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on European Economics |
| By: | António Afonso; Davide Furceri |
| Abstract: | In this paper we provide a positive exercise on past business-cycle correlations and risk sharing in the European Union, and on the ability of insurance mechanisms and fiscal policies to smooth income fluctuations. The results suggest in particular that while some of the new Member States have well synchronized business cycles, for some of the other countries, business cycles are not yet well synchronized with the euro area’s business cycle, and risk-sharing mechanisms may not provide enough insurance against shocks. |
| Keywords: | EU; Optimum Currency Areas; Business Cycle Synchronization; Insurance Mechanisms. |
| JEL: | E32 E42 F41 F42 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp262007&r=eec |
| By: | Sophocles N. Brissimis (Bank of Greece and University of Piraeus); Ifigeneia Skotida (Bank of Greece and Athens University of Economics and Business) |
| Abstract: | This paper examines the optimal design of monetary policy in the European monetary union in the presence of structural asymmetries across union member countries. It derives analytically an optimal interest rate rule under commitment and studies the dependence of its coefficients on the parameters of the structural model of each economy, the central bank's preferences for inflation and output stabilization as shown in its loss function, and the relative size of each country. Based on a twocountry, forward-looking, general equilibrium model, which is estimated for two euro area countries (Germany and France), we show that there are gains to be achieved by the ECB taking into account the heterogeneity of economic structures. This finding appears to be robust under alternative weights given by the central bank to the stabilization of the target variables. Although the implementation of the proposed rule involves difficulties relating to data and estimation constraints as well as risks of accommodating structural divergences, it is important that the ECB takes into consideration national characteristics in formulating its monetary policy, especially in view of more countries joining the European monetary union in the future. However, as monetary and financial integration advances, the welfare benefits of monetary policy responding to individual countries' variables may become less significant. |
| Keywords: | Monetary policy rules; Heterogeneous monetary union |
| JEL: | E52 E58 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:62&r=eec |
| By: | Marie Brière (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussel and Credit Agricole Asset Management SGR, Paris.); Florian Ielpo (Centre d’Economie de la Sorbonne, Paris, France.) |
| Abstract: | This paper analyses the response of the Euro yield curve to macroeconomic and monetary policy announcements. We present a new methodology for estimating the reaction of the Euro swap curve to economic news, in a data-rich environment. Given the sharp degree of interdependence between Euro rates and US rates, we propose to use the factors of the US yield curve to disentangle the daily variation in Euro rates stemming from US influence and the variation resulting from European news. We highlight the importance of taking the US yield curve influence into account and investigate the shape of the Euro term structure reaction to a range of news types. We find that the impact of economic announcements on the yield curve shows different patterns according to the news and we provide a hierarchy of the economic figures that have the strongest impact on the different maturities. |
| Keywords: | announcements, news, swap rates, yield curve, interest rates, Euro area. |
| JEL: | E43 E52 F42 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:07-038&r=eec |
| By: | Stephen G.Hall (Leicester University and NIESR); George Hondroyiannis (Bank of Greece); P.A.V.B. Swamy (U.S. Bureau of Labor Statistics); George S. Tavlas (Bank of Greece a) |
| Abstract: | As part of its monetary policy strategy, the European Central Bank has formulated a reference value for M3 growth. A pre-requisite for the use of a reference value for M3 growth is the existence of a stable demand function for that aggregate. However, a large empirical literature has emerged showing that, beginning in 2001, essentially all euro area M3 demand functions have exhibited instability. This paper considers euroarea money demand in the context of the portfolio-balance framework. Our basic premise is that there is a stable demand-for-money function but that the models that have been used until now to estimate euro area money-demand are not well-specified because they do not include a measure of wealth. Using two empirical methodologies - - a co-integrated vector equilibrium correction (VEC) approach and a time-varying coefficient (TVC) approach - - we find that a demand-for-money function that includes wealth is stable. The upshot of our findings is that M3 behaviour continues to provide useful information about medium-term developments on inflation. |
| Keywords: | Money demand; VEC, time varying coefficient estimation; Euro area |
| JEL: | C20 E41 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:61&r=eec |
| By: | Evans, Kevin (Cardiff Business School); Speight, Alan E H |
| Abstract: | The short-run reaction of Euro returns volatility to a wide range of macroeconomic announcements is investigated using five-minute returns for spot Euro-Dollar, Euro-Sterling and Euro-Yen exchange rates. The marginal impact of each individual macroeconomic announcement on volatility is isolated whilst controlling for the distinct intraday volatility pattern, calendar effects, and a latent, longer run volatility factor simultaneously. Macroeconomic news announcements from the US are found to cause the vast majority of the statistically significant responses in volatility, with US monetary policy and real activity announcements causing the largest reactions of volatility across the three rates. ECB interest rate decisions are also important for all three rates, whilst UK Industrial Production and Japanese GDP cause large responses for the Euro-Sterling and Euro-Yen rates, respectively. Additionally, forward looking indicators and regional economic surveys, the release timing of which is such that they are the first indicators of macroeconomic performance that traders observe for a particular month, are also found to play a significant role. |
| Keywords: | Intraday volatility; macroeconomic announcements; exchange rates |
| JEL: | G12 E44 E32 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:accfin:2007/4&r=eec |
| By: | Kox, Henk L.M.; Leeuwen, George van; Wiel, Henry van der |
| Abstract: | Using data from 11 EU countries, the paper investigates the impact of scale economies on labour productivity in European business services. Moreover, it analyses whether the incidence of scale sub-optimality is related to characteristics of the market or to national regulation characteristics. The econometric analysis is based on a production function model in combination with a distance-to-the-frontier model. We find evidence for the existence of increasing returns to scale in business services firms. A result is that throughout the EU, business-services firms with less than 20 employed persons have a significantly lower level of labour productivity than the rest of the business-services industry. Two factors explain the scale inefficiencies. The first is the level of policy-caused firm-entry costs; higher start-up costs for new firms go along with more scale inefficiency. Secondly, business-services markets tend to be segmented by firm size: firms tend to compete predominantly with firms in their own size segment of the markets. Scale-related inefficiencies are to some extent compensated by more competition within a firm's own size segment. If a firm operates in a more “crowded” segment this has a significant and positive impact on its labour productivity. We derive some policy implications from our findings. |
| Keywords: | EU; business services; scale efficiency; labour productivity; regulation; entry costs |
| JEL: | L5 L11 D2 L8 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6137&r=eec |
| By: | António Afonso; Juan González Alegre |
| Abstract: | In this paper we test whether a reallocation of government budget items can enhance long-term GDP growth in a set of European countries. We apply modern panel data techniques to the period 1970-2006, and we use three alternative dependent variables in a growth regression: economic growth, total factor productivity and labour productivity. Our results are able to identify also the distortions induced by public expenditure in the private factors allocation. In particular, we detect a strong crowding-in effect associated to public investment, which have enhanced economic growth by boosting private investment. We also associate a significant dependence of productivity on public expenditure on education as well as the role of social security and health issues in growth and the labour market. |
| Keywords: | economic growth; panel models; fiscal policy. |
| JEL: | C23 E62 H50 O40 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp292007&r=eec |
| By: | Blanchflower, David G. (Dartmouth College, USA, University of Stirling, NBER, IZA, CESifo and Member, Monetary Policy Committee Bank of England); Oswald, Andrew J. (Department of Economics, University of Warwick UK) |
| Abstract: | In surveys of well-being, countries such as Denmark and the Netherlands emerge as particularly happy while nations like Germany and Italy report lower levels of happiness. But are these kinds of findings credible? This paper provides some evidence that the answer is yes. Using data on 16 countries, it shows that happier nations report systematically lower levels of hypertension. As well as potentially validating the differences in measured happiness across nations, this suggests that blood-pressure readings might be valuable as part of a national well-being index. A new ranking of European nations’ GHQ N6 mental-health scores is also given. |
| Keywords: | Health ; hypertension ; Gross National Happiness ; GNH index ; GWB index ; ghq ; blood pressure ; national well-being index. |
| JEL: | I1 I3 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:828&r=eec |
| By: | Anna Lipinska |
| Abstract: | The EMU accession countries are obliged to fulfill the Maastricht convergence criteria prior toentering the EMU. What should be the optimal monetary policy satisfying these criteria? To answer this question, the paper proposes a DSGE model of a two-sector small open economy.First, I derive the micro founded loss function that represents the objective function of theoptimal monetary policy not constrained to satisfy the criteria. I find that the optimal monetary policy should not only target inflation rates in the domestic sectors and aggregate output fluctuations but alsodomestic and international terms of trade. Second, I show how the loss function changes when themonetary policy is constrained to satisfy the Maastricht criteria. The loss function of such aconstrained policy is characterized by additional elements penalizing fluctuations of the CPI inflation rate, the nominal interest rate and the nominal exchange rate around the new targets which are different from the steady state of the unconstrained optimal monetary policy. Under the chosen parameterization, the optimal monetary policy violates two criteria:concerning the CPI inflation rate and the nominal interest rate. The constrained optimal policy ischaracterized by a deflationary bias. This results in targeting the CPI inflation rate and the nominal interest rate that are 0.7% lower (in annual terms) than the CPI inflation rate and the nominal interest rate in the countries taken as a reference. Such a policy leads to additional welfare costs amounting to 30% of the optimal monetary policy loss. |
| Keywords: | Optimal monetary policy, Maastricht convergence criteria, EMU accession countries |
| JEL: | F41 E52 E58 E61 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0808&r=eec |
| By: | Axel Dreher (KOF Swiss Economic Institute, ETH Zurich); Tim Krieger (University of Paderborn, Department of Economics, Paderborn, Germany) |
| Abstract: | We empirically analyze convergence of European producer and consumer prices for diesel fuel and investigate the role of excise taxation. By comparing the speed of convergence of prices and taxes we find a surprisingly fast speed of convergence for consumer prices. While this can in part be explained by fuel tourism, the main driving force is producer price dynamics. Tax convergence contributes weakly to price convergence, but the overall effect is to slow down consumer relative to producer price convergence. |
| Keywords: | price convergence, diesel, international taxation, European integration, panel unit roots |
| JEL: | F15 H73 Q48 C23 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:07-182&r=eec |
| By: | Jan Fidrmuc; Klarita Gërxhani |
| Abstract: | Recent Eurobarometer survey data are used to document and explain the stock of social capital in 28 European countries. Social capital in Central and Eastern Europe – measured by civic participation and access to social networks – lags behind that in Western European countries. Using regression analysis of determinants of individual stock of social capital, we find that this gap persists when we account for individual characteristics and endowments of respondents but disappears completely after we control for aggregate measures of economic development and quality of institutions. Informal institutions such as prevalence of corruption in post-communist countries appear particularly important. With the enlargement of the European Union, the gap in social capital should gradually disappear as the new member states catch up (economically and institutionally) with the old ones. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:edb:cedidp:07-10&r=eec |
| By: | Jan Fidrmuc; Victor Ginsburgh; Shlomo Weber |
| Abstract: | Extensive multilingualism is one of the most important and fundamental principles of the European Union. However, a large number of official languages (currently 23) hinders communication and imposes substantial financial and legal costs. We address the merits of multilingualism and formulate an analytical framework to determine the optimal number of official languages in the EU. Using the results of a 2005 Eurobarometer survey of languages in the EU 27, we first derive the sets of languages that minimize aggregate linguistic disenfranchisement of the Union’s citizens for any given number of languages. We then proceed by discussing the political-economy framework and feasibility of a potential linguistic reform in the EU under alternative voting rules. We argue that a six-language regime would be a reasonable intermediate choice: a lower number of official languages results in excessive linguistic disenfranchisement whereas adding further languages increases the costs but brings only modest benefits. We also show that even though a linguistic reform reducing the number of official languages to six is unlikely to gain sufficient support at the present, this may change in the future since young people are more proficient at speaking foreign languages. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:edb:cedidp:07-07&r=eec |
| By: | Jean-Marc Roda (Bois tropicaux - Production et valorisation des bois tropicaux - CIRAD : UPR40); Eric Aretz (Alterra - Centre for Ecosystem studies, - Wageningen University and Research Centre); Hin Fui Lim (FRIM - Forest Research Institute of Malaysia - FRIM) |
| Abstract: | This paper analyses the side effects of the stricter regulation on tropical hardwood or timber imports. It considers the place of Europe within the global timber market, where Europe accounts only for a very limited share. It also explains the high selectivity of European markets, with its consequences. While tropical wooden furniture and other secondary processed products are not considered as timber here, their question is also discussed. The number of empirical studies specifically dealing with the side effects of EU regulations is limited, but the results are converging, showing that these regulations have a general adverse effect, contrary to the initial aim of promoting the sustainability of tropical timbers. These side effects are essentially to divert the trade towards countries with lower standards, and to add a burden on most of the producing countries which have already a set of comparative disadvantages for the production of legal or sustainable timber. The effects are positive on a limited number of companies which markets are very dependent of Europe. The question is then analysed from a broader perspective, replacing the effects of the EU regulations as an incidental factor compared to the increasing consumption of tropical timber by the three developing giants: Brazil, India and China. |
| Keywords: | timber trade; trade regulation; environmental regulation, Europe; tropical timber; tropical hardwwod; side effect; adverse effect |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:cirad-00194212_v1&r=eec |
| By: | Klaus S. Friesenbichler (WIFO) |
| Abstract: | Aiming at both low prices and innovation, policy makers and economists have long argued about the optimal intensity of competition. While the current discussion in telecommunication regulation points out that competition can be detrimental to innovation due to the low appropriability of rents established economic approaches advocate competition to be conducive to innovation. This reflects the dispute in economics between Schumpeterian and neoclassical theories. Aghion et al. (2005) offered reconciliation by modelling an inverted U relationship, which in this paper I test for European mobile phone providers. Innovation is measured by a service launch indicator and R&D investments, and competition is approximated by market concentration. As markets are clearly defined, problems of market definition which usually blur concentration indices are avoided. I find robust and statistically significant support for the tested quadratic relationship for both innovation indicators. The innovation optimising Herfindahl-Hirschman laid around 5,500 between 2001 and 2003, but may however vary over time. This finding points at a conflict in the realisation of the regulatory objectives of low prices and innovation at the same time. |
| Keywords: | Innovation, R&D, market concentration, inverted U, mobile telecommunication research and Development |
| Date: | 2007–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2007:i:306&r=eec |
| By: | d'Artis Kancs |
| Abstract: | In this paper we study how European integration would a¤ect the industry location and sectoral specialisation of local economies in the CEE accession countries. The theoretical framework of our study is based on the new eco- nomic geography, which allows us to predict not only the post-integration spe- cialisation patterns, but captures also other general equilibrium e¤ects, such as transition to market economy, which turn out to be highly significant in CEE. Our empirical results suggest that the CEE specialisation pattern would be distinct from the old EU member states. First, the EU integration would reduce regional specialisation in CEE. Second, the bell-shaped specialisation pattern predicted by the underlying theoretical framework is inverse in CEE. We could explain a large portion of these di¤erences by CEE-specific processes, such as integration of the CMEA. These distortions are higher in those regions, which were more integrated in the CMEA. Our simulation results also suggest a convergence in the specialisation across the CEE regions. |
| Keywords: | Economic geography, transport costs, European integration, monop- olistic competition. |
| JEL: | F15 R12 R13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:19507&r=eec |
| By: | Ingo Geishecker (Georg-August-Universität Göttingen); Ingo Geishecker (University of Nottingham); Jakob Roland Munch (Department of Economics, University of Copenhagen) |
| Abstract: | This paper studies the impact of outsourcing on individual wages in three European countries with markedly different labour market institutions: Germany, the UK and Denmark. To do so we use individual level data sets for the three countries and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing by broad region. Estimating the same specification on different data show that there are some interesting differences in the effect of outsourcing across countries. We discuss some possible reasons for these differences based on labour market institutions. |
| Keywords: | international outsourcing; individual wages; labour market institutions |
| JEL: | F16 J31 C23 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:07-03&r=eec |
| By: | Christian Bellak; Markus Leibrecht; Joze P. Damijan |
| Abstract: | This paper analyzes the importance of taxes on corporate income and production-related tangible infrastructure as determinants of Foreign Direct Investment (FDI) in Central- and Eastern European Countries (CEECs). We operationalize taxes using effective average tax rates on the bilateral level and employ indices derived from principal component analysis as a proxy for the infrastructure endowment. In the empirical analysis we control for a possible interrelation between taxes and infrastructure as determinants of FDI – an issue usually neglected in the literature. Thus, we posit that there are likely to be interaction effects between taxes and infrastructure as determinants of FDI. Specifically, a favorable infrastructure endowment may compensate for relatively high taxes. Hence, higher taxes may not deter FDI. The results from our panel econometric analysis of bilateral outward FDI flows of 7 home in 8 CEE host countries for the 1995-2004 period in an augmented gravity model setting show that (i) both taxes and infrastructure play a role in the location decisions made by Multinational Enterprises; (ii) telecommunication and transport infrastructure are of special significance to FDI; and (iii) the tax-rate sensitivity of FDI indeed decreases with the level of infrastructure endowment. |
| Keywords: | Foreign direct investment, transition economies, infrastructure, taxation |
| JEL: | F15 F21 F23 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:19307&r=eec |
| By: | Panagiotis Liargovas; Dimitrios Dapontas |
| Abstract: | This paper seeks to explain the causes of turbulence in foreign exchange markets in selected transition Economies (Albania, Belarus, Bulgaria, Croatia, FYROM, Moldova, Romania and Ukraine), by using a set of CATREG models and introducing explanatory variables, not directly associated with the official exchange rate. It considers the influence of macroeconomic, social development, institutional and external variables, by providing an integrated framework beyond first, second or third generation previous released theoretical models, bringing a new innovative and wider approach to the field. |
| Keywords: | currency crisis, transition economies, Eastern European countries |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:uop:wpaper:0011&r=eec |
| By: | Aaro Hazak (School of Economics and Business Administration, Tallinn University of Technology) |
| Abstract: | This paper presents an empirical analysis of companies’ capital structure and dividend decisions under distributed profit taxation (DPT), the corporate taxation regime of Estonia since 2000. The survey is based on the financial information available from the Estonian Commercial Registry in respect of a sample of 51 thousand Estonian companies over a ten-year period. For the purposes of cross-country comparison, the Amadeus database information of 0.7 million companies from the European Union countries is used. The results give support to the hypothesis that the share of external financing in total capital of Estonian companies is lower in the conditions of DPT in comparison to that under the traditional gross profit taxation system. The DPT system has led companies to distribute lower portions of profit as dividends. The undistributed profits appear to be largely retained as surplus cash, instead of being reinvested into long term productive assets. DPT appears to have a positive impact on companies’ liquidity and sustainability, however the downside being the allocation of available funds into potentially inefficient investments. The results of the study may lead to discussions on introducing a similar system in other jurisdictions or on modifying the corporate taxation principles in Estonia. |
| Keywords: | capital structure, dividend policy, corporate taxation |
| JEL: | G32 G35 K34 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:155&r=eec |
| By: | Andersson, Linda (Department of Business, Economics, Statistics and Informatics); Karpaty, Patrik (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | The objective of this paper is to analyze relative employment effects in Sweden due to offshoring. In contrast to most previous studies in this field, our analysis is based on firm level data. More specifically the dataset contains Swedish manufacturing firms, 1997-2002. In addition we have access to actual firm level import data on intermediate goods and services, respectively. The results show that the relative demand for high skilled labor is positively affected by service offshoring and offshoring of goods to Asia, but negatively affected by offshoring to high income countries. The relative demand for medium skilled labor is negatively affected by offshoring of goods to Eastern Europe, but positively affected by offshoring to high income countries. In contrast to expectations, the results show that the relative demand for low skilled labor is positively affected by offshoring of goods to Eastern Europe. However, these results are related to very small elasticities, which in turn translates into a small number of jobs affected. |
| Keywords: | Offchoring; firm level; data relative employment; translog cost function |
| JEL: | F14 F23 L23 |
| Date: | 2007–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2007_005&r=eec |
| By: | Ronny Freier; Viktor Steiner |
| Abstract: | "Marginal Employment", i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a three-years' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany. |
| Keywords: | Marginal employment, social security contributions, wage subsidies, labour market policy, evaluation of treatment effects |
| JEL: | J23 J64 H43 C35 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp744&r=eec |
| By: | Heinemann, Friedrich; Janeba, Eckhard |
| Abstract: | The process of globalization has an important impact on national tax policies. Most of the literature on taxation of capital in open economies does not focus directly on the political decision making process and assumes that the desired tax policy is responding to objective underlying tradeoffs. Based on an original survey of members of German national parliament (Bundestag) in 2006/7 we document a strong ideological bias among policy makers with respect to the perceived mobility of international tax bases (mobility of real capital and shifting of paper profits). Ideology via party affiliation influences also directly and indirectly the perceived national autonomy in tax setting and preferences for a EU minimum tax for companies. There seems little consensus as to what the efficiency cost of capital taxation in open economies are, even though our survey falls in period of extensive debate about and actual adoption of a company tax reform bill in Germany. |
| Keywords: | Globalization, business taxation, tax competition, beliefs, member of parliament |
| JEL: | D78 D83 H25 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6654&r=eec |
| By: | Karsten Kohn; Alexander C. Lembcke |
| Abstract: | Using linked employer-employee data from the German Structure of Earnings Survey 2001,this paper provides a comprehensive picture of the wage structure in three wage-settingregimes prevalent in the German system of industrial relations. We analyze wagedistributions for various labor market subgroups by means of kernel density estimation,variance decompositions, and individual and firm-level wage regressions. Unions' impactthrough collective and firm-level bargaining mainly works towards a higher wage level andreduced overall and residual wage dispersion. Yet observed effects are considerablyheterogeneous across different labor market groups. There is no clear evidence for wagefloors formed by collectively bargained low wage brackets which would operate as minimumwages for different groups of workers. |
| Keywords: | Collective wage bargaining, wage structure, kernel density estimation, variancedecomposition, wage equations, German Structure of Earnings Survey |
| JEL: | J31 J51 J52 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0813&r=eec |
| By: | Faria, Pedro; Schmidt, Tobias |
| Abstract: | In this paper we investigate the factors that lead firms to cooperate with partners from foreign countries on innovation activities. Portuguese and German data from the harmonised Community Innovation Survey (CIS III) allow us to compare innovation cooperation behaviour of private firms in the two countries. Using a bivariate probit model, we show that the characteristics of firms cooperating with foreigners in both countries are quite similar. International activities other than cooperation, firm size and the importance of protection methods for knowledge have a positive influence in both countries on the decision to cooperate with foreign partners. Some differences remain, however: In Germany, exporters are more likely to cooperate with foreign partners than non-exporters, whereas in Portugal this is not the case. |
| Keywords: | International cooperation, Innovation, CIS III, Germany, Portugal |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6659&r=eec |
| By: | Jorge Braga de Macedo (Faculdadde de Economia da Universidade Nova de Lisboa e Instituto de Investigação Científica Tropical) |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0004&r=eec |
| By: | Metzger, Georg |
| Abstract: | Entrepreneurs are often faced with problems regarding start-up financing. But compared to novice entrepreneurs, experienced entrepreneurs should have both more knowledge and better contacts, which should potentially reduce the occurrence of problems and affect finance composition. However, experience of business failure might result in additional effects. This analysis therefore investigates the effects of experience on several aspects of start-up financing. It is based on data from the KfW Start-up Monitor, a representative annual survey of the German population. The results show that experience affects several financing issues. Yet the impacts depend on the kind of experience. With regard to previously failed entrepreneurs, who are of particular interest, the findings indicate that they cut back their financing demand and are more likely faced with problems satisfying this demand. However, previously failed entrepreneurs do not significantly differ in the sources they use to finance their businesses. |
| Keywords: | Entrepreneurial experience, restart, start-up financing |
| JEL: | G32 L26 M13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6650&r=eec |
| By: | Amynah Gangji (DULBEA, Université libre de Bruxelles, Brussels); Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | This study investigates the causes of unemployment persistence among the Belgian labour force. The underlying issue was to determine the impact of past unemployment spells on future labour market opportunities. Some European studies have demonstrated the existence of a true causal relationship between successive unemployment spells implying a stigmatisation effect for the unemployed. This so-called state dependence can occur through a reduction in human capital or through employer recruitment and labour retention practices. The model used is a dynamic random effects probit model controlling for unobserved heterogeneity and the initial condition problem. It was applied on the Panel Study on Belgian Households, covering the years 1994 to 2002. The results suggest that while observed and unobserved heterogeneity explain between 57% and 82% of unemployment persistence, the remainder is induced by the presence of state dependence. All else equal, an individual unemployed this year will be between 11.4 and 33 percentage points more likely to be unemployed next year as compared with an employed person. The presence of a stigmatisation effect of unemployment involves that the costs of unemployment are much higher than the simple loss of income and human capital associated to the current job loss. The study demonstrates the importance to concentrate the efforts on the prevention of unemployment. |
| Keywords: | unemployment persistence, state dependence, dynamic random effects probit model, unobserved heterogeneity, initial condition, Belgium |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:07-20rs&r=eec |
| By: | Sjöholm, Hans-Kristian (Swedish School of Economics and Business Administration) |
| Abstract: | This paper examines the potential impact of new capital requirements on asset allocations of Finnish pension institutions. We describe the new requirements and consider portfolio construction to minimize regulatory capital, given the investor’s preferred level of expected return. Results identify portfolio transactions that enhance expected return without increasing capital needs. Regulation calls for portfolio diversification and prudence in management, but this paper shows that market participants can exploit inconsistencies in regulation. Possible future consequences include capital outflows from the pension system and an unintended decrease in pre-funding of old-age pensions. |
| Keywords: | finnish pension system; solvency; portfolio; optimization; regulatory; arbitrage |
| Date: | 2007–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:hanken:0532&r=eec |
| By: | Guido Heineck; Regina T. Riphahn |
| Abstract: | Over the last decades the German education system underwent numerous reforms in order to improve "equality of opportunity", i.e. to guarantee all pupils equal access to higher education. At the same time internationally comparative evidence yields that Germany features particularly low intergenerational mobility with respect to educational attainment. This study investigates the development in intergenerational education mobility in Germany for the birth cohorts 1929 through 1978 and tests whether the impact of parental background on child educational outcomes changed over time. In spite of massive public policy interventions and education reforms our results yield no significant reduction in the role of parental background for child outcomes over the last decades. |
| Keywords: | education transmission, intergenerational mobility, schooling, human capital transmission |
| JEL: | I21 I28 J11 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp738&r=eec |
| By: | Dmitri Sokolov (Institute of Economics at Tallinn University of Technology) |
| Abstract: | During the last years the development of e-banking in Estonia has been very significant. According to the report of the World Economic Forum, the Estonian IT-development has been substantial. The success of e-banking in Estonia can be compared to the corresponding success of the Nordic countries. According to the Deutsche Bank Research, around 70-80% of the Internet users in Estonia use Internet banking and in this respect, Estonia could be compared to Finland, Norway and Iceland. Despite of certain benefits, e-banking has turned out a great risk, as bank clients are expecting e-banking services to be available 24 hours a day and seven days a week. The major risks associated with e-banking are strategic, operational, legal and reputational. Security is considered the central operational risk of e-banking. Some of the specific problems cut across risk categories, e.g. breach of security allowing unauthorised access to customer information can be classified as an operational risk, but such an event also exposes the bank to legal risk and reputational risk. Customer education on security risks and precautions can play an important role for consumer protection and for limiting reputational risk. In Estonia, all commercial banks which are engaged in e-banking activities have published on their websites recommendations to potential customers on how to increase the security while making transactions in electronic environment. The Estonian Financial Supervision Authority responsible for the banking supervision has disseminated on its website a special brochure to e-banking customers on how to use the Internet bank safely. At the international level the Basel Committee on Banking Supervision (BCBS) has elaborated risk management principles for e-banking. These risk management principles fall into three broad, and often overlapping, categories: Board and Management Oversight, Security Controls and Legal and Reputational Risk Management. The research question of this paper is whether these risk management principles are implemented at the Estonian banks. In order to assess the risk management practices of the Estonian banks in the field of e-banking as well as their conformity to the BCBS guidelines, the author has prepared a questionnaire and circulated it to all banks. According to the results of the survey, the Estonian banks generally comply with all BCBS guidelines in the field of e-banking risk management. |
| Keywords: | e-banking, risks, risk management |
| JEL: | G21 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:156&r=eec |