I am a Ph.D. candidate in Managerial Economics and Strategy from Kellogg School of Management. Currently on the 2025–2026 academic job market.
My research interests are in corporate finance, political economy, and public economics. My research explores how firms respond to institutional oversight in environments where monitoring resources are scarce and markets and institutions are vulnerable to corruption, crime, and financial misconduct. I study how transparency requirements, enforcement mechanisms, and political access influence firms’ strategic decisions and market outcomes. I combine quasi-experimental designs with novel datasets to capture forms of misconduct and institutional response that are typically hard to observe.
You can find my CV here.
Email: elena.stella@kellogg.northwestern.edu
Working Papers
Organized Crime, Public Procurement, and Firms
Abstract | PDF
Can transparency requirements deter organized crime, and what are the long-run consequences on local economies? I exploit Italy's 2013 anti-mafia reform, which mandated police vetting for firms bidding on public contracts. Using detailed procurement records and newly collected police data, I develop a machine-learning approach to identify suspected firms that systematically avoid vetting despite high predicted bidding activity. The reform effectively deters suspected firms from participating in procurement: they contract in size, exit at higher rates, and shift business away from public contracts. Procurement becomes more competitive and less geographically concentrated, with increased entry and reallocation toward out-of-province contractors. Despite the shift away from local firms, employment and income remain stable and new firm creation increases, suggesting that transparency stimulates entrepreneurship rather than harming local economies.
Losing the Shield: How Political Connections Shape Environmental Enforcement
(with Sanjana Ghosh)
Abstract | PDF
This paper provides novel evidence on how political connections distort environmental regulatory enforcement in Maharashtra's Sugar Industry, using a unique natural experiment that creates simultaneous bidirectional variation in political access. We exploit a political crisis in Maharashtra, India, which caused some sugar mills to suddenly lose political connections while others gained it. Combining novel data on regulatory punishment, environmental & operational outcomes for sugar mills, we find that mills losing political access experience significantly higher enforcement rates, while mills gaining connections face no change in regulatory pressure. This effect is driven entirely by discretionary enforcement rather than complaint-driven inspections. Using granular emissions monitoring data, we show that this is not driven by changes in environmental performance by mills who lose political connections, while mills gaining connections significantly increase pollution-hiding behavior yet face no regulatory consequences. These findings demonstrate systematic heterogeneity in environmental enforcement in a weak institution setting.
The Value of Information for Regulatory Enforcement
(with Elliott Ash, Maddalena Ronchi, and Silvia Vannutelli)
Abstract | PDF
How does the quality of information affect the allocation of regulatory enforcement? We study this question in the context of the Italian Court of Auditors, a large bureaucracy that oversees municipal finances through a hierarchical structure. Local auditors gather information on municipalities and report to judges, who decide whether to issue enforcement deliberations. We exploit a reform that randomized auditor assignments, increasing auditor independence without changing judicial rules. Combining novel administrative records with a machine-learning measure of predicted municipal default, we find that judicial enforcement increased overall, with the largest gains in high-risk municipalities. This targeting improvement arises through two channels. First, auditors report more financial irregularities after random assignment, especially in high-risk municipalities and where pre-reform local ties were stronger. Second, experienced judges use these improved signals to focus deliberations on high-risk cases, highlighting the complementarity between information quality and decision-makers' expertise.
Work in Progress
Who Gets Approved? Political Influence in Los Angeles’ Discretionary Entitlement Process
(with Efraim Benmelech)
Abstract
This project investigates how political connections shape discretionary land-use decisions. We study the City of Los Angeles’s discretionary entitlement process, where both elected officials and planning staff exert substantial influence over the approval of land-use development projects. We assemble a new dataset covering every entitlement application filed between 2010 and 2023, linking each case to environmental reviews, staff assignments, appeals, and City Council deliberations, thereby capturing the full trajectory of each project from initial filing to final approval. We complement these administrative records with more than 30,000 planning determination letters, from which we extract information on property owners, representatives, and decision makers using large language models. This work quantifies the value of political and bureaucratic connections in the entitlement process, offering new evidence on how institutional discretion and access to influence can shape urban development.
