Papers by Massimiliano Vatiero
Already Joseph Schumpeter recognised the importance of finance and corporate governance in stimul... more Already Joseph Schumpeter recognised the importance of finance and corporate governance in stimulating innovation. Today the changing nature of competition and the increasing pressure of globalization market make innovation the most crucial determinants of the corporate value, of competitive advantage of firms and nations, and of economic growth. The implicit consequence is that the features of corporate governance may stimulate innovation, and thus growth. In this paper, we investigate whether the characteristics of the relationships between controlling corporate agent (blockholders and or managers) and minority shareholders affects the extent of innovation in an economy—indeed, following the Grossman-Hart-Moore model (e.g. Hart 1995), ownership is a means to stimulate investments. Using data on patents (and citations) and on corporate structure of Swiss corporations, we analyze this role of the corporate ownership.
SSRN Electronic Journal, 2017
Both theoretical and empirical studies provide mixed predictions when looking at the impact of co... more Both theoretical and empirical studies provide mixed predictions when looking at the impact of corporate ownership on innovation. Contributing to this discussion, this paper conducts a causality test of the relation between the ownership concentration of firms and their innovation, measured by patents and patent citations. Using a sample that contains annual data of about 150 companies over the 1990-2010 period, we address potential endogeneity concerns using the introduction of the Swiss takeover law as an instrumental variable. In line with the “hold-up” view, we find higher ownership concentration leading to more firm innovation.
- Both relational and positional goods are based upon an idea of joint consumption – thought with... more - Both relational and positional goods are based upon an idea of joint consumption – thought with opposite signs. In both cases, agents are not self‐regarded, but their consumption choices are other‐regarded. Moreover, relational good lies on identity of its consumers. It implies a certain degree of positionality within the consumption of relational goods. Analogously, except for two‐agent context, each positional good has a relational component. What emerges is a complex structure of economic outcomes based on both relational and positional motives. Jel Code: D11, K00 Keywords: Relational Good, Positional Good. Luca Fiorito e professore associato di Storia del Pensiero Economico, Universita di Palermo. Massimiliano Vatiero e professore assistente di Law and Economics e titolare di cattedra “Brenno Galli” in Analisi Economica del Diritto, Universita della Svizzera Italiana, Lugano. Gli autori ringraziano Stefano Bartolini e Ugo Pagano per gli utili suggerimenti. Ogni errore e da att...
SSRN Electronic Journal, 2018
Despite the prolific literature on transaction costs, the concept of transaction still wants for ... more Despite the prolific literature on transaction costs, the concept of transaction still wants for a definition. This theoretical essay explains and recombines different-but closely related-dimensions of the transactional phenomenon (legal, competitive and political dimensions of a transaction) in order to identify promising avenues for future research.
Academy of Management Proceedings, 2021
The hierarchical nature of the firm affects stakeholders’ well-being. This is our main motivation... more The hierarchical nature of the firm affects stakeholders’ well-being. This is our main motivation in analysing the firm through the perspective of Sen’s capability approach—a social justice theory ...
Incumbents' winback actions recently received a growing antitrust scrutiny in network industr... more Incumbents' winback actions recently received a growing antitrust scrutiny in network industries. These actions refer to incumbents’ strategies aimed at regaining, through targeted marketing and selective discounts, former customers who switched to a new entrant. We analyze the impact of winback actions on competition and discuss pros and cons of a temporarily ban on incumbent's side, through the so-called 'winback rules'. JEL: D43, K21, L41, L43.
Come Darwin ha spiegato la diversita delle specie di iguane e tartarughe giganti nelle isole Gala... more Come Darwin ha spiegato la diversita delle specie di iguane e tartarughe giganti nelle isole Galapagos, cosi il Darwinismo puo spiegare la diversita delle «specie» di "corporate governance" presenti nelle economie industrializzate. Le specie di "corporate governance" sono conseguenza ereditaria di un adattamento al contesto politico-istituzionale. Questo comporta che, a differenza di quanto prospettato dalla c.d. "Legal Origin Theory" (per cui si ha/avra necessariamente una convergenza verso un modello efficiente o ideale), le differenti conformazioni di "corporate governance" hanno persistito e persisteranno (o meno!) a dipendenza delle istituzioni politiche che dominano l'ambiente di riferimento. Il saggio inoltre cerca di leggere con tali lenti «biologiche» il dibattito in corso sugli assetti di governo delle grandi banche popolari italiane.
Encyclopedia of Law and Economics, 2017
People consume because others consume, maintained Veblen in 1899. More recently, theoretical, emp... more People consume because others consume, maintained Veblen in 1899. More recently, theoretical, empirical and experimental articles have argued that people constantly compare themselves to their environments and care greatly about their relative positions. Given that competition for positions may produce social costs, we adopt a Law and Economics approach (i) to suggest legal remedies for positional competition, and (ii) to argue that, because legal relations are characterized in turn by positional characteristics, such legal remedies do not represent 'free lunches'.
SSRN Electronic Journal, 2021
This work discusses and empirically investigates the relationship between labor regulation and ro... more This work discusses and empirically investigates the relationship between labor regulation and robotization. In particular, the empirical analysis focuses on the relationship between the discipline of workers' dismissal and the adoption of industrial robots in nineteen Western countries over the 2006-2016 period. We find that high levels of statutory employment protection have been negatively associated with robot adoption, suggesting that labor-friendly national legislations, by increasing adjustment costs (such as firing costs), and thus making investment riskier, provide less favorable environments for firms to invest in industrial robots. We also find, however, that the correlation is positively mediated by the sectoral levels of capital intensity, a hint that firms do resort to industrial robots as potential substitutes for workers to reduce employees' bargaining power and to limit their hold-up opportunities, which tend to be larger in sectors characterized by high levels of operating leverage.
SSRN Electronic Journal, 2020
This paper summarizes and critically reviews the limited and fragmented empirical literature on t... more This paper summarizes and critically reviews the limited and fragmented empirical literature on the relationship between the judicial efficiency and the economic transactions. Finally, we identify some promising avenues for future research.
This note is an attempt to offer a somewhat more comprehensive assessment of Patten’s views on in... more This note is an attempt to offer a somewhat more comprehensive assessment of Patten’s views on individual rights, poverty and social efficiency, as well his ideas on eugenics, biological determinism, and immigration. This will allow us to better delineate the differences—as well as the affinities—between Patten and the core of progressives recently discussed by Thomas C. Leonard in his acclaimed Illiberal Reformers. It is our contention that even within the persisting intricacies, ambiguities and contradictions of Patten’s expository style it is possible to trace a shift in some aspects of his ideas—a gradual evolution which makes his peculiar brand of progressivism different from that of his most “illiberal” counterparts.
Institutions and Evolution of Capitalism, 2019
As Hodgson has nicely pointed out, capitalism can be only understood if we accept that, unlike po... more As Hodgson has nicely pointed out, capitalism can be only understood if we accept that, unlike possession, property is a social construction and a relation among individuals. Unlike possession, property does not require a material thing on which it should be applied. Property rights can create fictitious commodities on intangible assets symbolizing the relationships among persons. The commoditization of knowledge and the emergence of contemporary intellectual monopoly capitalism must be understood in this framework. Knowledge is a non-rival good and its possession by others is not incompatible. Since we can all possess the same piece of knowledge, the so-called knowledge economy is often seen as place where capitalist relations should weaken. However this view confuses property with possession. In modern societies, intellectual property is becoming the most important part of capital. In spite of the non-rival possession of knowledge, intellectual property rights can be defined as the exclusive right to a piece of knowledge involving the corresponding restriction of others' liberties to use it. Modern intellectual monopoly capitalism is built on sophisticated property rights that should be not confused with any sort of primitive possession. As Geoff Hodgson (2015a has observed, economists have often confused possession with property. Possession is a relationship between an individual and an object. It entails that a person has access to that object and uses it to satisfy his or her needs. Animals can possess things, and for long periods possession may be unchallenged by rivals if each animal devotes more energy to defense of its territory than to invasion of the territories of the other animals. Property is a relation among individuals. It entails that third parties impose corresponding duties not to interfere with others' property rights. Third parties have the power to enforce property rights. Property rights require elementary community enforcement and can assume complex forms in sophisticated legal systems. They cannot evolve from a struggle among individuals, characterized by hawkish behavior, defending their possessions and its nature is completely different. The proverb "possession is the nine-tenths of the law" is fundamentally wrong 1 . As Rose (2015 p. 62) maintains, "if de facto possession is nine-tenths of the law, we know that in effect, there is no law. There are probably not even social norms that would define property informally". Hodgson (2015c) has aptly pointed out that capitalism can only be understood if we accept that, unlike possession, property is a social construct and a relation among individuals. Unlike possession, property does not require a material thing to which it should be applied. Property rights can create fictitious commodities 2 that are intangible assets characterizing the relationships among persons. Unlike ordinary commodities these fictitious commodities do not have a substance, independent of property rights, over which exclusive possession could be exercised. The commoditization of knowledge and the emergence of contemporary capitalism, based on intellectual monopoly (Pagano 2014b) can only be understood within this framework. Knowledge is a non-rival good. Its possession by others is not incompatible with our possession. Since we can all possess the same piece of knowledge, the so-called knowledge economy is often seen as a 1 Possession can signal the existence of property rights but it should not be confused with them (Arunada, 2015). 2 The use of the term fictitious commodities is somehow related to (but different from) the meaning that it has in . Polanyi means by the term "fictitious" the fact that these commodities are not produced for the market (even if they are treated as they were). Hodgson (2016) observes that Polanyi contradicts often this definition. However, this may be due to the fact that Polanyi operates at meta-theoretical level (Zaman (2016). According to theories, which may vary across classes, are often wrong but nevertheless they shape history and they are an important part of reality.
SSRN Electronic Journal, 2019
In their 1932 volume American Business Leaders: A Study in Social Origins and Social Stratificati... more In their 1932 volume American Business Leaders: A Study in Social Origins and Social Stratification, Frank W. Taussig and Carl S Joslyn, then a young Harvard graduate, argued that success in business depended more on innate superiority than on other environmental factors such as financial aid, influential connections, and formal education. The aim of this paper is to analyze the main contentions of Taussig and Joslyn, as well the intellectual genesis of, and the general reactions to, this controversial volume. Although our main focus is on Taussig and Joslyn, other figures, all directly affiliated with Harvard, will play a decisive role in our narrative-the economist Thomas Nixon Carver, the psychologist William McDougall, and the sociologist Pitirim Aleksandrovič Sorokin. This makes the scope of this paper in many respects broader than its title may suggest-in the sense that it will allow us to place a work like American Business Leaders within the context of an important strand of social science research at Harvard during the interwar years.
SSRN Electronic Journal, 2018
SSRN Electronic Journal, 2015
Although economies, business practices, and living standards have converged since WWII, corporate... more Although economies, business practices, and living standards have converged since WWII, corporate structures continue to differ among the advanced economies of the world. Looking at the diversity of corporate structures of large-sized firms around the world (and over time) would fascinate Charles Darwin. This work develops a critical review of the literature on political determinants of corporate governance through the Darwinian theory (including some Lamarckian aspects). As Darwin, in his work On the Origin of Species, explicates the diversity of species of tortoises, finches, and iguanas of the Galapagos Islands, so Darwinism may contribute in understanding the origin and the persistence of corporate diversity. In particular, this article takes into account politics-driven variations, their inheritances, and the subsequent selection of advantageous 'corporate' attributes.
Rivista Critica Del Diritto Privato, 2013
Italian Abstract: Le “specie” di corporate governance sono conseguenza di un adattamento al conte... more Italian Abstract: Le “specie” di corporate governance sono conseguenza di un adattamento al contesto politico-istituzionale. Pertanto, a differenza di quanto prospettato dalla cd. Legal Origin Theory (per cui si ha/avra necessariamente una convergenza verso un modello efficiente o ideale), le differenti conformazioni di corporate governance hanno persistito e persisteranno (o meno!) a dipendenza delle istituzioni politiche che dominano l’ambiente di riferimento. Il saggio inoltre cerca di leggere con tali lenti “biologiche” il dibattito in corso sugli assetti di governo delle grandi banche popolari italiane.English Abstract: The “species” of corporate governance are the result of an adaptive evolution to the political environment. Contrary to what Legal Origin Theory advances (i.e., a convergence towards to an efficient model), we affirm that the diversity of corporate governance regimes depends on different political institutions which dominate economic contexts. This work, moreover, offers a reassessment with such biological lens of the recent Italian debate on the governance of cooperative banks and mutual organizations.
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Papers by Massimiliano Vatiero