Research activities

Principal Investigator (Scuola Superiore Sant’Anna): Daniele Moschella

Local Unit Coordinator (University of Pisa): Chiara Franco

Local Unit Coordinator (University of Parma): Gianluca Capone

The emergence of new technologies enabling automation and digitalization represents a fundamental technological shift, which can mark profound transformations in socio-economic systems. At the same time, the growing pace of globalization in the form of wider and longer global value chains is also likely to affect the organization and the distribution of the production processes across firms and countries. Both processes entail threats and opportunities for workers, firms and countries. On the one hand, increasing automation could speed up the process of polarization in the labour market and concentration in firms market shares. On the other hand, the interaction of automation and internationalization could open up new opportunities for firms and countries within the worldwide organization of the production processes. The recent COVID-19 pandemic recession has made even clearer that the evolution of technological knowledge together with obstacles to trade are likely to generate winners as well as losers between and within countries.

The project will look at some of these threats and opportunities starting from the working hypothesis of the mutual interaction between the generation of new technological knowledge and activities of the firms carried out on a global scale. In this respect, the new frontier of research has not yet explored all the implications of the connections between the two. We will start from the general conjecture that the technologies underpinning the “factory of the future” as profiled by the Industry 4.0 paradigm, i.e. Internet of Things, big data, cloud, robotics, artificial intelligence, and additive manufacturing, have the potential to deeply transform the economy. We will have a fresh look at the main actors involved in the production and diffusion of these technologies, and their consequences for workers and firms in terms of wage structure, innovation propensity and participation in international markets.

Automation technologies can be sourced both domestically and in foreign markets, through imports, and they can possibly diffuse across sectors through backward or forward linkages. This may impact on innovation activities as well as on products quality, thus enhancing the international competitiveness of firms and countries. Being exposed to trade also implies being in competition especially with low wage countries: this may further stimulate automation adoption as a way to increase productivity.

Finally, the diffusion of automation across backward and forward sectors will offer new opportunities for changes in the international organization of production. In some cases, it might force an upgrading process on subcontractors. The specific form of upgrading that firms in the global value chains pursue will depend on how this specific technological window of opportunity interacts with opportunities emerging in the demand and institutional domains, as well as the specific governance form of the network.

Principal Investigator (Cattolica University of Milan): Daniela Maggioni

Local Unit Coordinator (University of Pisa): Claudio Fassio

Local Unit Coordinator (Sapienza University of Rome): Michele Imbruno

Other researchers involved:

• Davide Castellani (University of Perugia and Henley Business School, University of Reading)
• Maria Luisa Mancusi (Cattolica University of Milan)
• Filippo Reganati (Sapienza University of Rome)

Decarbonising the economy is a challenging target that calls for the efforts of all actors in the economic system. Among them, multinational enterprises (MNEs) are expected to make an important contribution due to their economic relevance and the global scope of their activities. The purpose of this project is to advance knowledge and provide new micro level evidence on the role of MNEs for the green transition of host economies.

We will study how MNEs can support local firms and territories in their efforts to pursue a green pathway, by pointing, at the same time, at potential risks they can bring. Existing literature has explored MNEs green/carbon footprint as well as their environmental performance, but an in-depth analysis of mechanisms and channels through which they affect the greening of host economies is missing. We attempt to fill this gap in three directions. First, we will explore whether MNEs transfer new and relevant green knowledge locally. More specifically, we will provide empirical evidence on the following main dimensions of green knowledge: human capital, diffusion of foreign technologies, and transfer of production capabilities. These channels are not new in the literature, but their importance for the green transition process has been neglected.

Second, we will explore whether MNEs can help host economies to cope with challenging environmental policies. In this respect, we will provide evidence on the case of the EU-Emission Trading Scheme (ETS). The presence of foreign-owned firms can affect the performance and the behaviour of firms under ETS, and therefore, the effectiveness of this scheme.

Third, we will acknowledge the possible “dark” side of MNEs. Due to their strategic location decisions, MNEs can affect the pollution content of host countries’ production, especially in some developing territories. We will provide region and individual level evidence on the health consequences associated with the environmental impact of MNEs’ economic activity.

For the project implementation, we will use different micro level databases providing information on the product basket, employment composition and mobility, knowledge, emissions and environmental performance of MNEs acting in different economic contexts. This will lead to a further contribution of the project as we will offer a comparative view for countries with different levels of economic development and environmental performance, namely Italy, Sweden and Turkey. Such a comparative analysis is essential to assess whether, and to what extent, benefits – and also risks – of MNEs for green transition change across different host economies.

Given the current geopolitical and economic uncertainty that can slow down the decarbonisation of the economy, we believe that shedding light on the role of MNEs is crucial for both the economic growth and environment.