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on European Economics |
| By: | Sassi, Maria |
| Abstract: | Economic and agricultural convergence across the EU regions has for a long time attracted the attention of economists and more so in the recent decade following the EU enlargement. Empirical contributions have referred explicitly or implicitly to the Solow’s model of economic growth testing absolute and conditional b-convergence. The recent literature suggests that the prevailing neoclassical and sectoral approach is not suitable to face the implication of structural change on economic convergence whose understanding is key within the current process of significant marginalization of agriculture and partly of industry in favour of the service sector. In this context the aim of the paper is the understanding the size and evolution of this change, the way in which it has affected aggregate economic convergence and if the agricultural sector has influenced the process despite its small and decreasing contribution to total GDP comparing the results from the neoclassical and Paci, Pigliaru approach |
| Keywords: | Agricultural and Food Policy, International Development, |
| Date: | 2008–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aes007:7961&r=eec |
| By: | Andrés Rodríguez-Pose (London School of Economics); Anne Krøijer (London School of Economics) |
| Abstract: | The majority of the literature on fiscal decentralization has tended to stress that the greater capacity of decentralized governments to tailor policies to local preferences and to be innovative in the provision of policies and public services, the greater the potential for economic efficiency and growth. There is, however, little empirical evidence to substantiate this claim. In this paper we examine, using a panel data approach with dynamic effects, the relationship between the level of fiscal decentralization and economic growth rates across 16 Central and Eastern European countries over the 1990-2004 period. Our findings suggest that, contrary to the majority view, there is a significant negative relationship between two out of three fiscal decentralization indicators included in the analysis and economic growth. However, the use of different time lags allows us to nuance this negative view and show that long term effects vary depending on the type of decentralization undertaken in each of the countries considered. While expenditure at and transfers to subnational tiers of government are negatively correlated with economic growth, taxes assigned at the subnational level evolve from having significantly negative to significantly positive correlation with the national growth rate. This supports the view that subnational governments with their own revenue source respond better to local demands and promote greater economic efficiency |
| Keywords: | fiscal decentralization; economic growth; efficiency; devolution; Central and Eastern Europe |
| Date: | 2008–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2008-08&r=eec |
| By: | Yvonne Schindele (Friedrich Schiller University Jena, School of Economics and Business Administration); Antje Weyh (Institute for Employment Research, IAB regional Saxony) |
| Abstract: | Based on an improved and extended database, the Establishment History Panel, we extend the analysis of Fritsch & Weyh (2006) by investigating the development of employment in German start-up cohorts for the period 1976 to 2004. We conïfirm the typical pattern of an initial increasing and then soon decreasing number of employees in start-up cohorts. Furthermore, we provide some of the first evidence for the "liability of aging" phenomena in Germany. Older firms face a relatively high risk of failure. Although only the largest 25% of the surviving entries grow in terms of employment, after 25 years the number of employees in these relatively large businesses strongly declines. |
| Keywords: | Employment change, new firms, start-up cohorts, liability of agibg |
| JEL: | D21 L10 L26 L29 M13 |
| Date: | 2008–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-076&r=eec |
| By: | Arjan Lejour |
| Abstract: | Innovation is a policy area in which the European Union (EU) has the competence to support, coordinate and supplement Member States’ policies according to the new Lisbon Treaty (2007). The Member States (MS) have the primacy in this area and the principles of subsidiarity and proportionality are applicable to decide whether EU support, coordination or supplementation of MS policies is justified.<BR> This paper presents a detailed subsidiarity test. It is applied to three innovation support measures as part of the Entrepreneurship and Innovation Programme of the Competitiveness and Innovation Framework Programme of the European Commission. These measures are access to finance for the start-ups and growth of SMEs and investment in innovation activities, networks in support of business and innovation-community grants (new Enterprise Europe Network), and the Intellectual Property Rights Helpdesk. |
| Keywords: | innovation policy; subsidiarity; European Union |
| JEL: | O38 H77 H87 F15 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:memodm:208&r=eec |
| By: | Christian Dustmann; Nikolaos Theodoropoulos |
| Abstract: | This paper investigates educational attainment and economic behaviour of ethnic minority immigrants and their children in Britain. Despite their strong educational achievements, ethnic minority immigrants and their descendants exhibit lower employment probabilities than their white native born peers. Although unconditional wages of British born ethnic minorities appear to be slightly higher than those of their white native born peers, their wages would be considerably lower if they had the same characteristics and regional allocation. Differences in wage offer distributions hardly account for the employment differences of British born ethnic minorities. Further, British born ethnic minorities have lower employment propensities for the same wages than native born whites. We examine possible explanations for these gaps. |
| Keywords: | Ethnic Minorities/Immigrants, Education, Employment, Wages |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:7-2008&r=eec |
| By: | Gilles Duranton (University of Toronto); Andrés Rodríguez-Pose (London School of Economics); Richard Sandall (London School of Economics) |
| Abstract: | This paper examines the association between one of the most basic institutional forms, the family, and a series of demographic, educational, social, and economic indicators across regions in Europe. Using Emmanuel Todd’s classification of medieval European family systems, we identify potential links between family types and regional disparities in household size, educational attainment, social capital, labor participation, sectoral structure, wealth, and inequality. The results indicate that medieval family structures seem to have influenced European regional disparities in virtually every indicator considered. That these links remain, despite the influence of the modern state and population migration, suggests that either such structures are extremely resilient or else they have in the past been internalized within other social and economic institutions as they developed. |
| Keywords: | institutions; family types; education; social capital; labor force |
| JEL: | J12 O18 R11 |
| Date: | 2008–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2008-07&r=eec |
| By: | Elena Arias Ortiz; Catherine Dehon |
| Abstract: | By using a unique dataset containing the entire newly enrolled student population at the University of Brussels (ULB), this case study aims to be the first complete analysis of the determinants that infuence the student's path at university in Belgium. We analyze the probability of succeeding the first year at university in Brussels taking into account individual characteristics, prior schooling and socioeconomic background. Our results show that the socioeconomic background of the student influence success in a significant way. More specifically, the mother's level of education and the father's occupational activity seem to predominate. We observe also a difference in performance between students coming from different high school programs. Indeed, students coming from one of the two high school systems ("traditionnel" and "rénové") existing in Belgium's French Community, present non homegenous results at the end of their first year. In addition and in contrast with some of the literature findings, Belgians and foreigners have the same first year performances if we take into account for their socioeconomic environment. Moreover the same results are obtained when we look at European and non-European students. Nevertheless, when we distinguish foreign students with respect to their level of integration, our analysis show the existence of an "European elite" that comes to Belgium looking for a diploma and that do much better in first year than Belgian students. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_003&r=eec |
| By: | Camille Logeay (IMK at the Hans Boeckler Foundation); Katja Rietzler (IMK at the Hans Boeckler Foundation) |
| Abstract: | In this article an overview of the German macroeconomic performance in the last decade is stressed; extraordinary recovery of the German productivity and successes of the foreign trade face depressed domestic demand and a still worrying situation in the labour market. This article attempts to analyse the causes and consequences of these contradictory developments. Labour markets reforms in particular are focussed on in these lines. A macroeconomic evaluation of their impact on employment and wage developments is done and concludes that structural reforms cannot for themselves create more employment, they only can give a greater latitude for economic policy to boost demand without leaving the sustainable framework. |
| Keywords: | Germany, business cycle, unemployment, employment, Europe |
| JEL: | E12 E50 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:02-2008&r=eec |
| By: | Fernandez, Pablo (IESE Business School); Bermejo, Vicente J. (IESE Business School); Bilan, Andrada (IESE Business School) |
| Abstract: | Over the past 10 and 16 years, the average return on mutual funds in Spain was lower than the average return on government bonds at any term. Over the past 10 years, the average return on the funds was lower than inflation. In spite of these results, on December 31, 2007, 8,264,240 investors held 238.7 billion euros in the 2,907 mutual funds then in existence. During 2007, the number of shareholders fell by 555,569 and the value of their assets, by 6.1%. Only 30 of the 935 mutual funds with a 10-year history outperformed the benchmark and only two of them outperformed the overall index of the Madrid Stock Exchange (ITBM). If in the past 16 years every mutual fund had achieved the benchmark return for its category, the gain in value would have been 180 billion euros, instead of the actual figure of 80 billion euros. Total fees and other expenses for the period amounted to 34 billion euros. |
| Keywords: | mutual funds; return to shareholders; benchmark; appreciation of the funds: |
| JEL: | G12 G31 M21 |
| Date: | 2008–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0746&r=eec |
| By: | Bernadette Biatour; Chantal Kegels |
| Abstract: | The objective of the report is to provide an overview of the main drivers of economic growth and the productivity evolution in Belgium, in comparison with the EU and the US, between 1970 and 2005, based on a consistent data set. The growth accounting methodology is applied to explain value added and labour productivity growth for the total economy, manufacturing and market services. This decomposition exercise diverges from what has been applied in Belgium up to now, as it uses capital services flows rather than the capital stock and labour services flows rather than the number of hours worked to measure the contribution of these factors of production to economic and productivity growth. Contributions of the main industries to value added, employment and productivity growth are also estimated. |
| JEL: | O11 O33 O40 O47 |
| Date: | 2008–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:0817&r=eec |
| By: | Eckhard Hein (IMK at the Hans Boeckler Foundation); Achim Truger (IMK at the Hans Boeckler Foundation) |
| Abstract: | The New Consensus approach in macroeconomics is criticised for its exclusive but unwarranted reliance on stabilising monetary policies, for its ill-designed approach to the role of wages and wage policies, and for its complete neglect of fiscal policies. From a Post-Keynesian perspective, it is argued that fiscal policies play an important role for macroeconomic development, albeit the whole macroeconomic policy-mix of monetary, fiscal and wage policies as well as open economy conditions should be considered. Based on this view macroeconomic performance and macroeconomic policies in France, Germany, Sweden and the UK between 1996 and 2005 are analysed, with a special focus on the role of fiscal policies. It is shown that the fiscal policy stance is important for the explanation of different developments in these economies. However, fiscal policies are not the whole story, monetary policies, wage policies and open economy conditions matter as well. |
| Keywords: | Fiscal policy, macroeconomic policies, New Consensus, Post-Keynesian macroeconomics, France, Germany, UK, Sweden |
| JEL: | E61 E62 E63 E64 E65 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:03-2008&r=eec |
| By: | Agustín José Menéndez |
| Abstract: | This paper explores how and to what extent it is possible to contribute to the democratisation of the European political order by means of modifying the ways in which taxes are deliberated upon, decided and collected in the old continent. In the first part, the author elucidates the particular relationship which prevails between the institutional setup and the decision-making processes of the European Union, the structure of the European tax order and democratic legitimacy, and concludes that No European Democracy without European Taxation. In the second part, the three general RECON models are specified by reference to four dimensions of any tax order, and thus the ground is laid to the study of both the emergence of a supranational tax order and the Europeanisation of national tax systems, which will be conducted in coming papers. |
| Keywords: | democratization; Europeanization; institutions; law; tax policy |
| Date: | 2008–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:reconx:p0034&r=eec |
| By: | Bühler, Georg; Jochem, Patrick |
| Abstract: | In the European Union (EU) and in Germany the transport sector is the only sector with increasing CO2 emissions (in the EU by about 32 % and in Germany by about 1 % since 1990). Especially in road freight and air transport a further strong increase is forecasted. In the transport sector this might be impeded by avoiding transport (accepting a lower economic growth), shifting modes or in optimizing logistics. Especially the second is mentioned to be an adequate solution to meet the increasing demand for transportation and reducing CO2 emissions simulatneously. It is often stated, that combined transport (mainly truck-train-truck) might be a very CO2 efficient mode. In this article a Logit-Model (based on a survey of 500 German forwarders) is used to determine mode shift potentials of hauliers. The main factors of influence depending on the service provision of the transport modes are frequency of combined transport services, speed, and costs. For an estimation of the corresponding impact on the mode shift and thus potentials of CO2 emission reductions two policy instruments are empirically tested: a further increase of the performance-based heavy vehicle fee (LSVA-Maut) and a hypothetical speeding up of the average speed in freight rail transport to 80 km per hour. Although the modal shift is rather high in the last policy simulation, the impact on CO2 emissions is still small. |
| Keywords: | Freight Transports, CO2 Emissions, Mode Shift, Combined Transport |
| JEL: | C53 Q54 R48 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7389&r=eec |
| By: | Giuseppe Marotta |
| Abstract: | The harmonized MIR retail interest rates for the euro area, available as of January 2003, show remarkable differences both in levels and dynamics with the previous unharmonized NRIR rates. This evidence should suggest caution in extrapolating the findings of the NRIR-based literature on the incomplete long-run pass-through of market rates even into the short term business lending rates, the least sticky ones among bank rates. We show that long run pass-throughs for MIR rates of smaller and larger short-term business loans are almost always complete or nearly so in nine of the founding EMU countries and in Greece. |
| Keywords: | Interest rates; Monetary policy; European Monetary Union (EMU); Taylor principle |
| JEL: | E43 E52 E58 F36 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mod:wcefin:08101&r=eec |
| By: | Harald U. Pfeifer (Federal Institute for Vocational Education and Training, Bonn) |
| Abstract: | Individual returns on continuing vocational training have been in the focus of many empirical and theoretical papers. Most of the works do not explicitly discuss returns to training that is financed fully or partly by the employee. This seems surprising since several publicly funded programs to increase training participation aim at a stronger employee involvement in the financing of continuing vocational training. This paper analyses the participation in and the determinants and effects of employee-financed training using German panel data. The question is addressed, which employees invest and which benefit from training. Results show that employee-investment in training yields only moderate wage returns and has no significant impact on the further career development, especially when compared to the effects of enterprise-financed training. On the other hand, employees financing their own training gain in terms of unemployment risk reduction and the improvement in the matching of individual skills and job requirements. |
| Keywords: | Human Capital; Skills; Occupational Choice; Labor Productivity |
| JEL: | J24 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0037&r=eec |
| By: | Tullio Jappelli (Università di Napoli Federico II, CSEF, and CEPR); Marco Pagano (Università di Napoli Federico II, CSEF, EIEF and CEPR); Marco di Maggio (MIT) |
| Abstract: | The paper studies the determinants of international differences in household indebtedness, and inquires whether indebtedness is associated with increased “financial fragility”, as measured by the sensitivity of household arrears and insolvencies to the amount of lending and to macroeconomic shocks. It also investigates whether financial fragility is affected by institutional factors, such as information sharing arrangements, judicial efficiency and individual bankruptcy regulation. We address these issues by tapping three data sets: (i) cross-country data on household indebtedness; (ii) European panel data for households lending and arrears; and (iii) time series data for household lending and insolvencies in the U.K., the U.S.A. and Germany. Overall, the analysis underscores the importance of institutional arrangements in determining the size and fragility of household credit markets. |
| Keywords: | household debt, financial fragility, arrears, insolvency, information sharing, judicial efficiency, bankruptcy law |
| JEL: | D14 G21 G28 G33 |
| Date: | 2008–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:208&r=eec |
| By: | Nicole Höhenberger; Claudia Schmiedeberg |
| Abstract: | Building on the three-sector-hypothesis, the New Theory of Trade, and the New Economic Geography, we investigate the development of economic structures of European countries over the last three decades using employment data. We test for structural convergence which we analyze on the aggregate level as well as specifically for manufacturing and service industries. For this we implement both time series and panel data methods. Our results indicate overall structural convergence between Western European countries over time. This is mainly due to strong intersectoral convergence patterns as countries shift from industrialized to service economies. In contrast, the results regarding intrasectoral convergence are mixed: Increasing spatial concentration in production is dominant in technology-intensive manufacturing industries which are characterized by economies of scale and path-dependency, whereas convergence is found in mature, less technology-intensive industries. In most service branches country-specific differences do not change to a significant extent with the exception of transport and storage services. |
| Keywords: | Structural Convergence, European Integration, Economic Development |
| JEL: | O F F P |
| Date: | 2008–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:75&r=eec |
| By: | Michal Franta (Czech National Bank; CERGE-EI); Branislav Saxa (Czech National Bank; CERGE-EI); Katerina Smidkova (Czech National Bank; Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Inflation persistence has been put forward as one of the potential reasons of divergence among euro area members. It has also been proposed that the new EU Member States (NMS) may struggle with even higher persistence due to convergence factors. We argue that persistence may not be as different between the two country groups as one might expect. However, this empirical result can only be obtained if the adequate estimation methods, reflecting the scope of the convergence process the NMS went through, are applied. We emphasize that a time-varying mean models suggest similar or lower inflation persistence for the NMS compared to euro area countries while more traditional parametric statistical measures assuming a constant mean deliver substantially higher persistence estimates for the NMS than for the euro area countries. This difference is due to frequent breaks in inflation time series in the NMS. Structural persistence measures show that backward-looking behavior may be a more important component in explaining inflation dynamics in the NMS than in the euro area countries. |
| Keywords: | inflation persistence, new hybrid Phillips curve, new member states, time-varying mean |
| JEL: | E31 C22 C11 C32 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2008_25&r=eec |
| By: | Cazavan-Jeny, Anne (ESSEC Business School); Margaine, Julien (ESSEC Business School); Missonier-Piera, Franck (EM-Lyon Business School) |
| Abstract: | Ces dernières années, la publication du niveau de rémunération des dirigeants a soulevé d’intenses controverses. Un certain nombre d’études ont mis en évidence une relation positive entre le salaire des dirigeants et la performance de la société, aux Etats-Unis et en Grande- Bretagne. La rémunération des dirigeants est également proche de la structure du gouvernement d’entreprise. Or la structure française de gouvernement d’entreprise est différente de celle observée aux États-Unis ou en Grande-Bretagne. En France, la tradition voulait que l’on ne divulgue pas ou peu d’information sur le niveau de rémunération des dirigeants. Cependant depuis 2002, les sociétés cotées doivent indiquer dans leurs rapports annuels le montant des rémunérations des dirigeants et des membres du conseil d’administration. (loi NRE, 15 mai 2001). A partir d’un échantillon de 110 sociétés cotées françaises sur la période 2002-2004 (indice SBF 120), l’objet de cette recherche est d’apporter des éclairages sur la rémunération des dirigeants dans un pays connu pour être plutôt conservateur sur le sujet. Pour étudier les déterminants de la rémunération des dirigeants, nous avons utilisé trois mesures de cette rémunération : la partie fixe du salaire, le bonus annuel et la rémunération globale. Les premiers résultats montrent que les trois mesures de la rémunération des dirigeants peuvent être expliquées par la taille de la société, et la partie variable (bonus) par la performance boursière. Les résultats sur le risque sont plus mitigés et indiquent que le risque spécifique de la firme est négativement associé à la rémunération des dirigeants, ce qui confirme les résultats de Gray et Cannela (1997). Enfin, les variables de gouvernance ont un impact significatif sur le niveau de rémunération des dirigeants. |
| Keywords: | CEO compensation; Corporate governance; Performance |
| JEL: | G35 M41 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-08015&r=eec |
| By: | Stéphane Auray (Université Lille 3 (GREMARS), Université de Sherbrooke (GREDI) and CIRPÉE); Aurélien Eyquem (GATE, UMR 5824, Université de Lyon and Ecole Normale Supérieure Lettres et Sciences Humaines, France); Jean-Christophe Poutineau (CREM, UMR 6211, Université de Rennes 1 and Ecole Normale Supérieure de Cachan, France) |
| Abstract: | This paper evaluates the welfare gains arising from a deeper trade integration in the European Monetary Union. To do this, the European Monetary Union is represented in a realistic way by an intertemporal general equilibrium model with incomplete financial markets, sticky prices and home bias in both private consumption and production. The model is estimated and not rejected by the data. Two main results emerge : (i) an increase in vertical (intermediate goods) trade implies welfare gains while (ii) an increase in horizontal (final goods) trade implies welfare losses. |
| Keywords: | trade integration, inflation differentials, welfare analysis, optimal currency areas |
| JEL: | F32 F41 F47 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:08-10&r=eec |