nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒12‒12
twenty-six papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Dynamics of innovation and internationalization among Vietnamese SMEs By Trinh, Long
  2. Upgrading of Hungarian subsidiaries in machinery and automotive global value chains By Andrea Elteto; Andrea Szalavetz; Gabor Tury; Aniko Magashazi
  3. Determinants of Quantitative and Qualitative Employment Growth: A Comparison between R&D-oriented and Other Start-ups in Japan By OKAMURO, Hiroyuki; KATO, Masatoshi
  4. Dutch social entrepreneurs in international development : Defying existing micro and macro characterizations By Helmsing, A.H.J.; Knorringa, P.; Gomez Gonzalez, D.
  5. Contextualizing Knowledge Sharing Strategy: The Case of an International Organization in the area of Development assistance By Thierno Tounkara; Pierre-Emmanuel Arduin
  6. Chinese foreign direct investment in Latin America and the Caribbean By Chen, Taotao; Pérez Ludeña, Miguel
  7. Competitiveness of EU vs. US By Karl Aiginger; Susanne Bärenthaler-Sieber; Johanna Vogel
  8. Strategies to overcome barriers to the implementation of the Barbados Programme of Action and the Mauritius Strategy in the Caribbean By Gomes, Charmaine; Hosein, Wendy
  9. Cournot Competition and "Green" Innovation: An Inverted-U Relationship By Luca Lambertini; Joanna Poyago-Theotoky; Alessandro Tampieri
  10. Evaluating policies to improve total factor productivity in four large Latin American countries By Aravena, Claudio; Hofman, André A.; Fernández de Guevara, Juan; Mas, Matilde
  11. Scientific cooperation between the European Union and Turkey – advantages and possible synergies By Agota David; Tamas Szigetvari
  12. Theoretical and Practical Approaches of Innovation at Regional Level By Antonescu, Daniela
  13. Entrepreneurial behavior in organizations: does job design matter? By Jeroen P. J. De Jong; Sharon K. Parker; Sander Wennekers; Chia-Huei Wu
  14. Forging a new Mittelstand compromise : lobbying strategies and business influence after the financial crisis By Keller, Eileen
  15. Information and communication technology for disaster risk management in the Caribbean: subregional solutions to the challenge of limited human resource capacity By Williams, Robert Crane
  16. Total Factor Productivity and the Institutional Possibility Frontier: An Outline of a Link between Two Theoretical Perspectives on Institutions, Culture and Long Run Growth By Ilya Lokshin
  17. The Efficiency of Triple-Helix Relations in Innovation Systems: Measuring the Connection between a Country’S Net Income and its Knowledge Base By Inga Ivanova; Oivind Strand; Duncan Kushnir; Loet Leydesdorff
  18. A new frontier for Caribbean convergence: integration without borders By Dookeran, Winston
  19. Directed Technological Change and Energy Efficiency Improvements By Jan Witajewski-Baltvilks; Elena Verdolini; Massimo Tavoni
  20. Survive or Die? A Decade of Tough Competition for Foreign Affiliates By Giorgia Giovannetti; Giorgio Ricchiuti; Margherita Velucchi
  21. Government quality and the economic returns of transport infrastructure investment in European regions. By Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
  22. The Dynamics of Comparative Advantage By Hanson, Gordon H.; Lind, Nelson; Muendler, Marc-Andreas
  23. Decision Frameworks and the Investment in R&D By Erin Baker; Olaitan Olaleye; Lara Aleluia Reis
  24. Tax Incentives and Job Creation in the Tourism Industry of Brazil By Grégoire Garsous; David Corderi; Mercedes Velasco
  25. Rol de las TIC en la gestión pública y en la planificación para un desarrollo sostenible en América Latina y el Caribe By Naser, Alejandra; Concha, Gastón
  26. Estrategias y políticas nacionales para la cohesión territorial: estudios de caso latinoamericanos By Buitelaar, Rudolf; Echeverri Perico, Rafael Antonio; Silva Lira, Iván; Riffo Pérez, Luis

  1. By: Trinh, Long
    Abstract: Innovation and internationalization have been considered as the major sources of growth for a long time. Various theoretical models suggest a bi-directional causality relationship between these two decisions. However, so far there is limited empirical evidence on whether there is a dynamic interdependence of innovation and internationalization decisions among SME firms in developing countries. Using a dynamic bivariate probit model and adopting a broader definition of internationalization, this paper analyzes the dynamic interdependence of internationalization and innovation decisions at the firm level in a developing country, by using a rich panel data set of SMEs collected biannually from 2005 to 2013 in Vietnam. Our empirical results show a high persistence in process, product innovations and internationalization decisions. Furthermore, we find that, for non-micro firms (i.e. firms with at least six fulltime permanent workers), past internationalization has a positive effect on process innovation but past process innovation do not has a significant effect on internationalization decision of these firms. For this group of firms, we also find signs of cross-dependence between process innovation and internationalization decision. Our empirical results, however, does not show dynamic interdependence between internationalization and product innovation. For micro firms, we do not find any evidence relating to interdependence of internationalization and both types of innovation.
    Keywords: internationalization, process innovation, product innovation, persistence of innovation, dynamic random effect bivariate probit, SME, Vietnam
    JEL: F14 L20 O31
    Date: 2015–12
  2. By: Andrea Elteto (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Andrea Szalavetz (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Gabor Tury (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Aniko Magashazi (Corvinus University of Budapest, International Relations, Multidisciplinary Doctoral School)
    Abstract: Global networks shape international production and trade. The main question of our paper is how Hungarian companies can improve their positions within these global value chains. The production and export of automotive and machinery industry are dominated by foreign multinational enterprises, therefore these sectors were chosen as examples. Research is based on interviews that explore local manufacturing subsidiaries' product, process and functional upgrading experience. Our findings show that there are differences among the firms in terms of extent of upgrading. This depends on one hand, on the owner’s global strategy and on the type of final products. On the other hand local capabilities are of crucial importance among the factors that influence the volume of intangible transfers. Furthermore, our interviews suggested that upgrading is not a unidirectional process: previously gained mandates can also be lost. Economic policy should support the business development and entrepreneurial learning and provide adequate conditions for suppliers and subsidiaries of leading multinational enterprises.
    Keywords: global value chains, machinery industry, automotive industry, Hungary
    JEL: D22 D24 E23 F16 F23 L6 L62 O52
    Date: 2015–11
  3. By: OKAMURO, Hiroyuki; KATO, Masatoshi
    Abstract: Start-ups are expected to contribute to innovation and job creation. Several studies have been conducted so far on the determinants of employment growth, but still little is known about the differences between R&D-oriented and other start-ups. Moreover, we argue that not only the quantitative, but also the qualitative employment growth (changes in workforce composition) matters in evaluating the contributions by start-ups. We empirically examine the determinants of quantitative and qualitative employment growth in Japanese start-ups based on a unique panel dataset, comparing between R&D-oriented and other firms. Empirical results show that 1) founder's human capital (education and work experience) does not significantly affect quantitative employment growth, while work experience positively affects the share of regular workforce, 2) R&D-oriented start-ups do not differ from the other start-ups in quantitative and qualitative employment growth, and 3) public subsidies at start-up increase both quantitative and qualitative employment growth of the R&D-oriented, but not of the other start-ups.
    Keywords: Start-up, R&D-oriented firm, employment growth, workforce composition, Japan
    Date: 2015–12
  4. By: Helmsing, A.H.J.; Knorringa, P.; Gomez Gonzalez, D.
    Abstract: In this paper we aim to contribute to the literature on social entrepreneurship by nuancing both existing micro-level characterizations as well as its presumed macro level societal impacts. Moreover, we explore connections between the micro and macro levels of analysis to see which types of social entrepreneurs are more likely to achieve what kinds of societal impacts. We present findings from an illustrative sample of 28 interviews with Dutch social entrepreneurs working in International Development. At the micro level, our qualitative findings do not support a perception of social entrepreneurs – often found in the Anglo Saxon literature - as heroic ‘lone rangers’ who ‘go it alone’ and with ‘dogged determination’ fight for a self-defined social cause. Instead, most social entrepreneurs in our study are acutely aware of the need to cooperate with other stakeholders and often use existing ‘off the shelf’ social causes and theories of change, even when they do develop innovative ways to try and achieve these goals. At the macro level, two starkly contrasting views exist on the possible societal impacts of social entrepreneurs. The first is an, often implicit, extension of the ‘lone-ranger’ perception of social entrepreneurs as people who ‘change the world’ or at least significantly contribute to social and economic transformation. At the other end of the spectrum in the literature we find those who argue that social entrepreneurs are potentially counterproductive to international development interventions as their social mission is not the result of a ‘collective deliberative process’, their activities are likely to displace NGO and/or government interventions and might even give governments an excuse to not intervene and ignore deeper levels of political contestation and societal inequalities. The paper is structured as follows. We first explain the rise in social entrepreneurship in international development, and we introduce the central assumptions in the literature on how social entrepreneurs define their social mission and on their likely societal impact. Next we present our data to show that our interviews do not support existing assumptions about the characteristics of social entrepreneurs nor about their possible societal impacts. Finally, we explore the usefulness of the typology proposed by Zahra et al, and we conclude that this typology indeed helps to further systematize a more nuanced understanding of the characteristics and likely roles of social entrepreneurs.
    Keywords: Dutch social entrepreneurs, international development, social enterprise, social entrepreneurship
    Date: 2015–12–04
  5. By: Thierno Tounkara (DSI - Département Systèmes d'Information - Télécom Ecole de Management - Institut Mines-Télécom); Pierre-Emmanuel Arduin (DRM - Dauphine Recherches en Management - CNRS - Centre National de la Recherche Scientifique - Université Paris IX - Paris Dauphine)
    Abstract: This paper proposes an operational evaluation grid which helps Organizations to determine the perception employees have about the degree of alignment between their Information System (IS) supporting knowledge sharing and different organizational culture contexts. Relying on this perception, Organizations can: (1) analyze barriers to a successful use of information system functionalities for greater efficiency of knowledge sharing and (2) identify appropriate IS functionalities they should invest on to increase the dynamic of knowledge sharing. A case study illustrates the use of our evaluation grid and the implications of this work are finally discussed at the end of this paper.
    Keywords: knowledge sharing,knowledge management,information system,organizational culture,strategic alignment
    Date: 2015–09–03
  6. By: Chen, Taotao; Pérez Ludeña, Miguel (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: Although Chinese corporations were relatively unknown in Latin America until a few years ago, their direct investments in the region have averaged about US$10 billion per year since 2010. Their presence and economic leverage have become very significant in many industries and countries of the region, but their motivation, strategy and procedures are not always well understood by Latin America’s governments, businesses and civil society. Similarly, Chinese companies still need to gain a better understanding of Latin America’s business environment and opportunities. The authors have overcome certain limitations in the official data by constructing estimates on the basis of information provided by the companies themselves. These figures support a number of key conclusions: • Since 2010 Chinese companies have invested, on average, about US$ 10 billion per year in Latin American countries. • China is still far from being one of the largest sources of FDI in Latin America, but Chinese companies have a significant presence in many sectors and industries, particularly in oil and mining. • Not all Chinese investment projects in Latin America are successful. Chinese companies are still learning to operate in an economic environment that is very different from that of their home country, a factor that can lead to implementation problems and project cancellations. • In the context of increasingly significant South-South economic relations, Chinese FDI in Latin America is expected to keep growing (and Latin America FDI into China to develop as well). • Latin American countries should encourage Chinese companies to diversify their investments in Latin America. In turn, Chinese FDI could greatly enhance its welcome by further contributing to enhanced diversification and productivity in Latin American economies. The authors propose that more attention should be paid to the strategies and practices of Chinese companies in Latin America and to the features that set them apart from others. Latin American governments should also assess how Chinese FDI can be treated as a new source of capital and knowledge with a view to raising productivity levels and enhancing the diversification of their economies. This working document is intended as a starting point for this fruitful discussion.
    Date: 2014–01
  7. By: Karl Aiginger; Susanne Bärenthaler-Sieber; Johanna Vogel
    Abstract: This paper aims to redefine the term competitiveness to enhance its usefulness for the evaluation of country performance and for policy conclusions. We attempt to establish a definition that is adequate if economic policy strives for a new growth path that is more dynamic, socially inclusive and ecologically sustainable. We tentatively apply the proposed definition to evaluate the "competitiveness" of EU member states as well as to compare Europe's "competitiveness" with that of the US (and, where possible, with Switzerland, Japan and China). In the first part of the paper, we examine the evolution of the concept from a focus on "inputs" at the firm level (price or cost competitiveness) to economic structure and capabilities at the country level and finally to "outcome" competitiveness, where outcomes are defined in a broad sense and in the context of the WWWforEurope project. We propose to define competitiveness as the "ability of a country (region, location) to deliver the beyond-GDP goals for its citizens". In the second part of the paper, the performance of the EU-27 countries is assessed along the dimensions described above. We begin with price competitiveness and then proceed to economic structure and countries’ capabilities regarding innovation, education, the social system, institutions and environmental ambition. We conclude with outcome competitiveness in terms of economic, social and ecological outcomes. Overall, we compile a database of 68 indicators that describe these different aspects of competitiveness. In the third part of the paper, we investigate empirically the relationship between "outcome" and "input" competitiveness for the EU-27 using panel data analysis for the period from 2000 to 2010. We construct a composite indicator for outcome competitiveness consisting of income, social and ecological pillars, following the beyond-GDP literature. This measure is then econometrically related to composite indicators of the three groups of input indicators: price competitiveness, economic structure, and capabilities. The results of panel OLS regressions suggest that both economic structure and capabilities on aggregate are positively related to our measure of outcome competitiveness, while a negative relationship is found for the wage component of price competitiveness. Among the different dimensions of capabilities, ecological preferences and – less robustly – institutions appear to be positively associated with outcome competitiveness.
    Keywords: Competitiveness, economic growth path, industrial policy, social capital as growth driver, sustainable growth
    JEL: O25 L16
    Date: 2015–12
  8. By: Gomes, Charmaine; Hosein, Wendy (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: Small island developing States (SIDS) are a special case in terms of environmental conservation and development. Many international meetings and conferences assisted SIDS in achieving the much needed recognition of their special circumstances and the severe challenges they face. In 1994, the United Nations Global Conference on Sustainable Development of SIDS resulted in the formulation of the Barbados Programme of Action (BPoA) which encompassed specific policies, actions and measures required at the national, regional and international levels over the short, medium and long term to address these special challenges. In 2005, the 10 year review of the BPoA took place, in Mauritius, where constraints associated with implementation of the BPoA were identified. The outcome of this review was the formulation of the Mauritius Strategy for Further Implementation of the Programme of Action for Small Island Developing States (MSI). A previous study by ECLAC, in 2006, identified challenges that SIDS may be encountering in the implementation of the BPoA and the MSI. The present study was conducted to further identify the barriers to their implementation and to propose strategies for their removal.
    Date: 2014–05
  9. By: Luca Lambertini (University of Bologna, Italy); Joanna Poyago-Theotoky (La Trobe University, Australia); Alessandro Tampieri (University of Luxembourg, Luxembourg)
    Abstract: We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximise social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.
    Keywords: "Green" R&D, R&D Spillovers, Emission Taxation, Time-Consistent Emission Tax, Pre-Commited Emission Tax
    JEL: Q55 Q56 O30 L13
    Date: 2015–08
  10. By: Aravena, Claudio; Hofman, André A.; Fernández de Guevara, Juan; Mas, Matilde (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: This paper develops a framework to analyze the potential of different variables to increase total factor productivity (TFP) growth in countries with poor productivity performance. It takes an industry level approach for a set of countries used as a benchmark. The information comes from the EU KLEMS and LA KLEMS databases. Once this influence is measured, the difference in the scores of each variable in four Latin American countries (Argentina, Brazil, Chile and Mexico) with respect to the benchmark is used to test their potential for increasing productivity growth. Results show that, the top priorities for these four countries are to improve the labour market, to reduce the share of self-employed people and to modernize the functioning of their economic systems. Our results also indicate that the intensification of investment in ICT and R&D activities is a key instrument for promoting growth. Public policies should also aim to encourage a higher endowment of Internet infrastructures and their use.
    Date: 2014–06
  11. By: Agota David (Regional Centre for Information and Scientific Development); Tamas Szigetvari (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: The Turkish economy has shown remarkable economic performance over the last decade. Currently, it is the 18th largest economy in the world. To increase its competitiveness, Turkey set research and development as a priority area for the next decade, with the ambitious goal of reaching 3% of GERD/GDP by 2023. Despite several controversies about the EU accession process in general, Turkey is an active member of the European research area. It is an associated member of the RDI Framework Programmes since 2002, it participated in and coordinated various scientific projects, policy-coordination actions, mobility programmes and won grants for excellent researchers. In the Turkish national STI strategy for 2011-2016, the three vertical and six horizontal axes consist of various scientific areas like ICT, Energy, Defence, Water, Food, which have been also set as priority areas in the European H2020 programme. We would like to focus in our article on possible synergies between priority areas, as well as on the role of SMEs in the innovation chain, which are enjoying a special attention in both Horizon 2020 and in Turkish national science and economic policy.
    Keywords: Turkey; cooperation; research and development; Science, Technology and Innovation policy; Horizon 2020; middle income trap.
    JEL: F42 H52 I23 O14 O32
    Date: 2015–11
  12. By: Antonescu, Daniela
    Abstract: During the last period, innovation represented the core topic of a wide number of studies and analyses due to the potential impact it could have on the development level of a country or a region. This aspect is relatively easy to explain: innovation represents an important source of regional/national competitiveness, a modern factor of growth and economic resilience, but also the fundamental objective of the current programming period and of the Europe 2020 Strategy. According to theory, innovation is a process that takes place predominantly at micro-economic level. Still, its approach at regional level gains increasingly more room within economic approaches starting from the premise that innovative performances of a company depend directly and to a large share on the endogenous local potential, but also on a combination of factors of influence, determined by the specifics and conditions of the area. The study intends to analyse from the theoretical and practical viewpoint the role of the innovation process within economic development and growth at regional and national level.
    Keywords: innovation, research, regional development, Strategy 2020, innovative region
    JEL: O3 O38 R1 R10 R12 R58
    Date: 2015–11–03
  13. By: Jeroen P. J. De Jong; Sharon K. Parker; Sander Wennekers; Chia-Huei Wu
    Abstract: We take a first step to explore how organizational factors influence individual entrepreneurial behavior at work, by investigating the role of job design variables. Drawing on multiple-source survey data of 179 workers in a Dutch research and consultancy organization, we find that entrepreneurial behavior, indicated by innovation, proactivity, and risk-taking items, is a higher order construct. Job autonomy is positively related with entrepreneurial behavior, as well as its innovation and proactivity subdimensions, while job variety is not. This suggests that interventions related to the vertical scope of jobs will promote entrepreneurial behaviors more than horizontal job expansion
    JEL: R14 J01
    Date: 2015
  14. By: Keller, Eileen
    Abstract: How did business interests succeed in influencing the post-crisis financial sector reform agenda? The present article draws on a remarkable instance of lobbying success in the process of reforming the Capital Requirements Directive (CRD4-CRR), which regulates banking within the European Union. Business lobbyists from Germany, supported by representatives from other countries, obtained a more favourable regulatory treatment of bank lending to small- and medium-sized corporations (SMEs) compared to the stipulations of the internationally agreed upon Basel III framework. An in-depth study of the formation of this new so-called SME compromise shows that existing approaches, which either highlight the special role of business in shaping public policies or the constraining effects of increased political salience and the politicisation of an issue cannot account for the dynamics of business influence in the case in question. Whereas an inside evidence-based strategy of influence failed, lobbying was successful because business representatives actively increased the salience of the issue through an outside lobbying strategy.
    Keywords: SME compromise, business influence, lobbying strategies, CRD4-CRR, Basel III, capital requirements, regulatory reform, financial crisis, banking regulation
    Date: 2015
  15. By: Williams, Robert Crane (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: This document was adapted from a paper originally presented to the 8th Annual Caribbean Conference of Comprehensive Disaster Management, held in Montego Bay, Jamaica in December, 2013. It summarizes several activities that ECLAC has undertaken to assess the current state of information and communications technology (ICT) in the field of disaster risk management (DRM) as practiced in the Caribbean. These activities included an in-depth study that encompassed a survey of disaster management organizations in the region, an Expert Group Meeting attended by the heads of several national disaster offices, and a training workshop for professionals working in DRM in the Caribbean. One of the notable conclusions of ECLAC’s investigation on this topic is that the lack of human capacity is the single largest constraint that is faced in the implementation of ICT projects for DRM in the Caribbean. In considering strategies to address the challenge of limited human capacity at a regional level, two separate issues are recognized – the need to increase the ICT capabilities of disaster management professionals, and the need to make ICT specialists available to disaster management organizations to advise and assist in the implementation of technology-focused projects. To that end, two models are proposed to engage with this issue at a regional level. The first entails the establishment of a network of ICT trainers in the Caribbean to help DRM staff develop a strategic understanding of how technology can be used to further their organizational goals. The second is the development of “Centres of Excellence” for ICT in the Caribbean, which would enable the deployment of specialized ICT expertise to national disaster management offices on a project-by-project basis.
    Date: 2015–04
  16. By: Ilya Lokshin (National Research University Higher School of Economics)
    Abstract: The paper proposes an outline for the link between two theoretical perspectives on the prerequisites of high institutional quality and long run growth. One framework is based on the tradeoff between disorder and dictatorship and introduces the notion of the institutional possibility frontier, another perspective focuses upon the role of total factor productivity as a parameter underlying long run growth. The connection between these frameworks is proposed and elaborated. The paper sheds some light on the nature of total factor productivity and designates the directions for further research on fundamental conditions of high-quality development
    Keywords: total factor productivity, institutional possibility frontier, social capital
    JEL: E02 Y90
    Date: 2015
  17. By: Inga Ivanova (National Research University Higher School of Economics); Oivind Strand (Aalesund University College); Duncan Kushnir (Chalmers University of Technology); Loet Leydesdorff (University of Amsterdam)
    Abstract: We apply the Method of Reflections developed by Hidalgo and Hausmann for measuring economic complexity to a Triple Helix system of innovations by defining the Patent Complexity Index in analogy and addition to the Economic Complexity Index and extending MR to three dimensions. PCI is operationalized in terms of patent groups instead of product groups. PCI and ECI are computed for three groups of countries. We find no correlation between economic complexity and technological complexity which means that the two measures capture different information. Adding the third dimension of governance to the Method of Reflections, one can incorporate knowledge dimension in Hidalgo and Hausmann defined ECI and use MR for evaluation the efficiency of Triple-Helix system of innovations. The Method of Reflections can thus be used for evaluating the efficiency of a TH system of innovations in terms of its contribution to the net national income
    Keywords: Triple-Helix innovation system, Method of Reflections, economic complexity, technological efficiency, patent complexity index PCI
    JEL: C63
    Date: 2015
  18. By: Dookeran, Winston (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: Today, forty years since its birth, the Caribbean integration has reached its limit.1 2 Consequently, there is urgent need to respond to the current realities and emerging global trends — which require greater engagement from the public, students, academics and policymakers — in moving the Caribbean Community towards a new trajectory of Caribbean convergence. The immediate concern is to devise ways of improving the convergence process among Latin American and Caribbean countries. This convergence process will have to be sensitive to both current and emerging global dynamics. This paper presents the roadmap of a new trajectory towards Caribbean convergence, sensitive to both current and emergent regional and global trends. It begins in Section I by identifying the emerging international political and economic trends that provide a backdrop against which the discussion on Caribbean convergence is squarely placed. Section II discusses the need for a new strategy of convergence, and provides the conceptual framework of Caribbean convergence. Section III spells out the pillars, strategies and delivery mechanisms of Caribbean convergence, and highlights the role of Trinidad and Tobago in this process. The paper concludes by pointing out the urgent need for a regional synergy of economic logic and political logic.
    Date: 2014–04
  19. By: Jan Witajewski-Baltvilks (Fondazione Eni Enrico Mattei (FEEM)); Elena Verdolini (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC)); Massimo Tavoni (Fondazione Eni Enrico Mattei (FEEM) and Politecnico di Milano)
    Abstract: This paper applies the Directed Technical Change (DTC) framework to study improvements in the efficiency of energy use. We present a theoretical model which (1) shows that the demand for energy is shifted down by innovations in energy intensive sectors and (2) highlights the drivers of innovative activity in these sectors. We then estimate the model through an empirical analysis of patent and energy data. Our contribution is fivefold. First, our model shows that under very general assumptions information about energy expenditures, knowledge spillovers and the parameters governing the R&D process are sufficient to predict the R&D effort in efficiency improving technologies. Second, we pin down the conditions for a log-linear relation between energy expenditure and the R&D effort. Third, the calibration of the model provides clear evidence that the value of the energy market as well as international and inter-temporal spillovers play a significant role in determining the level of innovative activity. Fourth, we show that innovative activity in energy intensive sectors shifts down the (Marshallian) demand for energy. Finally, we show that due to the streamlined modelling framework we adopt, the point estimates from our regression can potentially be used to calibrate any model of DTC in the context of energy consumption.
    Keywords: Energy Efficiency, Directed Technological Change, Induced Innovations, Patents Econometrics
    JEL: O31 O33 Q43
    Date: 2015–09
  20. By: Giorgia Giovannetti (Dipartimento di Scienze per l'Economia e l'Impresa); Giorgio Ricchiuti (Dipartimento di Scienze per l'Economia e l'Impresa); Margherita Velucchi
    Abstract: Firms' survival and internationalization are key elements to assess a country's competitiveness. In this paper, we draw on these two strands of literature and study how firms' characteristics affect demographic dynamics. We focus on foreign direct investors' survival probability, modelling it conditional on both parent company and affiliates' set of characteristics. The novelty of our approach is twofold: on the one hand, we generalize the base model used in business demography disentangling the effect of affiliates and parents. On the other hand, we stress the technological level relationships between affiliates and their investors. For the empirical assessment, we use an original longitudinal database (2004 - 2012) for Italy. We show that, larger affiliates of large investors compete better and survive more. Being part of networks of affiliates in the same country and/or sector also decrease the risk of exiting markets. When the investors have a higher (lower) technological level, their affiliates' failure probability increases (decreases). When the investor is more advanced than its affiliates, it considers the investment abroad like a cost-saving, low skills investment. The investor will easily disinvest, moving to a more convenient economic context. Affiliates with a higher level of technology, instead, are considered strategic to the parent company, due to skills, talent or competencies.
    Keywords: Business Demography, Survival, Competitiveness, Internationalization
    JEL: C41 L11 L25 F21
    Date: 2015
  21. By: Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
    Abstract: Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, in the case of Europe the relevant literature is increasingly failing to find a clear link between infrastructure investment and economic performance. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in EU regions during the period between 1995 and 2009. The results unveil a strong influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investments in motorways – the preferred option by local governments – yield significantly lower returns than the more humble but possibly more efficient secondary road. Government institutions also affect the returns of transport maintenance investment.
    Keywords: Transport infrastructure, Public capital investment, Economic growth, Institutions, Government quality, Regions, Europe.
    JEL: O43 R11 R40 R58
    Date: 2015–12
  22. By: Hanson, Gordon H. (UC San Diego and NBER); Lind, Nelson (UC San Diego); Muendler, Marc-Andreas (UC San Diego and NBER)
    Abstract: This paper characterizes the dynamic empirical properties of country export capabilities in order to inform modelling of the long-run behavior of comparative advantage. The starting point for our analysis is two strong empirical regularities in international trade that have previously been studied incompletely and in isolation to one another. The literature has noted a tendency for countries to concentrate exports in a few sectors. We show that this concentration arises from a heavy-tailed distribution of industry export capabilities that is approximately log normal and whose shape is stable across countries, sectors, and time. Likewise, previous research has detected a tendency for mean reversion in national industry productivities. We establish that mean reversion in export capability, rather than indicative of convergence in productivities or degeneracy in comparative advantage, is instead consistent with a well behaved stochastic growth process that delivers a stationary distribution of country export advantage. In literature on the growth of cities and firms, economists have used stochastic processes to study the determinants of the long-run size distributions. Our contribution is to develop an analogous empirical framework for identifying the parameters that govern the stationarydistribution of export capability. The main result of this analysis is that a generalized gamma distribution, which nests many commonly studied distributions, provides a tight fit of the data but log normality offers a reasonable approximation. Importantly, the stochastic process that generates log normality can be estimated in its discretized form by simple linear regression. Log linearity allows for an extension of our approach to multivariate diffusions, in which one can permit innovations to productivity to be transmitted intersectorally and internationally, as in recent models of trade and growth.
    Keywords: International trade; comparative advantage; generalized logistic diffusion; estimation of diffusion process JEL Classification: F14, F17, C22
    Date: 2015
  23. By: Erin Baker (Department of Mechanical and Industrial Engineering, College of Engineering, University of Massachusetts, Amherst, MA); Olaitan Olaleye (Department of Mechanical and Industrial Engineering, College of Engineering, University of Massachusetts, Amherst, MA); Lara Aleluia Reis (Centro Euro-Mediterraneo per i Cambiamenti Climatici, Fondazione Eni Enrico Mattei (FEEM))
    Abstract: In this paper we provide an overview of decision frameworks aimed at crafting an energy technology Research & Development portfolio, based on the results of three large expert elicitation studies and a large scale energy-economic model. We introduce importance sampling as a technique for integrating elicitation data and large IAMs into decision making under uncertainty models. We show that it is important to include both parts of this equation – the prospects for technological advancement and the interactions of the technologies in and with the economy. We find that investment in energy technology R&D is important even in the absence of climate policy. We illustrate the value of considering dynamic two-stage sequential decision models under uncertainty for identifying alternatives with option value. Finally, we consider two frameworks that incorporate ambiguity aversion. We suggest that these results may be best used to guide future research aimed at improving the set of elicitation data.
    Keywords: Decision Making Under Uncertainty, Climate Change, Stabilization Pathways, Energy technology, Ambiguity Aversion
    JEL: Q42
    Date: 2015–05
  24. By: Grégoire Garsous; David Corderi; Mercedes Velasco
    Abstract: In recent decades, a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies. The main objective of these programs is to increase local investment and employment, as tourism activities are labor intensive. Little evidence is available, however, to assess the effect of these policies on job creation. This paper analyzes a fiscal incentives program that the Brazilian federal government introduced in 2002 to develop the tourism industry in the undeveloped region of Northeast Brazil. It provides evidence that income tax credits had a significant positive effect on job creation. We find that local employment in the tourism industry was on average 34 percent higher in those municipalities that benefited from the program.
    Keywords: Tourism, Tax incentives, Taxation, Fiscal Policy, Investment, Labor markets
    Date: 2015–11
  25. By: Naser, Alejandra; Concha, Gastón (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: Este documento, pretende mostrar que las tecnologías de información y comunicación (TIC) no sólo pueden mejorar la productividad y la eficiencia de los procesos de las organizaciones, sino que también es posible que, en un rol más estratégico, contribuyan a un desarrollo sostenible en la ejecución de los planes y programas públicos. El documento trata del impacto de las tecnologías de información en los procesos de planificación y gestión pública como una contribución a disponer de un mejor gobierno que en definitiva va a permitir el desarrollo sostenible de los países. Se incluyen aspectos estratégicos asociados a las tecnologías de información y a la gobernanza como un elemento clave para facilitar la integración de los diversos actores de la sostenibilidad. Se presentan también algunas tecnologías específicas de apoyo a los procesos de planificación. En la primera parte de este documento, se hace un análisis de lo que debe ser una estrategia tecnológica sostenible, aspecto fundamental para establecer directrices claras en estos ámbitos en el largo plazo. Complementando lo anterior, incluye elementos de una nueva arquitectura para las TIC y los conceptos de gobernanza que resultan fundamentales para facilitar la integración de los diversos actores y tecnologías que deben actuar en forma coherente. Adicionalmente, se dan algunos ejemplos de herramientas tecnológicas apropiadas para la planificación en dos de sus funciones básicas como son la prospectiva y la evaluación. En la segunda parte, el documento se focaliza en las buenas prácticas asociadas a las TIC internacionalmente aceptadas considerando las nuevas tendencias hacia el desarrollo sostenible e inclusivo.
    Date: 2014–01
  26. By: Buitelaar, Rudolf; Echeverri Perico, Rafael Antonio; Silva Lira, Iván; Riffo Pérez, Luis (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: En el presente documento se presentan los resultados de un análisis comparativo realizado para 13 países de América Latina en el marco de la cooperación CEPAL-EUROsociAL, considerando una breve descripción de la forma de organización territorial, la estructura institucional de las políticas territoriales y las principales estrategias o políticas identificadas a nivel nacional.
    Date: 2015–01

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