nep-eec New Economics Papers
on European Economics
Issue of 2008‒09‒20
twenty-two papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Market Reaction to the Adoption of IFRS in Europe By Christopher S. Armstrong; Mary E. Barth; Alan D. Jagolinzer; Edward J. Riedl
  2. Non-linear adjustment of import prices in the European Union By Campa, Jose Manuel; Gonzalez Minguez, Jose M; Sebastia Barriel, Maria
  3. Short-term interest rate futures as monetary policy forecasts By Giuseppe Ferrero; Andrea Nobili
  4. Testing a DSGE model of the EU using indirect inference By David Meenagh; Patrick Minford; Michael Wickens
  5. Gender-Specific Effects of Unemployment on Family Formation : A Cross-National Perspective By Christian Schmitt
  6. Volatility transmission and volatility impulse response functions in European electricity forward markets By Yannick LE PEN; Benoît SEVI
  7. WP n. 15 - Measuring Well-Being differences across EU Countries. A Multidimensional Analysis of Income, Housing, Health, and Education By Elisabetta Croci Angelini; Alessandra Michelangeli
  8. Why does the amount of income redistribution differ between United States and Europe? The Janus face of Switzerland By Sule Akkoyunlu; Ilja Neustadt; Peter Zweifel
  9. The Effects of Labor Market Conditions on Working Time: the US-EU Experience By Claudio Michelacci; Josep Pijoan-Mas
  10. Consequences of Voluntary and Mandatory Fair Value Accounting: Evidence Surrounding IFRS Adoption in the EU Real Estate Industry By Karl A. Muller; Edward J. Riedl; Thorsten Sellhorn
  11. Comparing Aggregate Investment Returns in Privately Managed Pension Funds: An Initial Assessment By Waldo Tapia
  12. What does it Mean Conceptually that Universities Compete? By Deiaco, Enrico; Homén, Magnus; McKelvey, Maureen
  13. Europeanisation Strategy of Chinese Companies: Its Perils and Promises By Filippov, Sergey; Saebi, Tina
  14. Do Danes and Italians Rate Life Satisfaction in the Same Way? Using Vignettes to Correct for Individual-Specific Scale Biases. By Viola Angelini, Danilo Cavapozzi, Luca Corazzini, Omar Paccagnella.
  15. What happens when the migration barriers for 10 new EU member states already fall in 2009? First estimates By Tausch, Arno
  16. Financial Geographies and Emerging Markets in Europe By Karreman, B.
  17. Value-at-Risk on Central and Eastern European Stock Markets: An Empirical Investigation Using GARCH Models By Vít Bubák
  18. Does Finland Suffer from Brain Drain? By Edvard Johansson
  19. Training, Job Satisfaction and Workplace Performance in Britain: Evidence from WERS 2004 By Jones, Melanie K.; Jones, Richard J.; Latreille, Paul L.; Sloane, Peter J.
  20. The use of permanent contracts across Spanish regions: Do regional wage subsidies work? By Yolanda F. Rebollo; J. Ignacio Pérez
  21. The cyclicality of mark-ups and profit margins for the United Kingdom: some new evidence By Macallan, Clare; Millard, Stephen; Parker, Miles
  22. Likelihood of Succession and Farmers’ Attitudes: Evidence from a Survey in Germany, the United Kingdom and Portugal By Miguel Sottomayor; Richard Tranter; Leonardo Costa

  1. By: Christopher S. Armstrong (The Wharton School, University of Pennsylvania); Mary E. Barth (Graduate School of Business, Stanford University); Alan D. Jagolinzer (Graduate School of Business, Stanford University); Edward J. Riedl (Harvard Business School, Accounting and Management Unit)
    Abstract: This study examines the European stock market reaction to sixteen events associated with the adoption of International Financial Reporting Standards (IFRS) in Europe. European IFRS adoption represented a major milestone towards financial reporting convergence yet spurred controversy reaching the highest levels of government. We find a more positive reaction for firms with lower quality pre-adoption information, which is more pronounced in banks, and with higher pre-adoption information asymmetry, consistent with investors expecting net information quality benefits from IFRS adoption. We also find that the reaction is less positive for firms domiciled in code law countries, consistent with investors' concerns over enforcement of IFRS in those countries. Finally, we find a positive reaction to IFRS adoption events for firms with high quality pre-adoption information, consistent with investors expecting net convergence benefits from IFRS adoption. Overall, the findings suggest that investors in European firms perceived net benefits associated with IFRS adoption.
    Keywords: IFRS, IAS 39, Convergence, Europe, Event Study
    JEL: M41 G15 G38
    Date: 2008–09
  2. By: Campa, Jose Manuel (IESE Business School); Gonzalez Minguez, Jose M (Banco de Espana); Sebastia Barriel, Maria (Bank of England)
    Abstract: This paper focuses on the non-linear adjustment of import prices in national currency to shocks in exchange rates and foreign prices measured in the exporters' currency of products originating outside the euro area and imported into European Union countries (EU-15). The paper looks at three different types of non-linearities: (a) non-proportional adjustment (the size of the adjustment grows more than proportionally with the size of the misalignments), (b) asymmetric adjustment to cost-increasing and cost-decreasing shocks, and (c) the existence of thresholds in the size of misalignments below which no adjustment takes place. There is evidence of more than proportional adjustment towards long-run equilibrium in manufacturing industries. In these industries, the adjustment is faster the further away current import prices are from their implied long-run equilibrium. In contrast, a proportional linear adjustment cannot be rejected for some other imports (especially within agricultural and commodity imports). There is also strong evidence of asymmetry in the adjustment to long-run equilibrium. Deviations from long-run equilibrium due to exchange rate appreciations of the home currency result in a faster adjustment than those caused by a home currency depreciation. Finally, we also find that adjustment takes place in the industries in our sample only when deviations are above certain thresholds, and that these thresholds tend to be somewhat smaller for manufacturing industries than for commodities.
    Keywords: Exchange rate adjustment; European Union; monetary union.
    JEL: F31 F36 F42
    Date: 2008–04
  3. By: Giuseppe Ferrero (Bank of Italy, Economics and International Relations); Andrea Nobili (Bank of Italy, Economics and International Relations)
    Abstract: The prices of futures contracts on short-term interest rates are commonly used by central banks to gauge market expectations concerning monetary policy decisions. Excess returns - the difference between futures rates and the realized rates - are positive, on average, and statistically significant, both in the euro area and in the United States. We find that these biases are significantly related to the business cycle only in the United States. Moreover, the sign and the significance of the estimated relationships with business cycle indicators are unstable over time. Breaking the excess returns down into risk premium and forecast error components, we find that risk premia are counter-cyclical in both areas. On the contrary, ex-post prediction errors, which represent the greater part of excess returns at longer horizons in both areas, are correlated with the business cycle (negatively) only in the United States.
    Keywords: futures rates, monetary policy, risk-premium
    JEL: E43 E44 E52
    Date: 2008–06
  4. By: David Meenagh; Patrick Minford; Michael Wickens
    Abstract: We use the method of indirect inference, using the bootstrap, to test the Smets and Wouters model of the EU against a VAR auxiliary equation describing their data; the test is based on the Wald statistic. We find that their model generates excessive variance compared with the data. But their model passes the Wald test easily if the errors have the properties assumed by SW but scaled down. We compare a New Classical version of the model which also passes the test easily if error properties are chosen using New Classical priors (notably excluding shocks to preferences). Both versions have (different) difficulties fitting the data if the actual error properties are used.
    Date: 2008–09
  5. By: Christian Schmitt
    Abstract: This paper investigates the impact of unemployment on the propensity to start a family. Unemployment is accompanied by bad occupational prospects and impending economic deprivation, placing the well-being of a future family at risk. I analyze unemployment at the intersection of state-dependence and the reduced opportunity costs of parenthood, distinguishing between men and women across a set of welfare states. Using micro-data from the European Community Household Panel (ECHP), I apply event history methods to analyze longitudinal samples of first-birth transitions in France, Finland, Germany, and the UK (1994-2001). The results highlight spurious negative effects of unemployment on family formation among men, which can be attributed to the lack of breadwinner capabilities in the inability to financially support a family. Women, in contrast, show positive effects of unemployment on the propensity to have a first child in all countries except France. These effects prevail even after controlling for labour market and income-related factors. The findings are pronounced in Germany and the UK where work-family conflicts are the cause of high opportunity costs of motherhood, and the gender-specific division of labour is still highly traditional. Particularly among women with a moderate and low level of education, unemployment clearly increases the likelihood to have a first child.
    Keywords: family formation, fertility, unemployment, cross-national comparison
    Date: 2008
  6. By: Yannick LE PEN; Benoît SEVI
    Abstract: Using daily data from March 2001 to June 2005, we estimate a VAR-BEKK model and find evidence of return and volatility spillovers between the German, the Dutch and the British forward electricity markets. We apply Hafner and Herwartz [2006, Journal of International Money and Finance 25, 719-740] Volatility Impulse Response Function(VIRF) to quantify the impact of shock on expected conditional volatility. We observe that a shock has a high positive impact only if its size is large compared to the current level of volatility. The impact of shocks are usually not persistent, which may be an indication of market efficiency. Finally, we estimate the density of the VIRF at different forecast horizon. These fitted distributions are asymmetric and show that extreme events are possible even if their probability is low. These results have interesting implications for market participants whose risk management policy is based on option prices which themselves depend on the volatility level.
    Keywords: volatility impulse response function, GARCH, non Gaussian distributions, electricity market, forward markets
    JEL: C3 G1 Q43
    Date: 2008
  7. By: Elisabetta Croci Angelini (Università di Macerata); Alessandra Michelangeli (University of Milan-Bicocca and Econpubblica-Bocconi University)
    Abstract: <p align="justify">This paper investigates the evolution of the inequality in well-being across di erent EU countries between 1994 and 2001 by means of a multidimensional approach focusing on income, housing, education and health. We first analyse the four dimensions each by each through an univariate Atkinson-Kolm-Sen index. Then the distributions of each attribute are aggregated into an index which takes into account the possible correlation between dimensions. Our empirical results summarize the trends in inequality for the four indicators of well-being considered both separately and jointly, over time and across countries. Since our multidimensional index depends on the values assigned to the parameters, we test the sensitivity of the trend in well-being inequality for di erent normative choices.</p>
    Keywords: Inequality indicators,European Union,Well-being,Multidimensionality
    JEL: O1 O11
    Date: 2008–06
  8. By: Sule Akkoyunlu (Socioeconomic Institute, University of Zurich); Ilja Neustadt (Socioeconomic Institute, University of Zurich); Peter Zweifel (Socioeconomic Institute, University of Zurich)
    Abstract: In this paper, the amount of income redistribution in the United States and the European Union is compared and related to economic, political, and behavioral determinants. Lying in between the two poles, Switzerland provides evidence about the relative merits of competing hypotheses. It tips the balance against economic explanation, which predicts more rather than less income redistribution in the United States compared to the EU. It only weakly supports the political model, which links proportional representation and multiparty structure (which also characterize Switzerland) to redistribution; yet the Swiss share of transfers in the GDP is low. Behavioral explanations receive good deal of support from the case of Switzerland, a country that shares with the United States the belief that hard work rather than luck, birth, connections, and corruption determine wealth. In this way, the Janus face of Switzerland may help to explain the difference in the amount of U.S. and EU income redistribution.
    Keywords: Redistribution, Income Mobility, Political Economy, Beliefs, Reciprocity, Ethnicity
    JEL: D31 D63 D64 H53 I31
    Date: 2008–09
  9. By: Claudio Michelacci (CEMFI and CEPR, Spain and The Rimini Centre for Economic Analysis, Italy); Josep Pijoan-Mas (CEMFI and CEPR, Spain)
    Abstract: We consider a labor market search model where, by working longer hours, individuals acquire greater skills and thereby obtain better jobs. We show that job inequality, which leads to within-skill wage differences, gives incentives to work longer hours. By contrast, a higher probability of losing jobs, a longer duration of unemployment, and in general a less tight labor market discourage working time. We show that the different evolution of labor market conditions in the US and in Continental Europe over the last three decades can quantitatively explain the diverging evolution of the number of hours worked per employee across the two sides of the Atlantic. It can also explain why the fraction of prime age male workers working very long hours has increased substantially in the US, after reverting a trend of secular decline.
    Keywords: working hours, wage inequality, unemployment, search, human capital filtering
    JEL: G31 J31 E24
    Date: 2008–01
  10. By: Karl A. Muller (Pennsylvania State University - Department of Accounting); Edward J. Riedl (Harvard Business School, Accounting and Management Unit); Thorsten Sellhorn (Ruhr-Universität Bochum)
    Abstract: We examine the causes and consequences of European real estate firms' decisions to provide investment property fair values prior to the required disclosure of this information under International Financial Reporting Standards (IFRS). We find evidence that investor demand for fair value information-reflected in more dispersed ownership-and a firm's commitment to transparency increase the likelihood of providing fair values prior to their required provision under International Accounting Standard 40 - Investment Property. We also find that firms not providing these fair values face higher information asymmetry. However, we fail to find that the relatively higher information asymmetry was reduced following mandatory adoption of IFRS. Rather, we find that differences in information asymmetry largely remain. Taken together, this evidence suggests that common adoption of fair value accounting due to the mandatory adoption of IFRS does not necessarily level the informational playing field.
    Keywords: Fair value, disclosure, IFRS, information asymmetry
    Date: 2008–08
  11. By: Waldo Tapia
    Abstract: This report presents an initial assessment of the financial performance of privately managed pension funds, both mandatory and voluntary, in Latin America and Central and Eastern Europe, as well as selected OECD countries. It provides a comparative description of private pension funds in the 23 countries included in the report, examining the value assets under management, the weight of investments in the economy and the allocation of investments among the various asset categories and financial instruments available. The report also presents a new dataset on the investment performance achieved by the privately managed pension funds, including the annual real rates of return, the annual geometric average of real returns, as well as summary statistics of these returns for all countries for the period for which data is available. <P>Comparer le rendement global des investissements des fonds de pension à gestion privée : première évaluation <BR>Ce rapport présente une première évaluation de la performance financière des fonds de pension à gestion privée, tant obligatoires que volontaires, en Amérique latine et centrale et en Europe de l‘Est, ainsi que dans certains pays de l‘OCDE. Il décrit en les comparant les fonds de pension à gestion privée dans les 23 pays considérés, examinant la valeur des actifs sous gestion, le poids des investissements dans l‘économie et la répartition des investissements entre les diverses classes d‘actifs et divers instruments financiers disponibles. Le rapport présente aussi une nouvelle série de données concernant les performances obtenues par les fonds de pension à gestion privée, à savoir notamment taux de rendement annuel réel, moyenne géométrique annuelle des rendements réels, et statistiques succinctes des rendements pour tous les pays sur la période sur laquelle les données sont disponibles.
    Keywords: pension fund, fond de pension, pension plan, investment return , defined benefit, prestation définie, defined contribution, cotisations définie, asset allocation, allocation des actives, investment regulation, asset valuation, occupational plans, personal plans, plans de pension, réglementation des investissements, rendement des investissements, valorisation des actifs, plans professionnels, plans personnels
    JEL: G23 G28
    Date: 2008–09
  12. By: Deiaco, Enrico (SISTER); Homén, Magnus (Chalmers Institute of Technology); McKelvey, Maureen (Chalmers Institute of Technology)
    Abstract: This article addresses the issue of how and why European universities are learning to compete, in a situation where the national institutional context and sectoral conditions are undergoing transformation. European universities – from top leaders, faculties, research groups and individual employees – are increasingly forced to explain to many stakeholders about how, whether, and why their scientific knowledge and educational programmes are relevant to society or not. For example, if universities are not contributing to public and private goods, why should society continue providing resources? Why should students pay for education, if the individual returns are too low? Why should companies and private foundations pay for research, if the results are not directly relevant to their goals? How can the efficiency and productivity of the university be improved – and which metrics can be used to demonstrate that those goals have been met? What are the dilemmas and trade-offs that this new competitive regime imposes on the functioning of universities and of society? These are the types of questions currently raised within universities in Continental Europe and Nordic countries, and ones that university leaders, faculty and staff will have to answer. Or else, they should raise new types of questions and perspectives about the role of the university in society.universities now face clear demands of producing immediately usefulness knowledge to students, businesses and society (enhanced amongst other by the Bologna process). The pressures on the university to quickly respond to societal and industrial demands have been more forcefully articulated in recent years. If these organizations wish to retain the traditional values of scholarship, they will need to do so, in parallel with understanding – and changing – their selection environment in the future. We focus upon the competition aspect from a Schumpeterian view, in order to draw out the logical conclusions but we do not focus upon whether those outcomes are desirable or negative. We choose this focus because we know that universities play major roles in the knowledge society, and current debates within the EU indicate that we will see additional major changes in the national institutional context and global markets. The article turns to more abstract questions, such as whether competition exists amongst universities and if so, what are the major trends and future outcomes of this shift from a social institution to a knowledge business. Thus, do universities really compete? And if so, how do they compete? And over what?
    Keywords: universities; competition
    JEL: I21 I23
    Date: 2008–09–09
  13. By: Filippov, Sergey (UNU-MERIT); Saebi, Tina (UNU-MERIT)
    Abstract: The magnitude of outward FDI from China over the recent years has been impressive. It is widely acknowledged that China's government plays an active role in encouraging its companies to go global and become multinational as they realise the value of outward FDI. The paper traces the development of China's outward direct investment policies and discusses the various motives of Chinese companies' internationalisation. More specifically, in this paper we look at the European continent as the emerging destination for Chinese outward direct investment and analyse the implication this trend has for European companies and governments.
    Keywords: E61, F23, O52
    Date: 2008
  14. By: Viola Angelini, Danilo Cavapozzi, Luca Corazzini, Omar Paccagnella.
    Abstract: Self-reported life satisfaction is highly heterogeneous across similar countries. We show that this phenomenon can by largely explained by the fact that individuals adopt different scales and benchmarks in evaluating themselves. Using a cross sectional dataset on individuals aged 50 and over in ten European countries, we compare estimates from an Ordered Probit in which life satisfaction scales are invariant across respondents with those from a Hopit model in which vignettes are used to correct for individual-specific scale biases. We find that variations in response scales explain a large part of the differences found in raw data. Moreover, the cross countries ranking in life satisfaction dramatically depends on scale biases.
    Keywords: Life satisfaction, scale biases, vignette, counterfactuals.
    JEL: C42 D12 I31 J14
  15. By: Tausch, Arno
    Abstract: With the ongoing debate in Austria on skilled workers from Eastern Europe for the Austrian labour market the question of immigration policy again is in the centre of the public debate. As the extension of transitional periods for the new MS in the field of migration from 2009 to 2011 is more and more unlikely because of the internal balance of power in the enlarged Union's Council, it must be assumed that on May 1st 2009 the transitional periods will finally end for the Austrian labour market. The author uses the latest data from the “Dublin Foundation” (EFILWC) on migration potential in Europe in conjunction with known migration destination preferences in the new MS for individual EU countries, including Austria, from earlier studies and comes to the conclusion that with an estimated 100,000 immigrants there is no reason for alarmism.
    Keywords: Labour Market; Migration; Integration
    JEL: F22 F15 J4
    Date: 2008–04
  16. By: Karreman, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This study examines the contemporary financial geographies in Central and Eastern Europe and argues how these may affect the established European finacial centre network in the future. As the development of the financial sector in Europe’s emerging markets is largely dependent on foreign investments, explicit attention is directed to determine which emerging centres exhibit sufficient power to attract multinational financial service firms. In addition, it is empirically assessed form which locations these investments are controlled. The results show a distinct spatial order of financial centres organized around three main city clusters: a ‘south-east’ cluster controlled by Athens, a ‘central-east’ cluster around Vienna and a ‘Baltics’ cluster directed from Copenhagen and Stockholm. Based on the results it is argued that these centres of control, with Vienna in particular, may enhance their competitiveness as a financial centre due to their strategic position in the growing markets of Central and Eastern Europe.
    Keywords: multinational banks;parent-subsidiary links;financial centres;city clusters;Central and Eastern Europe
    Date: 2008–09–01
  17. By: Vít Bubák (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; MSE, Université de Paris I. Panthéon-Sorbonne)
    Abstract: Using daily return data from the four major Central and Eastern European stock markets including fourteen highly liquid stocks and ATX (Vienna), PX (Prague), BUX (Budapest), and WIG20 (Warsaw) market indices, we model the value-at-risk using a set of univariate GARCH-type models. Our results show that, in both in-sample and out-of-sample value-at-risk estimations, the models based on asymmetric distribution of the error term tend to perform better or at least as well as the models based on symmetric distribution (i.e., Normal or Student) when the left tails of daily return distributions are concerned. Evaluation of the same models is less clear, however, when the right tails of the distribution of daily returns must be modelled. We suggest an asset-specific approach to selecting the correct parametric VaR model that depends not only on the risk level considered but also on the position in the underlying asset.
    Keywords: Value-at-Risk, Expected Shortfall, Backtesting
    JEL: C14 C32 C52 C53 G12
    Date: 2008–09
  18. By: Edvard Johansson
    Abstract: ABSTRACT : This paper examines the trends in immigration to and emigration from Finland during the period 1987-2006. The focus is on the “human capital content” of the migration flows, the key question being : Is Finland losing out in the international competition for highly educated individuals? International comparisons presented by the OECD give the impression that Finland perform very weakly in the global competition for talent, as the share of highly-skilled immigrants is very low. However, these comparisons are distorted by the lack of information with regard to the level of education of immigrants into Finland. It would be desirable that the Central Statistical Office could provide better information on this issue. The results of this paper indicate that Finland’s emigrants are indeed better educated than its immigrants, and that brain-drain exists to a certain degree. However, the magnitude of the brain-drain phenomenon is not very large, and there is no statistical evidence of the well-educated to emigrate would have increased over time. Although Finland’s immigrants are more poorly educated than the Finnish population at large, they are apparently better educated than immigrants to, for instance, Sweden or Denmark, owing to the disproportionately large share of immigrants from Estonia and Russia to Finland. Nevertheless, the labour market performance of Finnish immigrants is as bad as for immigrants in most Western European countries, i.e. their unemployment rate is about twice as high as that of the native population. This amounts to a serious failure of assimilation policies.
    Date: 2008–09–10
  19. By: Jones, Melanie K. (University of Wales, Swansea); Jones, Richard J. (University of Wales, Swansea); Latreille, Paul L. (University of Wales, Swansea); Sloane, Peter J. (University of Wales, Swansea)
    Abstract: This paper analyses the relationship between training, job satisfaction and workplace performance using the British 2004 Workplace Employee Relations Survey (WERS). Several measures of performance are analysed including absence, quits, financial performance, labour productivity and product quality. While there is clear evidence that training is positively associated with job satisfaction, and job satisfaction in turn is positively associated with most measures of performance, the relationship between training and performance is complex, depending on both the particular measures of training and of performance used in the analysis.
    Keywords: training, job satisfaction, absence, quits, financial performance, labour market, product quality
    JEL: J0 J2 J3
    Date: 2008–09
  20. By: Yolanda F. Rebollo (Universidad Pablo de Olavide); J. Ignacio Pérez (Centro de Estudios Andaluces)
    Abstract: This article evaluates the effectiveness of regional wage subsidies to foster permanent employment using information gathered from the “Muestra Continua de Vidas Laborales”. This dataset, which is used here for the first time as a source for evaluating Spanish labour market policy, offers a complete employment history for each individual, with no aggregation bias. The policy analyzed consists of a one-time subsidy offered by some Spanish regions for new permanent contracts signed for certain fixed-term employees and unemployed workers. Because our policy variable presents individual, regional and temporal variation, we apply a triple difference estimator to identify the average treatment effect of this policy. We conclude that the outflow into permanent employment of eligible workers improves only minimally under this policy. Nevertheless, the incidence is relatively greater for temporary workers than for unemployed ones and is also larger for younger and middle-aged female workers. lassification-JEL: J38, J68
    Keywords: Difference-in-difference-in-difference, Causal Evaluation Analysis, Regional Wage Subsidies
    Date: 2008
  21. By: Macallan, Clare (Bank of England); Millard, Stephen (Bank of England); Parker, Miles (Bank of England)
    Abstract: In this paper, we assess the cyclicality of mark-ups and profit margins within the United Kingdom, at both the aggregate and industry level. We find that the private sector labour share moves countercyclically, suggesting that the aggregate mark-up moves procyclically. This result survives when we consider more sophisticated measures of the mark-up. And this result is also supported by industry-level data. We find that the aggregate market sector profit share moves procyclically and that the cyclical behaviour of profit margins is largely homogenous across industries. Nevertheless, there is some evidence that margins moved against the cycle in the late 1990s, starting to fall in 1997, whereas GDP growth did not peak until 2000. In tandem with these cyclical movements, we also find that the market sector profit share has trended upwards since 1970, in contrast to the aggregate mark-up, which fell over the same period.
    Keywords: Mark-ups; profit margins.
    JEL: E31 L11
    Date: 2008–08
  22. By: Miguel Sottomayor (Faculdade de Economia e Gestão - Universidade Católica Portuguesa (Porto)); Richard Tranter (Centre for Agricultural Stratey - The University of Reading); Leonardo Costa (Faculdade de Economia e Gestão - Universidade Católica Portuguesa (Porto))
    Abstract: The likelihood of succession in the family farm is referred to in the literature as an influential variable for several family farm management decisions. In this paper, we investigate this relationship for a selection of farm management variables, such as the timing of farmer’s retirement, the willingness of farmers to change the current mix of activities, their readiness to adopt new farm activities, and aim their readiness to intensify production. The categorical data analyzed, mostly Likert scales, comes from a mail survey carried out in 2002 to a sample of German, British and Portuguese farmers, amounting to approximately 4500 valid responses. Statistical association between the variables was studied computing the Chi2 statistic and testing the null hypothesis of no association between pairs of variables. The main conclusions were that the likelihood of succession was positively related to the length of active farmers’ live, to the farmer’s adoption of new activities (only for the Portuguese respondents), and to farmer’s willingness to intensify production. It was also found that the likelihood of succession was negatively related to the intention of leaving farmland idle. On the other hand, no empirical evidence was found of a statistical significant relationship between likelihood of succession and readiness to change the mix of farm activities.
    Keywords: Family Farming; Succession; Agricultural Policy
    JEL: Q15 Q18
    Date: 2008–09

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