Biography
Michela Giorcelli is an Associate Professor (with tenure) at the Department of Economics of UCLA. She is also a Faculty Associate at the National Bureau of Economic Research, and a research affiliate at CEPR, CESifo, IZA, J-PAL and CCPR. She serves as an Associate Editor at the Journal of Economic History. She holds a PhD in Economics from Stanford University.
Prof. Giorcelli is an economic historian and an applied-micro economist, whose research focuses on the managerial and technological drivers of productivity and innovation in the long-run run. Her book project "Professionals and Productivity: the Diffusion of Soft Technologies during and after WWII", under contract with Princeton University Press, analyzes the role of WWII in spurring management practices adoption in the US and their diffusion in Europe and Japan in the war aftermath.
Her work has appeared in leading economic journals, such as the American Economic Review and the Journal of Political Economy, and been funded by the National Science Foundation, the Russell Sage Foundation and the NBER. Her research has been awarded the Kiel Excellence Award in Global Economic Affairs (2020) for contribution to the fields of economic history and innovation, the Gerschenkron Prize (2017), and the Kauffman Foundation Fellowship Award (2016). She has received the UCLA Warren C. Scoville Award for Distinguished Teaching.
Interview with Professor Giorcelli
How does it feel to be shortlisted for the Panmure House Prize?
When I received the email informing me that I was shortlisted for the Panmure House Prize, well… it was hard to believe! I feel incredibly fortunate to be in this position and am experiencing a mix of honor, gratitude, and renewed motivation for the future. The Panmure House Prize is one of academia's most prestigious awards for emerging scholars, so being considered among the top contenders is an incredible honor. I am deeply grateful to the judging panel for taking the time to review my research and for shortlisting my application. I also want to express my heartfelt thanks to my coauthors, mentors, and students; their excellent contributions and unwavering support have been invaluable to my research journey. Finally, being shortlisted has inspired me with renewed motivation and enthusiasm. Standing on the shoulders of Adam Smith motivates me to push forward with my new research projects, knowing they have the potential to make a significant impact.
How did you find out about the Panmure House Prize and what was it that attracted you to apply?
I found out about the Panmure House Prize from the Panmure House website. As a passionate reader of Adam Smith’s works, I always check on the Panmure House initiatives and events. What attracted me to apply for the prize is its spirit. To use the same words as the award description, the Panmure House Prize supports research “that embodies Adam Smith's own approach to rigorous empiricism and long-term, inter-disciplinary thinking” to use the same words. I immediately thought that my research could fit this description well. All my works are based on meticulous empirical analysis that employs state-of-the-art econometric models. In my research I always take a long-term approach: I do believe it is essential to fully understand the impact of radical innovation on economic outcomes. Often such effects materialize over years or can have long-lasting implications that deserve our attention as researchers. Finally, my works have a strong inter-disciplinary component: I do research at the intersection of innovation, economic history, productivity, and management. I like to discuss how different fields approach the same research questions and I aim at providing answers relevant and useful for multiple disciplines.
I felt I could have a lifetime opportunity to contribute to the rich legacy of Adam Smith's intellectual rigor and visionary understanding of economics through my research and I applied!
Could you give us a brief introduction to your research for people who might not be from an academic background, could you explain what is the problem you are trying to solve?
My research lies at the intersection of innovation, economic history, productivity, and management. The fundamental question I aim to answer in my works is: to what extent does the adoption of “hard” and “soft” technologies affect firm innovation and productivity? We can think about hard technologies as new machinery, equipment, information and communication technologies (ICT). “Soft” technologies can be thought of as management, which includes both practices (the management systems that firms put in place) and people (the CEO and other managerial talent that firms acquire). Answering this question is challenging. On the one hand, firms that adopt cutting-edge hard and soft technologies innovate more and are more productive. On the other hand, more innovative and productive firms can adopt better technologies. What comes first? To solve this puzzle, I use evidence from economic history, more specifically from World War II (WWII). WWII was arguably one of the largest shocks to the U.S. economic and production system in history, that created several managerial and technological advancements. Moreover, it provides a large, ideal natural experiment to study radical innovations. Not only WWII is full of policy idiosyncrasies, that determined a natural variation in which firms innovated more, but it also presents an incredible richness of data, hard to obtain in modern settings, mostly due to confidentiality issues. Finally, taking a historical approach allows us to study the determinants of innovation and productivity both in the short and in the long run.
The results of my research so far document that WWII spurred the adoption of managerial practices by U.S. companies, which, in turn, improved their productivity and innovation for at least a decade. Management also had positive spillovers on related firms and other countries, especially Europe, where such practices were exported in the war aftermath. By contrast, the diffusion of new machinery and equipment had a more limited and short-lived impact on firm outcomes, especially when it was not associated with proper human capital training in the employment of such new technologies.
How do you conduct your research?
My research is conducted in several steps: from the documentation of the historical setting to the data collection, the empirical analyses, and the dissemination of my findings to a broader audience. The first part of my research involves a careful reconstruction of the historical setting. To do so, I build up on the work of historians and business historians, but I also complement their work by analyzing myself primary sources, such as official documents and reports. The second step involves the collection of data. I mostly work with firm-level data that I gather from historical archives. The great majority of the data I use have never been employed by other researchers. This means that the third step, data digitization, is a crucial one. I combine traditional manual data entry from the original documents into statistical software, with state-of-the-art techniques that use computer science methods to transform historical records into data. I next analyze such data using cutting-edge empirical methods. Following the current economic standards, I pay attention to constructing a credible counterfactual to evaluate historical policies. Finally, I disseminate my research results: I usually attend major economic, history, and management conferences to discuss my works and receive feedback from other researchers.
How do you envision your work will advance long-term thinking and innovation in your field and beyond?
I believe that my work could advance long-term thinking and innovation in economics, history, and management fields. First of all, taking a historical approach sheds new light on the long-term economic implications of innovation. This aspect has received limited attention so far while working with firm-level data, but now not only historical but also administrative data cover decades of years, making the long-term analysis more salient. I expect more and more papers in this area in the next few years. I also think that my work can influence the historical side in terms of data usage. A more data-oriented approach and the employment of empirical analysis can help history become a more quantitative field, of course without neglecting the qualitative aspect of historical events, that have made the field distinctive for decades. I also think that my work could affect research in the management field. Studying to what extent management interacts with other firm dimensions, for instance, technology or human capital, is a promising direction for future research.
Finally, I think that my research could be of interest outside the academic world. For instance, many historical policies implemented during and after WWII are remarkably similar to current policies. Knowing how these events shaped firm outcomes and innovation could be informative and should be taken into account to ensure the success of modern interventions.
What are you working on next?
At the moment I’m working on a book project, titled “Professionals and Productivity. The Diffusion of Soft Technologies during and after WWII,” under contract with the Princeton University Press. Traditionally, economics, historians, and business historians have considered World War II as the source of “an extraordinary surge of growth” in the US, thanks to the advancements in science and technology. Professionals and Productivity argues that wartime was also a major inflection point in the history of American business. The large-scale diffusion of innovative management practices to US firms involved in war production acted as a technology that put them on a higher growth path for decades but also helped create the “American Way” of business. In the following decade, the transfer of soft technologies to war-torn European and Japanese economies revolutionized their production methods, with positive, long-lasting effects on adopting companies. Based on newly collected firm-level data, Professionals and Productivity analyzes the changes in firm organization driven by management practices adoption and the complementarities between soft and hard technologies. The book also discusses how the core of management innovation developed during World War II, despite a few changes, has persisted over the years and has shaped today's firm best practices.
