nep-eec New Economics Papers
on European Economics
Issue of 2008‒01‒26
thirty-one papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The working of the eurosystem - monetary policy preparations and decision-making – selected issues By Philippe Moutot; Alexander Jung; Francesco Paolo Mongelli
  2. Testing for Economies of Scope in European Railways: An Efficiency Analysis By Christian Growitsch; Heike Wetzel
  3. Should we Care for Structural Breaks When Assessing Fiscal Sustainability? By António Afonso; Christophe Rault
  4. Which predictor is the best to predict inflation in Europe: the real money-gap or a nominal money based indicator? By Gilles Dufrénot; Roseline Joyeux; Anne Peguin-Feissolle
  5. Sui Generis EMU By Barry Eichengreen
  6. The Irish Tiger and the German Frog: A Tale of Size and Growth in the Euro Area By Éloi Laurent; Jacques Le Cacheux
  7. A forewarning indicator system for financial crises: the case of six central and eastern european countries By Irène Andreou; Gilles Dufrénot; Alain Sand-Zantman; Aleksandra Zdzienicka-Durand
  8. The Single Currency's Effects on Eurozone Sectoral Trade: Winners and Losers? By de Nardis, Sergio; De Santis, Roberta; Vicarelli, Claudio
  9. Export prices and increasing world competition: evidence from French, German, and Italian pricing behavior By Sarah Guillou; Stefano Schiavo
  10. Institutions, Technological Change and the Wage Differentials Between Skilled and Unskilled Workers: Theory and Evidence from Europe By Corsini, Lorenzo
  11. Investment in Next Generation Networks and the Role of Regulation: A Real Option Approach By Andrea Gavosto; Guido Ponte; Carla Scaglioni
  12. EU Regulation and Competition Policy among the Energy Utilities By Richard Green
  13. Exports and Productivity: Comparable Evidence for 14 Countries By Flora Bellone; Liza Jabbour; Patrick Musso; Lionel Nesta; Stefano Schiavo
  14. The Determinants of Capital Buffers in CEECs By Francesco d’Avack; Sandrine Levasseur
  15. Nonlinear Impacts of International Business Cycles on the UK — a Bayesian Smooth Transition VAR By Deborah Gefang; Rodney Strachan
  16. The Location of Foreign Direct Investment in the Central and Eastern European Countries: A Nested Logit and Multilevel Data Approach By Simona Rasciute; Eric J. Pentecost
  17. Substitution between domestic and foreign currency loans in Central Europe. Do central banks matter? By Brzoza-Brzezina, Michał; Chmielewski, Tomasz; Niedźwiedzińska, Joanna
  18. Energy Efficiency and Renewable Energy Supply for the G-7 Countries, With Emphasis on Germany By Jon Strand
  19. Greek companies exporting to South-East European markets By Panagiotis Liargovas; Konstantinos Skandalis
  20. Spillovers to Ireland By Daniel Kanda
  21. Evaluating the impact of the French tax credit on the employment rate of women By Elena Stancanelli
  22. Competition and innovative intentions: A study of Dutch SMEs By Jeroen de Jong
  23. Early Retirement in Germany: Loss of income and lifetime? By Stephan Kühntopf; Thusnelda Tivig
  24. The aggregate labor market effects of the Swedish knowledge lift program By Albrecht, James; van den Berg, Gerard J; Vroman, Susan
  26. Empirical evidences on risk aversion for individual Romanian Capital Market investors By Paun, Cristian; Musetescu, Radu; Brasoveanu, Iulian; Draghici, Alina
  27. Size, growth and bank dynamics By Enrique Benito
  28. Qualité et efficience de l'école primaire française : éléments de comparaisons spatiales et temporelles By Elisaveta Bydanova; Alain Mingat; Bruno Suchaut
  29. Foreign Ownership and Economic Performance in Italy: Not all is Cherry-Picking!. By Rosario Crinò; Fabrizio Onida
  30. Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data By Thorsten Schank; Claus Schnabel; Joachim Wagner

  1. By: Philippe Moutot (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Alexander Jung (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Francesco Paolo Mongelli (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: The ECB’s monetary policy has received considerable attention in recent years. This is less the case, however, for its regular monetary policy preparation and decision-making process. This paper reviews how the factors usually considered as critical for the success of a central banking system and the federal nature of the Eurosystem are intertwined with its overall design and the functioning of its committee architecture. In particular, it examines the procedures for preparing monetary policy decisions and the role of the decision-making bodies and the committees therein. We suggest that technical committees, involving all national central banks (NCBs), usefully contribute to the regular processing of a vast amount of economic, financial and monetary data, as well as to the consensus building at the level of the Governing Council. A federal organisational structure, including a two-tier committee structure with the Executive Board taking the lead in preparing the monetary policy decisions and the Governing Council in charge of the decisions with collective responsibility for them, as well as committee work at the various hierarchical levels, contributes to the efficiency of the ECB’s monetary policy decision-making, and thereby facilitates the maintenance of price stability in the euro area. A fully-fledged committee structure has also contributed to the smooth integration of non-euro area Member States into the Eurosystem’s monetary policy decision-making process. JEL Classification: E42, E58, F33, F42.
    Keywords: European economic and monetary integration, monetary arrangements, central banks and their policies.
    Date: 2008–01
  2. By: Christian Growitsch (Halle Institute for Economic Research); Heike Wetzel (Institute of Economics, Leuphana University of Lüneburg)
    Abstract: In this paper, we conduct a pan-European effciency analysis to investigate the performance of European railways with a particular focus on economies of vertical integration. We test the hypothesis that integrated railways realize economies of scope and, thus, produce railway services with a higher level of effciency. To determine whether joint or separate production is more effcient, we apply a Data Envelopment Analysis super-effciency bootstrapping model which relates the ef- ficiency for integrated production to a reference set consisting of separated firms which use a dierent production technology. We find that for a majority of European railways economies of scope exist.
    Keywords: Efficiency, Vertical Integraton, Railway Industry
    JEL: L22 L43 L92
    Date: 2007–12
  3. By: António Afonso; Christophe Rault
    Abstract: We apply recent panel cointegration methods to a structural equation between government expenditure and revenue. Allowing for multiple endogenous breaks and after computing appropriate bootstrap critical values, we conclude for fiscal sustainability in the overall EU15 panel.
    Keywords: fiscal sustainability; EU; panel cointegration.
    JEL: C23 E62 H62
    Date: 2008–01
  4. By: Gilles Dufrénot (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Roseline Joyeux (Macquarie University - Macquarie University); Anne Peguin-Feissolle (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579)
    Abstract: In the literature, two important views concerning the conduct of monetary policy are construed. One view is that the central banks’ monetary policy must be credible if the authorities want to curb inflation. A second view is that central banks set their monetary policy by using all the information relevant for inflation and output projections. In Europe, a controversy has emerged about the role of monetary aggregates as useful indicators of future inflation and output. On one hand, evidence in favour of the usefulness of nominal monetary aggregates as good predictors is provided by the literature. On the other hand, empirical evidence in favour of real money indicators is found. The purpose of this paper is to contribute to the ongoing debate on the role of money aggregates in the setting of monetary policy. The question we are interested in is whether the real money gap contains more information about future inflation in Europe, than an indicator based on the growth rate of nominal money. We use a panel data framework instead of the usual time series methods on aggregate Euro data.
    Keywords: monetary policy ; inflation ; panel data
    Date: 2008–01–18
  5. By: Barry Eichengreen
    Abstract: The thesis of this paper is that there is no historical precedent for Europe's monetary union (EMU). While it is possible to point to similar historical experiences, the most obvious of which were in the 19th century, occurred in Europe, and had "union" as part of their names, EMU differs from these earlier monetary unions. The closer one looks the more uncomfortable one becomes with the effort to draw parallels on the basis of historical experience. It is argued that efforts to draw parallels between EMU and monetary unions past are more likely to mislead than to offer useful insights. Where history is useful is not in drawing parallels but in pinpointing differences. It is useful for highlighting what is distinctive about EMU.
    JEL: F15 N14
    Date: 2008–01
  6. By: Éloi Laurent; Jacques Le Cacheux
    Date: 2007
  7. By: Irène Andreou; Gilles Dufrénot; Alain Sand-Zantman; Aleksandra Zdzienicka-Durand
    Date: 2007
  8. By: de Nardis, Sergio; De Santis, Roberta; Vicarelli, Claudio
    Abstract: In this paper we study the effect of the single currency across industries for euro area members. This analysis may help to shed light on the main factors influencing the euro effect on trade flows. We intend to verify whether these factors are specific to individual sectors and/or countries or common to the entire euro area. We use a dynamic specification of an augmented gravity equation. Following the most recent econometric literature, we apply a “System GMM” dynamic panel data estimator (Blundell and Bond, 1998) to avoid inconsistency and biases in the estimates, and introduce controls for heterogeneity. Our preliminary results indicate some heterogeneity at country level. Despite statistically pro-trade effects in the majority of the EMU members, at sectoral level there are some countries in which the impact of the euro has been negative. The pro-trade effects are mainly concentrated in scale intensive industries. Industrial specialization and location of these industries, together with other factors (i.e. differences in factor endowments, product regulations across countries), may have determined “the winners and the losers” in the monetary integration process. These preliminary findings are in line with those of the few other studies on this issue. In particular, this recent literature seems consistent with Baldwin’s (2006) “new good” hypothesis. However, in our estimates the magnitude of these effects are lower, probably because of our empirical strategy. Moreover, the sector/country analysis points out that other specific factors have been in place in shaping differently the euro effect on trade.
    Keywords: International trade, currency unions, gravity models, dynamic panel data, Blundell-Bond estimates
    JEL: C33 F14 F15 F33 F4
    Date: 2008
  9. By: Sarah Guillou (Observatoire Français des Conjonctures Économiques); Stefano Schiavo (Observatoire Français des Conjonctures Économiques)
    Date: 2007
  10. By: Corsini, Lorenzo (University of Pisa)
    Abstract: We study the evolution of the wage differentials between graduate (skilled) and non graduate (unskilled) workers in several european countries in the period that range from the beginning of the nineties to the beginning of this century. The starting point is that all european countries show an increasing relative supply of skilled workers but different behaviours of the wage differentials. The standard explanation for non decreasing differentials in the face of rising relative supply is that technological progress is skill biased. This in turn would imply that technological progress differs in its magnitude and effects across Europe. Our finding shows that what is relevant in the determination of the differentials it is the pace and intensity at which technological progress takes place. We turn then to institutions and we build a model of imperfect competition and wage bargaining which relate the differentials to the technological progress but also to several labour market institutions. The empirical analysis on this aspect reveal that employment rates of different groups as well as the union density and the generosity of unemployment benefits are indeed important and help in explaining the evolution of the wage differentials between skilled and unskilled workers.
    Keywords: Wage Differentials; Technological Changes ; Labor Market Institutions
    JEL: J31 J51
    Date: 2008–01
  11. By: Andrea Gavosto; Guido Ponte; Carla Scaglioni
    Abstract: The current regulatory debate in the telecommunications industry in Europe and elsewhere is dominated by the issue of if and how to regulate next generation networks (NGN) which operators plan to roll out in the near future. The crucial issue is whether an extension of current regulatory obligations onto future networks would hamper the investment by large European operators. The paper applies a real option model to explain the investment decision in next generation networks. One important result of the model is that regulation affects the investment decision only in the initial period when uncertainty is still very high. The real option model has been calibrated with parameters drawn from real data for a new entrant and from educated estimates for an established operator. Four different regulatory regimes and their impact on the timing of the investments have been simulated: a temporary regulatory holiday is shown to be an effective regulatory tool in order to induce immediate investments.
    Keywords: real options; telecommunication; regulated industries; Next Generation Networks.
    JEL: L51 D81 G11 G35
    Date: 2007
  12. By: Richard Green
    Abstract: The energy utilities – gas and electricity companies – were traditionally regulated monopolies, but once the EU decided to liberalise them, competition policy became applicable. The EU has used a series of Directives to set out the framework for a market-led energy sector, with third party access to the transmission and distribution networks, and a choice of retailer for all customers, although these depend upon the agreement of Member States. The Commission has been able to take action directly when ruling on mergers in the sector, and in several cases has obtained concessions that should increase the level of competition as a condition for allowing a merger. This is a reactive approach, however, and problems remain in the sector, as shown by the 2005-7 sector enquiry. The proposed third energy package may remove some of the barriers to effective liberalisation.
    Keywords: Competition Policy, mergers, electricity, gas, liberalisation
    JEL: L43 L94 L95
    Date: 2007–12
  13. By: Flora Bellone; Liza Jabbour; Patrick Musso; Lionel Nesta; Stefano Schiavo
    Abstract: We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: Exporters are more productive than non-exporters when observed and unobserved heterogeneity are controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is strong evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find that countries that are more open and have more effective government report higher productivity premia. However, the level of development per se does not appear to be an explanation for the observed cross-country differences.
    Keywords: Exports, productivity, micro data, international comparison
    JEL: F14 D21
    Date: 2007
  14. By: Francesco d’Avack; Sandrine Levasseur
    Date: 2007
  15. By: Deborah Gefang; Rodney Strachan
    Abstract: Employing a Bayesian approach, we investigate the impact of international business cycles on the UK economy in the context of a smooth transition VAR. We find that British business cycle is asymmetrically influenced by the US, France and Germany. Overall, positive and negative shocks generating in the US or France affect the UK in the same directions of the shock. Yet, a shock emanating from Germany always exerts negative accumulative effects on the UK. More strikingly, a positive shock arising from Germany negatively affects UK output growth more than a negative shock from Germany of the same size. These results suggest that the appropriate UK economic policy depends upon the origin, size and direction of the external shocks.
    Keywords: International business cycle; Bayesian; smooth transition vector autoregression model
    JEL: C11 C32 C52 E32 F42
    Date: 2008–01
  16. By: Simona Rasciute (Dept of Economics, Loughborough University); Eric J. Pentecost (Dept of Economics, Loughborough University)
    Abstract: This paper generalizes the existing empirical literature on the determinants of the location of FDI, using a nested logit (NL) model and a novel three-level dataset to examine the factors explaining 1,108 foreign investment location decisions into 13 Central and Eastern European countries (CEECs) between 1997 and 2007. The NL model relaxes the multinomial logit model assumption of independence of identically distributed error terms and allows for testing if national boundaries affect the investment location choices of MNEs in the CEECs. In contrast to the existing empirical literature on the investment location choices, the Heteroskedastic Extreme Value model is used as a tool to reveal an appropriate nesting structure. The highly significant empirical results, based on a general underlying economic model of imperfect competition, show that the responsiveness of FDI in the CEECs to country-level variables differs both across sectors and across firms of different sizes and profitability. Hence the results of previous studies that used only country-level data or only industry- and firm-level data may be misleading.
    Keywords: Nested logit model, foreign direct investment, multi-level data, heteroskedastic extreme value model
    JEL: F23 P33
    Date: 2007–12
  17. By: Brzoza-Brzezina, Michał; Chmielewski, Tomasz; Niedźwiedzińska, Joanna
    Abstract: In this paper we ask a question about the impact of monetary policy on total bank lending in the presence of a developed market for foreign currency denominated loans and potential substitutability between domestic and foreign currency loans. Our results, based on a panel of three biggest Central European countries (the Czech Republic, Hungary and Poland) confirm the existence of the substitution effect between these loans. Restrictive monetary policy leads to a decrease in domestic currency lending but simultaneously accelerates foreign currency denominated loans. This makes the central bank's job harder with respect to providing both, monetary and financial stability.
    Keywords: domestic and foreign currency loans; substitution; monetary policy; financial stability; Central Europe
    JEL: E58 E52 E44
    Date: 2007
  18. By: Jon Strand
    Abstract: This paper discusses structure, impact, costs, and efficiency of renewable energy supply in the eight largest advanced economies (the G-7 plus Spain), with focus on Germany. Renewables production costs are compared to benefits, defined as reductions in net carbon emissions; technological innovation, and increased energy security. The latter part of the paper centers on Germany, the main European producer of non-traditional renewables. We question whether the level of subsidies can be justified, relative to other means to increase energy security and reduce carbon emissions. We also find an excessive emphasis on current productive activity, relative to development of new technologies.
    Keywords: Energy , Group of seven , Germany , Spain , Energy policy , Energy taxes ,
    Date: 2008–01–02
  19. By: Panagiotis Liargovas; Konstantinos Skandalis
    Abstract: The purpose of this study is twofold. First, to conceptualize various internal, external and strategic factors explaining the motivation and the marketing strategy of Greek exporting firms based on a strategic management model. Second, to empirically test this model in the case of Greek exporting firms to South-East European markets. The analysis is accomplished through the observed behaviour of 41 listed firms in the Athens stock exchange involved in making exports to South-East Europe. It is based on a questionnaire which has provided several insights to export motivations and export marketing strategy elements. It uses principal component factor analysis technique in order to investigate common factors that might explain underlying beliefs about the perceived variables.
    Keywords: Export marketing, export motives, Greece, South-East European markets, factor analysis
    Date: 2008
  20. By: Daniel Kanda
    Abstract: This paper discusses Ireland's trade and financial linkages with key partner countries, and uses a vector autoregression to examine the impact of shocks to partner country GDP and shocks to Irish competitiveness on Irish GDP. Two main findings are that shocks to U.S. GDP have a larger impact on Irish GDP than shocks to the euro area or the U.K. Also, the share of the variance of Irish GDP explained by shocks to competitiveness rises with the forecast horizon, suggesting that past erosion of competitiveness may yet have a more substantial impact on economic activity.
    Keywords: Trade , Ireland , External shocks ,
    Date: 2008–01–10
  21. By: Elena Stancanelli (Observatoire Français des Conjonctures Économiques)
    Abstract: This paper investigates the employment impact of a new tax-credit programme that was put in place in France in 2001. We study the introduction of both this measure and a later reform in 2004 that made the tax credit cashable in advance upon returning to work. We adopt a non-experimental evaluation method. The data for the analysis are drawn from the French Labour Force Surveys over the period 1999 to 2005. Due to the break in the French LFS series in 2003, we analyze separately the two periods 1999-2002 and 2003-05, as well as pooling the data over 1999-2005, under particular assumptions. We find evidence of a significantly negative employment effect for married women, with a reduction of about 3.2-3.4 percentage points in their employment rate after the introduction of the policy. The impact is positive and weakly significant for cohabiting women, while positive but statistically insignificant for lone mothers. We do not find any evidence of an additional effect of the tax credit due to the cashable advance credit reform of 2004.
    Keywords: policy evaluation; difference-in-differences estimator; labour supply
    JEL: C34 I38 J21
    Date: 2007
  22. By: Jeroen de Jong
    Abstract: This paper explores the complex relationship between competition and innovation. Traditional measures of competition using industry statistics are often challenged andfound wanting. This paper distinguishes between three types of competitive forces: internal rivalry among incumbent firms in an industry, bargaining power of suppliers,and bargaining power of buyers. Using survey data from 2,281 Dutch firms, we apply new perception-based measures for these competitive forces to explore how competition relates to firms innovative intentions. We also investigate the influence of innovation strategy as a contingency variable. Results show that specific innovative intentions, i.e. to invest in product and process innovation, are related to different competitive forces. Process innovation is correlated with the bargaining power of suppliers, while intentions to invest in product innovation are associated with buyer power. Finally, intended product innovation is related to internal rivalry, but only when firms have no innovation strategy.
    Date: 2007–05–30
  23. By: Stephan Kühntopf (University of Rostock and Rostock Centre for the Study of Demographic Change, Germany); Thusnelda Tivig (University of Rostock and Rostock Centre for the Study of Demographic Change, Germany)
    Abstract: The public pension system in Germany allows early retirement albeit at the cost of pension deductions. Deductions are calculated under the assumption that life expectancy is indepen-dent of the age of retirement and apply equally for men and women. The "fair" amount of deductions is currently debated, the general feeling being that they are too low. In this paper we show that remaining lifetime and thus the perpetuity period vary with the age of retirement. In a survival analysis using micro data from the German Pension Insurance, we find that remaining life expectancy of men at age 65 receiving old-age pensions with age 60 to 66 is up to 1.9 years higher if retirement occurred later. For women, instead, life expec-tancy is almost independent of retirement age. Extending the analysis to invalidity pensioners (they receive pensions before the age of 60), we find that men and women reaching the age of 65 have a more than 3 years lower remaining life expectancy than old-age pensioners on average. Many other variables, like residence (West and East Germany), lifetime wage in-come and number of children are considered, too. In a simple model we finally calculate and compare actuarial deductions under the alternative assumptions of constant and age-of-retirement dependent life expectancy. The main conclusion is that deductions currently in law are too high for very early retirees (below age 63) and too low for all others.
    Keywords: Life expectancy, retirement age, early retirement, pension deductions
    JEL: H55 J14 J26
    Date: 2008
  24. By: Albrecht, James (Department of Economics, Georgetown University); van den Berg, Gerard J (IFAU - Institute for Labour Market Policy Evaluation); Vroman, Susan (Department of Economics, Georgetown University)
    Abstract: The Swedish adult education program known as the Knowledge Lift (1997-2002) was unprecedented in its size and scope, aiming to raise the skill level of large numbers of low-skill workers. This paper evaluates the potential effects of this program on aggregate labor market outcomes. This is done by calibrating an equilibrium search model with heterogeneous worker skills using pre-program data and then forecasting the program impacts. Our calibrations suggest that the equilibrium treatment effects were positive - wages are predicted to increase, as are the employment rates of the treated. The equilibrium effects magnify the partial effects by a factor 1.5 to 2. This is due to the increase in demand for skills that is triggered by the increase in its supply.
    Keywords: Job search; policy evaluation; wages; unemployment; Swedish labor market; calibration; adult education; equilibrium effects
    JEL: I21
    Date: 2007–12–20
  25. By: Elena Casquel (Universidad Miguel Hernández); Ezequiel Uriel Jiménez (Instituto Valenciano de Investigaciones Económicas)
    Abstract: The aim of this paper is to study the impact of family background and labor market conditions on educational attainment of Spanish youngsters using a new sample of data drawn for the first seven waves of the European Community Household Panel (ECHP). Our results show that family background variables are strong determinants of the number of young adults that attained post-compulsory education. More specifically, we obtain that children¿s educational achievement is strongly related to parental education. Moreover, the results suggest that unemployment prospects aspect the demand for education through diminishing costs more than increasing returns to education. It could indicate that unemployment rate push people to enroll in tertiary education. El objetivo de este trabajo es analizar el impacto del entorno familiar y las condiciones del mercado laboral en las decisiones de educación de los jóvenes españoles. Para ello, vamos a usar una nueva muestra de datos obtenida de las primeras siete olas del panel de hogares europeo (phogue). Nuestros resultados muestran que las variables familiares tienen un fuerte impacto en el número de jóvenes que alcanzan educación superior. En concreto, obtenemos que la educación de los padres juega un papel muy importante. Además, nuestros resultados sugieren que las tasas de desempleo afectan a la decisión educativa disminuyendo los costes educativos pero no se observa evidencia de que incrementen los rendimientos de la educación. Estos resultados indican que las altas tasas de desempleo fomentan que los jóvenes realicen estudios universitarios.
    Keywords: decisión de educación, tasas de desempleo, probit ordenado educational attainment; family backgrounds; unemployment rate
    JEL: I2 I21
    Date: 2007–12
  26. By: Paun, Cristian; Musetescu, Radu; Brasoveanu, Iulian; Draghici, Alina
    Abstract: Risk aversion is reflected on a risk premium, which consists of an expected extra return that investors require to be compensated for the risk of holding stocks. We intend to evaluate the situation of Romania in terms of risk aversion. This study is very useful for understanding the differences between the individual investment behaviours in EU and to understand the further European market evolution taking into consideration this important variable – risk aversion.
    Keywords: risk aversion; individual investor; Romanian capital market
    JEL: G2 G11
    Date: 2007–10–15
  27. By: Enrique Benito (Banco de España)
    Abstract: This paper investigates the size distribution of the whole population of Spanish commercial, savings and cooperative banks from a dynamic perspective over the 1970 2006 period. To investigate the evolution of the size distribution, we determine whether the data satisfies the Law of Proportionate Effect (LPE) using panel unit root tests. We find that the size-growth relationship is not stable over time but changes depending on the competitive environment of banks (liberalization, deregulation and integration). When Spanish banking was highly regulated, we find that smaller banks grew faster than their larger counterparts. In recent years, however, we find that larger banks grow at the same rate or faster than smaller banks, a result that lends towards LPE acceptance. Thus, our study corroborates the conditioned nature of the size-growth relationship and the size distribution of banks, as emphasized by recent studies for the US banking system. Results imply that the size distribution of Spanish banks will become more skewed in next years, and concentration will tend to increase.
    Keywords: Size distribution, Law of proportionate effect, Panel unit root tests
    JEL: G21 L11 C23
    Date: 2008–01
  28. By: Elisaveta Bydanova (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne); Alain Mingat (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne); Bruno Suchaut (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne)
    Abstract: L’objectif principal de ce texte est de présenter des éléments factuels sur les résultats de l’école primaire française. Notre réflexion portera sur deux dimensions complémentaires, à savoir la qualité et l’efficience, celles-ci seront examinées dans une double perspective comparative (temporelle et spatiale). Dans une première partie, nous mobiliserons les données des enquêtes internationales pour apprécier les résultats des élèves français et leur évolution dans le temps sur ces 15 dernières années. La seconde partie sera consacrée aux coûts de l’enseignement primaire et plusieurs aspects seront abordés. Dans un premier temps, l’évolution des coûts au cours de ces 30 dernières années sera examinée en fonction des différents niveaux d’enseignement. Dans un second temps, une analyse des facteurs explicatifs de cette évolution sera conduite. Les comparaisons internationales seront ensuite mobilisées pour situer notre pays au plan international sur cet aspect économique. Une troisième partie traitera la question de l’efficience quantitative et qualitative de notre école primaire. Pour conclure, des hypothèses sur les causes de la situation actuelle de notre école primaire seront avancées.
    Keywords: Qualité de l'école ; Efficience ; Ecole primaire ; Comparaison internationale ; Analyse temporelle ; Coût de l'éducation ; France
    Date: 2008–01
  29. By: Rosario Crinò (Università degli Studi di Milano and CESPRI - Bocconi University, Milan, Italy.); Fabrizio Onida (CESPRI, Bocconi University, Milan, Italy.)
    Abstract: This paper studies the effects of foreign participation on economic performance in Lombardy, a Northern Italian region accounting for more than 40% of Foreign Direct Investment inflows in Italy. We employ a large database consisting of balance sheet and foreign ownership information for more than 13,000 firms and analyze different dimensions of economic performance: capital and knowledge-intensity, productivity, wages, returns to investments and financial structure. We find that foreign multinationals are more knowledge-intensive, more productive, pay higher wages and show a more solid financial structure than national firms; at the same time, foreign multinationals show lower returns to investments. Propensity score estimation results show that this difference implies a true effect from foreign participation in the manufacturing sector; in the services sector, instead, the difference in favour of multinationals is mostly accounted for by a differential pattern of industry location between the two types of firms, by the larger size of multinationals and by the likely tendency of the latter to invest in already high-performing national firms.
    Keywords: Multinational Firms, Performance Indicators, Propensity Score Estimation
    JEL: F1 F2
    Date: 2007–11
  30. By: Thorsten Schank (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg); Claus Schnabel (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg); Joachim Wagner (Institute of Economics, Leuphana University of Lüneburg)
    Abstract: ABSTRACT: While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer-employee panel data we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.
    Keywords: exports; wages; exporter wage premium; Germany
    JEL: F10 D21 J31
    Date: 2008–01
  31. By: Eric Severin (SAMOS - Statistique Appliquée et MOdélisation Stochastique - Université Panthéon-Sorbonne - Paris I, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Marie Christine Deghaye-Filareto (Centre Universitaire de la citadelle - Université du Littoral Côte d'Opale)
    Abstract: The question of leasing credit as a substitute or complement of a banking loan has still not been resolved in the financial literature. As a continuation of these arguments, the objective of this article is, on the one hand, to determine the characteristics of firms using leasing credit and on the other hand, to better understand the relationship between leasing and credit rationing. Firstly, our results suggest that SME use leasing all the more the leasing so when they are young, leveraged, less solvent and that they present an small size and an important failure probability. Thus, leasing pushes back the limits of banking debt for firms that have no access to it. Secondly, our results suggest a strong and significant relationship between credit rationing and the use of leasing. In this framework the latter appears to be a last resort financing.
    Keywords: Leasing, credit rationing, SME, Self organising maps (SOM)
    Date: 2007–02

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