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on Microeconomic European Issues |
| By: | Nicole Ahner; Jean-Michel Glachant; Adrien de Hauteclocque |
| Abstract: | European energy policy is characterized by a complex allocation of authority between the European Union and its Member States which results in an intricate interplay of regulatory competence. Knowing the difficulties European countries face in coordinating and proposing common solutions in the area of energy, there is the urgent need to question the legal foundations underlying the decisionmaking process. Institutional paralysis, low reactivity to events and changes as well as systematic political horse-trading across all questions call for an alternative framework allowing some pioneering Member States to promote ad hoc common policies escaping the formal and procedural requirements of EU law. Our paper assesses the legal feasibility of short-run differentiation by means of partial international agreements inspired by the Schengen regime, namely entirely outside the EU framework. The key challenge from a legal point of view is to assess the substantive compatibility of such agreements in energy with the existing rules of the Union. Short run differentiation in energy cannot indeed be assessed at a high level of generalities. We therefore take two areas where legally-binding coordination at the sub-Union level is often called for: nuclear policy and gas security of supply. The possible substantive content of such cooperation is derived from the economic and political literature before legal feasibility is assessed. Our findings suggest that the scope for such agreements is limited for security of gas supply whereas it could be an improved cooperation device in certain areas of nuclear policy. |
| Keywords: | EU energy policy, Schengen agreement, flexible integration, nuclear cooperation, gas security of supply |
| Date: | 2010–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/43&r=eur |
| By: | Marianne Paasi |
| Abstract: | The paper analyses the European Research Area policy (ERA) from the innovation perspective. The Lisbon Treaty gives the Union the objective of free circulation of researchers, scientific knowledge and technology. The five ERA initiatives implement the ERA policy on the basis of voluntary cooperation. The ERA and innovation are linked through the business sector R&D investment. The economic value of the ERA comes from accelerated cross-European knowledge spillovers reducing the cost of inventing. In general, important obstacles hinder the knowledge spillovers making them largely intra-national. These obstacles arise due to the incentives in providing and sharing knowledge and to costs of capturing knowledge spillovers. Funding of knowledge from national budgets and uncertain benefits from knowledge circulation across the heterogenous member states complicates situation further. The analysis of Joint Programming and Better Careers and Mobility initiatives reveals multiple sources of obstacles to cross-European knowledge spillovers. Weak incentives in the member states and limited possibilities at the EU level block the implementation of ERA. In this constellation, the ERA initiatives need to support openness and competition in publicly funded research and universities as well as better models of scientific management to guarantee highest scientific quality. Accelerated (ERA) knowledge spillovers require extended and dynamic markets. |
| Keywords: | European Research Area (ERA), knowledge spillovers, innovation, incentives, voluntary cooperation |
| Date: | 2010–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/40&r=eur |
| By: | Marc Bourreau; Carlo Cambini; Steffen Hoernig |
| Abstract: | In this paper, we analyze the specific national broadband plans which have been developed by some European governments to foster the deployment of next generation access networks, namely in France, Italy, and Portugal. In particular, we discuss the strategies adopted to achieve wide fibre coverage and encourage co-investment between competing operators. Finally, we highlight the similarities and differences between the strategies followed in these three countries. |
| Keywords: | broadband; fibre; next generation access networks; regulation |
| JEL: | L51 L92 |
| Date: | 2010–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/51&r=eur |
| By: | Stephen Littlechild |
| Abstract: | In this paper we discuss the EU policy on electricity markets integration by reviewing the experience of the Electricity Regional Initiatives. The regional approach to market integration delivered important results in areas such as coordination among national transmission system operators, implementation of market-based mechanisms for cross-border transmission capacity allocation and transparency. Furthermore, the inclusive governance process lead by ERGEG gave voice to all relevant stakeholders. However, there are indications that the regional model reached its limit when faced with the objective of coordinating day-ahead and real-time markets. The unanimity approach at the regional level made the intra-regional decision-making process extremely slow. Further, inter-regional integration issues have not been solved yet and attempts to tackle them by prioritising projects in some Regions weakened the pluralistic attributes of the regional model. The Third Legislative Energy Package has the potential to overcome some of these shortcomings by empowering pan-European institutions (ENTSO and ACER) and by involving Member States in the decision making process. Some weaknesses of the second-package, though, persist in the new framework. First, there are no provisions ensuring that ENTSO will have appropriate incentives to act in the interest of European consumers. Second, the Third Package perpetuates the separation between within-country congestion management – which remains a national issue – and cross-border congestion management – to be dealt with at the EU level. This two-tier approach is inconsistent with the highly meshed nature of the European network and is likely to result in inefficient market design. Further, the implementation of coordinated cross-border and national congestion management mechanisms requires considering geographically differentiated prices within countries, a politically unattractive result for most Member States. |
| Keywords: | retail competition, electricity regulation |
| JEL: | L94 |
| Date: | 2010–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/57&r=eur |
| By: | Yaw Nyarko |
| Abstract: | Brain Circulation between the European Union (EU) and Sub-Saharan Africa is a crucial ingredient in Human Capital formation in the latter. A major constraint to African development is the very low base of skilled and highly educated workers and professionals. The production of skilled workers has been low, and only recently has seen a dramatic increase. Recent papers by many authors have indicated that a channel for human capital growth has been, paradoxically, the possibility of the brain drain which serves as both an incentive mechanism and which results in higher human capital when the drainers return. After a review of some of the literature, these insights are applied to the debates raging today on European Union migration policy: the Blue Card, Migration Con-tracts, anti-Brain Drain legislation, etc. This paper argues that a careful calibration of the EU policies may enable faster Human Capital growth in Africa, while, at the same time, being beneficial to the EU by supplying critically needed skills into the EU economy. By carefully planning the production of human capital and the consequent flow of skilled migrants into Europe, the EU can assist in the development of vitally needed numbers of trained or skilled workers in Africa. |
| Keywords: | Brain Drain, Immigration, Migration, Human Capital, Economic Development |
| Date: | 2010–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/30&r=eur |
| By: | Jean-Michel Glachant; Robert Grant; Manfred Hafner; Jacques de Jong |
| Abstract: | We are in desperate need of an EU Energy Policy. The facts are that, yes, there is indeed an EU Energy Policy. It is a policy based on a vision, a vision with three components. The policy is aiming for “markets, competition and efficiency”, it is equally focussing on “a sustainable energy economy”, and thirdly, it wants to “secure the EU’s energy supply”. Three objectives, three separate action lines. Balancing the three objectives in an integrated approach is challenging and difficult. To what extent is the market approach consistent with the other two policy packages? What impact does a climate package with tradable emission rights and non-tradable targets for green energy have on the market designs for gas and electricity? Are the necessary investments in new pipes and wires for securing our energy supplies sufficiently coming under the prevailing regulatory framework? Or, to put it differently; are we smart enough in the way in which we are making implementing steps in order to meet our stated objectives? Our paper ends with a proposed new vision and a set of 22 recommendations to the new European Commission. |
| Keywords: | energy policy; climate change; security of energy supply; EU internal marke |
| Date: | 2010–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/52&r=eur |
| By: | d'Artis Kancs; Pavel Ciaian |
| Abstract: | In 2009 the EU adopted a new migration policy instrument - the Blue Cards (BC) - for attracting highly skilled workers to the EU. The present paper examines the potential impacts, which BC may cause on the less developed sending countries (LDC). According to the adopted framework of innovative capital, the BC will reduce human capital in LDC. In addition, BC will also have a negative impact on knowledge capital. These findings suggest that the BC is not coherent with the EU’s development policy. Without appropriate policy responses, BC fade the developing country growth prospects away. In order to address the skill drain issues, we propose and examine alternative migration policy options for the LDC. |
| Keywords: | African sending countries, high-skill migration, EU Blue Cards, innovative capital, economic growth, LDC. |
| JEL: | F02 F22 J24 J61 O15 |
| Date: | 2010–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2010_10&r=eur |
| By: | Tony Shortall |
| Abstract: | This paper suggests that international roaming markets suffer from structural flaws in the way that roaming agreements are established in Europe. The initial roaming interventions by the European Commission in 2007 have been very welfare enhancing and the transfer of producer surplus to consumers has brought significant benefits to end users. Nevertheless, there are clear opportunity costs of maintaining and/or extending the current roaming Regulation. The price for wholesale roaming services in a given country is driven principally by the amount of traffic that an operator is willing to send back to the country requesting a price offer and not on the basis of the roaming services requested. The paper suggests that by breaking the link between the prices offered in one country and the volume of returned traffic will enable the wholesale market for international roaming to operate competitively. It is further suggested that retail price regulation is unwarranted when the wholesale market can operate competitively irrespective of the issue of the retail elasticity of demand for these services. Preliminary, suggestions are put forward as to how policy makers could transition from the current regime to a future market based regime by putting a number of required enablers in place. |
| Keywords: | Roaming regulation, mobile telephony, European single market |
| Date: | 2010–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/62&r=eur |
| By: | Mara Faccio; Maria-Teresa Marchica; Roberto Mura |
| Abstract: | Using new data for the universe of firms covered in Amadeus, we reconstruct the portfolios of shareholders who hold equity stakes in private and publicly-traded European firms. We find great heterogeneity in the degree of portfolio diversification across large shareholders. Exploiting this heterogeneity, we document that firms controlled by diversified large shareholders undertake riskier investments than firms controlled by non-diversified large shareholders. The impact of large shareholder diversification on corporate risk-taking is both economically and statistically significant. Our results have important implications at the policy level because they identify one channel through which policy changes aimed at improving capital market development can improve economic welfare. |
| Keywords: | Risk-taking choices; Large shareholders; Portfolio diversification |
| JEL: | G11 G15 G31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1241&r=eur |
| By: | Christian M. Dahl (University of Southern Denmark, CEBR and CREATES); Hans Christian Kongsted (University of Copenhagen, CAM and CEBR); Anders Sørensen (Copenhagen Business School and CEBR) |
| Abstract: | What has been the quantitative effect on productivity growth of information and communication technology (ICT) in Europe after 1995? Based on a multi-country sectoral panel data set, we provide econometric evidence of positive and signi?cant productivity effects of ICT in Europe, mainly due to advances in total factor productivity. The impact of ICT in Europe has happened against a negative macro economic shock not related to ICT. This is in contrast to the established evidence for the US. Our main results challenge the consensus in the growth-accounting literature that there has been no acceleration of productivity growth in Europe, mainly due to a dismal performance of ICT-using sectors. |
| Keywords: | Labor productivity, total factor productivity, information and communications technology, panel data methods. |
| JEL: | E32 C23 O47 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2010-47&r=eur |
| By: | Kristoffel Grechenig (Max Planck Institute for Research on Collective Goods, Bonn); Michael Sekyra (Vienna University of Technology, Austria) |
| Abstract: | We address one of the cardinal puzzles of European corporate law: the lack of derivate share-holder suits. We explain this phenomenon on the basis of percentage limits which require share-holders to hold a minimum amount of shares in order to bring a lawsuit. We show that, under this legal regime, managers will collude with large shareholders by means of settlements or bribes that impose a negative externality on small shareholders. Contrary to conventional agency models, we find that large shareholders do not monitor the management; as a consequence, there is no free riding opportunity for small shareholders. |
| Keywords: | Collusion, Derivative Shareholder Suits, Percentage Limits, Monitoring, Free Riding |
| JEL: | K22 K42 G30 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2010_15&r=eur |
| By: | Fjaestad, Maja (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The organization of post-war science has taken distinctly different paths in different countries, based on historical rationales, national funding patterns and institutional structure. The German Max Planck-Society is a research-only network of basic research institutes whose organization and establishment relies heavily on the high valuation of basic research, as well as principles of separation of basic and applied science and ideals of independent research. The paper investigates the historical roots and organizational character of this scientific milieu. Also, the separation between the Max Planck-Society and the more industrially orientated Franuhofer institutes is discussed and problemized. One conclusions is that in spite distinctly different roles in the German research landscape, separating basic from applied research, the two organization both stresses their usefulness and contribution to the “common good” in official presentations. |
| Keywords: | Research institutes; basic research; applied research; Max Planck Society; Fraunhofer Society; Germany; Research policy |
| JEL: | O00 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0232&r=eur |