V. Leone Sciabolazza (2020), Bargaining within the European Council: An empirical study on the allocation of funds of the European budget.

Little is known about the bargaining process of the European Council, because negotiations of member countries occur behind closed doors. Using a brand-new dataset, we analyze the factors leading a country to a successful negotiation over one of the most important decisions taken by the Council every year, that for the allocation of the European budget. Important predictors of a country’s bargaining success, proxied by the quota of EU budget received, are the extent to which its votes are pivotal to form a winning coalition in the Council, its seniority, the control over the Council presidency office, and the political orientation of its government on the EU integration process. We also provide new evidence that countries advancing a similar policy agenda may benefit from each other’s effort. Finally, we demonstrate that the reform of the Council introduced by the treaty of Niece had no significant impact on the bargaining process and the balance of power among member countries.

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V. Costantini, V. Leone Sciabolazza, E. Paglialunga (2020), Network-driven positive externalities in clean energy technology production: The case of energy efficiency in the EU residential sector.

In this paper, we propose a model of national innovation production that formalizes the role of trade partnerships as a channel of knowledge spillovers across countries. The model is used to investigate the energy efficiency technological domain in the European Union (EU) using a panel database covering 19 EU countries for the time span 1990-2015. The model is estimated by using a new empirical strategy which allow to assess the knowledge spillover effects benefiting a country depending on its relative position in the trade network, and correct for common endogeneity concerns. We show that being central in the trade network is a significant determinant of a country’s innovative performance, and that learning-by-exporting is responsible for positive knowledge spillovers across countries. We further reveal that neglecting network effects may significantly reduce our understanding of domestic innovation patterns. Finally, we find that the benefits obtained from knowledge diffusion varies with the domestic absorptive capacity and policy mix composition. Our main implication is that policy mix design informed by network-based case studies could help maximizing the exploitation of positive knowledge spillovers.

M. Di Maio, V. Leone Sciabolazza (2020), Conflict exposure and health: Evidence from the Gaza Strip, HiCN Working Paper 340, November 2020.

Using individual-level longitudinal data and geo-localized information on conflict-related violent events, we study the impact of conflict on health in the Gaza Strip. Results show that individuals living in localities exposed to more conflict events have a higher probability of suffering from a physical impairment and a chronic disease. The effect is larger for men and older individuals. Two mechanisms contribute to explain why living in conflict-affected area increases the incidence of physical impairment: conflict increases the difficulty to reach health facilities and it decreases individual income. The conflict-induced increase in the probability of having high blood pressure is instead consistent with the development of Post-Traumatic Stress Disorder (PTSD) due to the exposure to conflict-related violent events.

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M. Battaglini, V. Leone Sciabolazza, E. Patacchini (2020), Abstentions and Social Networks in Congress, NBER Working Paper 27822

We study the extent to which personal connections among legislators influence abstentions in the U.S. Congress. Our analysis is conducted by observing representatives’ abstention for the universe of roll call votes held on bills in the 109th-113th Congresses. Our results show that a legislator’s propensity to abstain increases when the majority of his or her alumni connections abstains, even after controlling for other well-known predictors of abstention choices and a vast set of fixed effects. We further reveal that a legislator is more prone to abstain than to take sides when the demands from personal connections conflict with those of the legislator’s party.

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Michele Di Maio , Valerio Leone Sciabolazza , Vasco Molini (2019), “Migration in Libya: a spatial network analysis. ” World Bank, Policy Research Working Paper 9110.

This paper provides the first systematic analysis of migration to, within, and from Libya. The data used in the analysis are from the Displacement Tracking Matrix data set of the International Organization for Migration. The analysis uses this unique source of data, combining several techniques to analyze various dimensions of migration in Libya. First, the paper provides a detailed description of the demographic characteristics and national composition of the migrant populations in Libya. Next, it discusses the determinants of migration flow within Libya. The findings show that migration in Libya can be characterized as forced migration, because conflict intensity is the main determinant of the decision to relocate across provinces. Finally, the paper describes the direction, composition, and evolution of international migration flows passing through Libya and identifies the mechanisms of location selection by migrants within Libya by identifying hotspots and cluster provinces.

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R. Cerqueti, L. De Benedictis, V. Leone Sciabolazza, Segregation with Social Linkages: Evaluating Schelling’s Model with Networked Individuals, Working paper, arXiv:2001.02959

This paper generalizes the original Schelling (1969, 1971a,b, 2006) model of racial and residential segregation to a context of variable externalities due to social linkages. In a setting in which individuals’ utility function is a convex combination of a heuristic function à la Schelling, of the distance to friends, and of the cost of moving, the prediction of the original model gets attenuated: the segregation equilibria are not the unique solutions. While the cost of distance has a monotonic pro-status-quo effect, equivalent to that of models of migration and gravity models, if friends and neighbours are formed following independent processes the location of friends in space generates an externality that reinforces the initial configuration if the distance to friends is minimal, and if the degree of each agent is high. The effect on segregation equilibria crucially depends on the role played by network externalities.

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M. Battaglini, Leone Sciabolazza V., Patacchini E. (2020), Effectiveness of connected legislators, American Journal of Political Science, 64(4), 739-756 [lead article]

In this paper, we study the extent to which social connections influence the legislative effectiveness of members of the U.S. Congress. We propose a simple model of legislative effectiveness that formalizes the role of social connections and generates simple testable predictions. The model predicts that a legislator’s equilibrium effectiveness is proportional to a specific weighted Katz-Bonacich centrality in the network of social connections, where the weights depend on the legislators’ characteristics. We then propose a new empirical strategy to test the theoretical predictions using the network of cosponsorship links in the 109th-113th Congresses. The strategy addresses network endogeneity by implementing a two-step Heckman correction based on an original instrument: the legislators’ alumni connections. We find that, in the absence of a correction, all measures of centrality in the cosponsorship network are significant. When we control for network endogeneity, however, only the measure suggested by the model remains significant, and the fit of the estimation is improved. We also study the influence of legislators’ characteristics on the size of network effects. In doing so, we provide new insights into how social connectedness interacts with factors such as seniority, partisanship and legislative leadership in determining legislators’ effectiveness.

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M. Battaglini, V. Leone Sciabolazza, E. Patacchini, S. Peng (2018), An R Package for the Estimation of Parameter-Dependent Network Centrality Measures [R&R]

The R package econet provides methods for estimating parameter-dependent network centrality measures with linear-in-means models. Both nonlinear least squares and maximum likelihood estimators are implemented. The methods allow for both link and node heterogeneity in network effects, endogenous network formation and the presence of unconnected nodes. The routines also compare the explanatory power of parameter-dependent network centrality measures with those of standard measures of network centrality. Benefits and features of the econet package are illustrated using data from Battaglini and Patacchini (2018), which examine the determinants of US campaign contributions when legislators care about the behavior of other legislators to whom they are socially connected.

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Abdel-Baki M., V. Leone Sciabolazza (2014), A consensus-based corporate governance paradigm for Islamic banks, Qualitative Research in Financial Markets, 6 (1), pp. 93-108

Purpose – Islamic banking is a viable sustainable banking model that has shown resilience to financial crises. The aim of this research is to design a consensus-based ethical and market-driven corporate governance index (CGI) to boost financial performance and ensure compliance with Islamic rulings.
Design/methodology/approach – The design of the CGI is the outcome of the feedback obtained from a cross-country survey to measure bank efforts in enhancing corporate governance (CG) throughout the ten-year period of 2001-2011. The CGI is divided into six core CG themes and 40 sub-themes.
Findings – First, the results of the multiple regression analysis show a consistent positive relationship between CG and financial performance metrics. Second, the authors detect misaligned compensation structures for directors. Third, poor governance leads to higher risk exposures.
Research limitations/implications – CG in Islamic banks is yet an evolving discipline and infant practice. This research aims to introduce a CGI that should be updated and improved as the discipline evolves.
Practical implications – The research concludes by proposing a CG paradigm. The outcome of the research could also be of use to both Islamic banks and to the rapidly growing sustainable banking sector in designing a similar CGI and CG model incorporating the ethical features of sustainable finance.
Social implications – The core ethos of Islam are: avoiding the exploitation of the needy, avoiding excessively risky transactions, avoiding unethical transactions and justice, equity and income redistribution. If properly applied, Islamic banking will display all features of sustainable finance as well as enhance social welfare.
Originality/value – To the best of the authors’ knowledge, this is the first CGI that is based on an ethical and all-inclusive input of all stakeholders.

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