nep-eec New Economics Papers
on European Economics
Issue of 2009‒08‒22
eight papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Too Much to Lose, or More to Gain? Should Sweden Join the Euro? By J. James Reade; Ulrich Volz
  2. Effectiveness of One-Euro-Jobs: Do programme characteristics matter? By Hohmeyer, Katrin
  3. External Return to Education in Europe By Strawinski, Pawel
  4. Private Equity, Investment and Financial Constraints – Firm-Level Evidence for France and the United Kingdom By Dirk Engel; Joel Stiebale
  5. Complements or Substitutes? Task Specialization by Gender and Nativity in Spain By Amuedo-Dorantes, Catalina; de la Rica, Sara
  6. Driving Factors in Pricing European CMBS: Bond, Mortgage and Real Estate Characteristics By Gianluca Marcato; Giovanni Alberto Tira
  7. One-third codetermination at company supervisory boards and firm performance in German manufacturing Industries: First direct evidence from a new type of enterprise data By Joachim Wagner
  8. The Challenge of Restoring French Competitiveness By Rafal Kierzenkowski

  1. By: J. James Reade; Ulrich Volz
    Abstract: This paper considers the costs and benefits of Sweden joining the European Economic and Monetary Union (EMU). We pay particular attention to the costs of abandoning the krona in terms of a loss of monetary policy independence. For this purpose, we apply a cointegrated VAR framework to examine the degree of monetary independence that the Sveriges Riksbank enjoys. Our results suggest that Sweden has in fact relatively little to lose from joining EMU, at least in terms of monetary independence. We complement our analysis by looking into other criteria affecting the cost-benefit calculus of monetary integration, which, by and large, support our positive assessment of Swedish EMU membership.
    Keywords: Swedish EMU membership, Monetary policy independence, European monetary integration, Cointegrated VAR method
    JEL: E52 E58 F41 F42 C32
    Date: 2009
  2. By: Hohmeyer, Katrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Recent labour market reforms in Germany introduced a workfare programme called One-Euro-Jobs with roughly 700,000 means-tested benefit recipients participating per year. In programme design leeway is given to local actors to respond to regional and individual factors. The legislature has set only key features of One-Euro-Jobs: One-Euro-Jobs are required to be additional and temporary jobs of public interest. Using administrative data for participants who entered the programme in spring 2005 this paper investigates medium-term effects of the programme and the asso-ciation between flexibility in design and effect heterogeneity. First, effects of different types of One-Euro-Jobs (according to planned duration and weekly working hours) compared to non-participation ('waiting') are estimated and second, programme types are compared directly by pairwise matching to disentangle selection and programme effects. As expected lock-in effects are larger for participation with a longer planned duration, whereas this is not the case for more intensive programmes in terms of working hours. In the medium term, One-Euro-Jobs do not generally increase the employment prospects for men in East Germany beyond two years after programme start and longer and more intensive participations even decrease employment prospects. In West Germany, One-Euro-Jobs in general increase the employment chances and longer participations lead to slightly higher employment opportunities roughly two years after programme start. The initial advantages of short participations decrease over time. " (author's abstract, IAB-Doku) ((en))
    JEL: C13 I38 J68
    Date: 2009–08–12
  3. By: Strawinski, Pawel (University of Warsaw)
    Abstract: This paper provides an international comparison of external rates of return to education. As is pointed out in the literature social return rate exceeds the pure technical rate of return by a considerable margin. However, measuring social return is delicate due to methodological and data problems. The exploited approach is based on a comparative advantage theory. It allows us to control for potential endogeneity problem and a self-selection into different education regimes. We find that external return is positive in all European countries. However the magnitude of these returns varies. It seems that the external return is higher in small economies in which the number of highly educated people is low.
    Keywords: return to education; private return ; social return
    JEL: I21 O15
    Date: 2009–08
  4. By: Dirk Engel; Joel Stiebale
    Abstract: The welfare effects of private equity transactions are debated controversially. We analyze the impact of expansion financing and buyouts by private equity investors on investment of portfolio firms in the UK and France – two countries with different financial systems. Unobserved heterogeneity and the endogeneity of private equity transactions financed by venture capital companies are addressed using dynamic panel data techniques. In both countries we find that portfolio firms display higher investment levels and a lower dependence on internal funds after expansion financing. Buyouts financed by venture capital companies are neither associated with a decrease in investment spending nor with an increase in the dependence on internal finance. In contrary, private equity based buyouts in the UK outperform non-private equity backed British firms in terms of both indicators. Contrasting the notion of several policy makers,we cannot detect that private equity based buyout financing yields higher financial constraints on average.
    Keywords: Investment, financial constraints, private equity employer-to-employer, linked employer-employee
    JEL: G32 D92 G23
    Date: 2009–07
  5. By: Amuedo-Dorantes, Catalina (San Diego State University, California); de la Rica, Sara (University of the Basque Country)
    Abstract: Learning about the impact of immigration on the labor market outcomes of natives is a topic of major concern for immigrant-receiving countries. There exists an extensive literature evaluating the impact of immigration on the employment and wages of natives in the U.S. Yet, despite the significant degree of occupational segregation by gender regardless of workers' origin, the literature has traditionally treated male and female immigrants as a homogenous group when examining the impact of immigration on native workers. Instead, using data from Spain, where the immigrant population has risen from 4 percent to 10 percent of the population within a decade, we allow for male and female foreign-born workers to have distinct impacts on the employment patterns of native men and women. This proves to be important as foreign-born workers only seem to have a significant impact on the employment pattern of native workers of the same sex. Furthermore, foreign-born male (female) workers do not appear to be perfect substitutes of similarly skilled native male (female) workers, which may help explain the null or small impacts of immigration on native employment and wages. Instead, immigration appears to have affected the task specialization and occupational distribution of natives of the same gender.
    Keywords: immigration, gender, task specialization, complements, substitutes, Spain
    JEL: F22 J61 J31 R13
    Date: 2009–08
  6. By: Gianluca Marcato (School of Real Estate & Planning, University of Reading); Giovanni Alberto Tira (School of Real Estate & Planning, University of Reading)
    Abstract: This work represents a first attempt to price European commercial mortgage backed securities (CMBS) and our results are consistent with research carried out in the US market. More specifically this research intends to study the significance of bond, mortgage and property-related variables in the pricing of European CMBS, along with macro-economic and financial factors used as control variables. Particularly we define some variables to describe the underlying property portfolio and the behavior of the real estate market to test their significance in explaining CMBS spreads. Multiple linear regression analysis using a databank of A Tranches issued between 1997 and 2007 indicates a strong relationship with bond-related factors, followed by real estate and mortgage market conditions. As floater coupon tranches tend to be riskier and exhibit higher spreads, we also estimate a model using this sub-set of data only and results hold reinforcing our findings. Finally, we estimate our model for both tranches A and B and discuss main differences.
    Date: 2009
  7. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: This paper contributes to the empirical literature on the co-determination – firm performance nexus by using a new type of data that combines information on the co-determination status of enterprises from a commercial data base and supplementary information collected from the firms with comprehensive data on the firms from official statistics. The data allow for the first time a direct comparison of enterprises from the same size class with and without codetermination at the supervisory board level. It is shown that one-third codetermination at the supervisory board level in limited-liability companies from West German manufacturing industries seems to be neither positively nor negatively related to two core firm performance indicators, productivity and profitability.
    Keywords: One –third co-determination, firm performance, Germany
    JEL: J50
    Date: 2009–08
  8. By: Rafal Kierzenkowski
    Abstract: Since the beginning of the decade, France has seen a marked decline in its export performance, leading to growing concerns on the part of the authorities and of civil society about the economy’s capacity to adapt to the intensified globalisation of trade and investment in goods and services. The poor foreign trade performance of recent years is related to a series of factors, rather than to any single cause. It cannot be explained by external determinants alone, such as the exchange rate, the trade inroads of emerging countries with strong export potential or the sharp rise in oil prices in 2007-08. Indeed, it is not so much the loss of market share itself that is of concern (many countries have experienced this), but rather the extent of that loss, which reflects problems in responding to the acceleration in global demand earlier this decade, before the apparition of the current crisis. An analysis of the deterioration in competitiveness points to supply-side factors such as the relative inability of French firms to service foreign markets, and the pursuit of industrial strategies of offshoring the entire production process. Restoring competitiveness will require steps to strengthen the country’s growth potential and to address the main long-term determinants of that potential, such as fostering research and development, promoting innovation, reducing the tax burden, boosting competition and creating favourable conditions for businesses to grow rapidly. The lack of competitiveness is more often a symptom than the cause of one or more underlying economic weaknesses. What is called for, then, is a comprehensive policy response that addresses the sources of the competitiveness problem, rather than targeted interventions designed directly to remedy the growing trade deficit. This Working Paper relates to the 2009 OECD Economic Survey of France (
    Keywords: globalisation, OECD, France, firm, innovation, competitiveness, R&D, export performance, growth potential, market share, SMEs, tax burden, trade deficit
    JEL: F10 F14 I23 I28 O31 O38
    Date: 2009–08–06

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