novel two-stage empirical strategy allows us to investigate the role of migration as a determinant of multinational enterprises (MNEs) location choices and unpick heterogeneity in foreign investors' preferences towards the presence of migrants in the host location. This allows us to shed light on the relative importance of the underlying mechanisms linking migration and inward FDI. Relying on 1113 greenfield investments by 895 MNEs in Italian NUTS3 regions over 2003–2015, we find that immigrants from the country of origin of the investor exert a positive but highly heterogeneous effect on MNE location choices. Investors are more sensitive to the presence of migrants from their country of origin when they lack experience in the destination country (first-time investors) and when their investments concern market-access or business-services (downstream) activities. This is consistent with the view that migrants act as information brokers that bridge the fixed costs of international business activities.     

Electoral rule and public sector efficiency: Some evidence from Italian municipalities

We study the effect of Law 81/1993, which introduced a different rule for the election of mayors, on the technical efficiency of Italian cities over the period 1998–2006. Since 1993, municipalities below 15,000 inhabitants vote with a single-ballot system, whereas cities above 15,000 inhabitants are subject to a double ballot. We first estimate the output-oriented technical efficiency of municipalities through data envelopment analysis, and then we perform a regression discontinuity design analysis by exploiting the exogenous change in the electoral scheme at the 15,000 inhabitants cut-off. We find evidence that municipalities voting under a double-ballot rule show lower levels of efficiency—in terms of provision of public goods—compared with cities voting under a single-ballot scheme, by about 6.5%. This effect is driven by inefficiencies registered in specific sectors, that is, police, education, and maintenance of roads. Furthermore, the overall lower efficiency of municipalities voting under runoff is related to the different level of educational attainment of elected mayors, whereas it is not driven by the features of Law 81/1993 relating to the number of lists forming a coalition in support of mayoral candidates and to disjoint votes.