Religious Identity, Safeguards, and Hold-Ups in Human Capital Transmission

This paper explores how religion shapes the use of contractual safeguards and the incidence of hold-up problems in master-apprentice arrangements. Using more than 50,000 apprenticeship contracts registered in Venice between 1575 and 1775, I show that masters with a strong religious identity were significantly less likely to demand third-party guarantors, front-load the costs of training, and defer payment. I measure religious identity using the religious content of masters’ given names and exploit differential pre-birth earthquake exposure as a source of exogenous variation. Evidence from apparitions of the Virgin Mary, a regression discontinuity around Pentecost, and heterogeneity analyses points to three complementary mechanisms: beliefs in supernatural monitoring, religious norms, and religious parochialism. Despite being more exposed to apprentice hold-up, however, religious masters did not experience higher rates of early exits. These findings show that religion can substitute for formal contractual safeguards in the transmission of human capital.

The Agrarian Origins of Organizational Normative Deviance (with Xose H. Vazquez)

This paper develops and empirically tests a theory that links organizations’ normative deviance to countries’ agrarian origins. Specifically, we posit that two factors influence this relationship. First, how individual property rights were defined in traditional agrarian systems due to transaction costs for protecting labor rents. Second, the evolutionary process that unfolded since the early stages of agriculture, which led to the development of idiosyncratic informal institutions enforcing normative conformity to varying extents across countries. This theorizing leads to a testable hypothesis, namely, that organizations based in countries whose agrarian origins are related to rice cultivation exhibit lower normative deviance. Empirically, we explore the relationship between rice cultivation in 2000 BCE and firms’ normative deviance regarding socially responsible behaviors. These findings not only contribute to developing theory on the phenomenon of normative deviance and organizational heterogeneity, but also add to the growing social control literature. Moreover, by delving into the historical factors underlying social control, we unveil the origins of organizations’ need to comply with societal expectations. Finally, our work stresses the need to go beyond “institutional black boxes”, such as collectivism or embeddedness, and engage in a more fine-grained explanation of the institutional traits that shape organizational behavior.

Work in progress

Innovation Capacity (with Ferrer-Serrano, M., Salesa, A., and X.H. Vazquez)

Moral Norms and the Economic Organization of the Firm (with Benito Arruñada and Marcelo Ortiz)

How do firms contract? (with Nuno Oliveira)