nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒09‒11
fourteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Legal Feasibility of Schengen-like Agreements in European Energy Policy: The Cases of Nuclear Cooperation and Gas Security of Supply By Nicole Ahner; Jean-Michel Glachant and Adrien de Hauteclocque
  2. Europe's missing yollies By Reinhilde Veugelers
  3. Agglomeration and interregional network effects on European R&D productivity By Attila Varga; Dimitrios Pontikakis; George Chorafakis
  4. Self-Selection into Export Markets by Business Services Firms: Evidence from France, Germany and the United Kingdom By Temouri, Yama; Vogel, Alexander; Wagner, Joachim
  5. Universal service financing in competitive postal markets:One size does not fit all By Axel Gautier; Dimitri Paolini
  6. On the determinants of banking efficiency in four new European Union Member States: the impact of structural reforms By Mamatzakis, Emmanuel; Koutsomanoli-Filippaki, Anastasia; Staikuras, Christos
  7. Biomedicine and EU Law: Unlikely Encounters? By Stéphanie Hennette-Vauchez
  8. Anti-corruption strategies in some South-Eastern European states.An empirical study on the impact of the government performance By Matei, Ani; Matei, Lucica
  9. The committee of the regions: the recon models from a subnational perspective By Justus Schönlau
  10. Structural Estimation of Price Adjustment Costs in the European Car Market By Noton, Carlos
  11. Aviation, Space or Aerospace? Exploring the knowledge networks of two industries in den Netherlands. By Tom Broekel; Ron Boschma
  12. A Comparison between Political Claims Analysis and Discourse Network Analysis: The Case of Software Patents in the European Union By Philip Leifeld; Sebastian Haunss
  13. Geographic Macro and Regional Model for EU Policy Impact Analysis of Intangible Assets and Growth By Attila Varga; Péter Járosi; Tamás Sebestyén
  14. Revising the Horizontal Merger Guidelines: Lessons from the U.S. and the E.U. By Gilbert, Richard J; Rubinfeld, Daniel L.

  1. By: Nicole Ahner; Jean-Michel Glachant and 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: Schengen
    Date: 2010–05–15
  2. By: Reinhilde Veugelers
    Abstract: In this Policy Brief, Bruegel Senior Fellow Reinhilde Veugelers and Michele Cincera, Professor at ULB, draw our attention to young leading innovators ('yollies'). They explain why the European Union's business research and development deficit, relative to the United States, can be attributed to the EU having fewer yollies, especially those that are less R&D intensive. This paper raises important and timely questions about the EU's innovation policy. The authors argue why policy makers should pay attention to the heterogeneity across young sectors and design sector-specific measures to boost innovation and growth in the EU.
    Date: 2010–08
  3. By: Attila Varga (Department of Economics and Regional Studies, University of Pécs); Dimitrios Pontikakis (Institute for Prospective Technological Studies, Joint Research Centre, European Commission Seville, Spain); George Chorafakis (Research Directorate-General, European Commission Brussels, Belgium)
    Abstract: This paper explores the effects of intra-regional agglomeration and interregional networking on the productivity of R&D across EU regions. The paper is based on the spatial econometric modelling framework presented in Varga (2000), and further develops a methodology for estimating the dynamic effects of agglomeration and interregional networks on R&D productivity in regional knowledge creation (measured by patent applications and publications) at the level of EU regions. This empirical modelling framework is applied to classify EU regions into different tiers according to the strengths of their agglomeration effects. These effects are then compared to the network effects of interregional connectedness as reflected in regional participation in the EU Framework Programme for Research. The estimated model is used then for an assessment of the impacts of EU Framework Programme expenditures on technological development and for carrying out policy impact simulations.
    Keywords: Agglomeration, network effects, R&D productivity
    JEL: O18 O33 R11
    Date: 2010–06
  4. By: Temouri, Yama (Aston University); Vogel, Alexander (Leuphana University Lüneburg); Wagner, Joachim (Leuphana University Lüneburg)
    Abstract: This study reports results from an empirical investigation of business services sector firms that (start to) export, comparing exporters to firms that serve the national market only. We estimate identically specified empirical models using comparable enterprise level data from France, Germany, and the United Kingdom. Exporters are more productive and pay higher wages on average in all three countries. Results for profitability differ across borders – profitability of exporters is significantly smaller in Germany, significantly larger in France, and does not differ significantly in the UK. The results for wages and productivity hold in the years before the export start, which indicates self-selection into exporting of more productive services firms that pay higher wages. The surprising finding of self-selection of less profitable German business services firms into exporting does not show up among firms from France and the UK where no statistically significant relationship between profitability and starting to export is found.
    Keywords: business services firms, exports, self-selection, France, Germany, UK
    JEL: F14 D21 L80
    Date: 2010–08
  5. By: Axel Gautier; Dimitri Paolini
    Abstract: In the postal sector, the net cost of universal service depends on the content of the service, the postal market characteristics and the country’s geographical configuration. These three groups of factors affect both the direct cost of providing the service and the extent of competition on the market. In this paper, we consider countries with different geographical characteristics and we show that the choice of an appropriate mechanism to share the cost of universal service between market participants depends on the country configuration. Thus, for universal service financing, one size does not fit all.
    Date: 2010
  6. By: Mamatzakis, Emmanuel; Koutsomanoli-Filippaki, Anastasia; Staikuras, Christos
    Abstract: We employ the stochastic frontier methodology and estimate alternative profit efficiency in the banking industry of four new European Union Member States, namely the Czech Republic, Hungary, Poland and the Slovak Republic, over the period 1999-2003. Our results show that structural reforms in the banking industry improve performance in terms of higher efficiency, whereas the institutional development of the non-bank financial sector hinders banks’ profit efficiency.
    Keywords: structural reforms; alternative profit inefficiency; new EU countries
    JEL: L25 D24 G21
    Date: 2010–08–19
  7. By: Stéphanie Hennette-Vauchez
    Abstract: Over the last decade, a significant body of biomedical law has emerged within EU law. In so far as the EU has long been portrayed as aiming mostly if not only at economic integration, it is surprising at face value to see issues such as human embryonic stem cell research or trade in oocytes even reach the EU's political and legal agenda. Although it is possible to argue that the puzzle waters down when one considers not only that EU has in fact always been open to 'non-market' values on the one hand but also that biomedical issues have themselves undergone radical transformations recently, as one commonly speaks now of 'Tissue Economies', these elements do not seem to suffice for explaining the development of a body of biomedical law within EU law. It is argued here that many of the legal technicalities that sustain the view that the EU does not have any straightforward competences in the field have been balanced by the specifically 'polity-building' dimension of 'Ethics' (and here bioethics). In other words, the research presented here establishes several manners in which 'Ethics'' have been instrumental in the EU law making process, thus bridging EU law and biomedicine and simultaneously enabling the EU to assert itself as polity.
    Date: 2010–06–15
  8. By: Matei, Ani; Matei, Lucica
    Abstract: The preoccupations about conceiving and promoting efficient anti-corruption strategies exist in most states, especially in the developing countries. The opportunity of such strategies derives from the direct link, demonstrated theoretically and empirically, between the effects of the anti-corruption strategies and government performance, translated both in the economic and social results and living standard, welfare etc. In the last decades, the transnational actors – UN, World Bank, OECD, EU etc. - have affirmed as promoters of own anti-corruption strategies, directing the states’ efforts, conferring adequate levels of relevance, effectiveness, efficiency or sustainability. The South-Eastern European states incorporate own anti-corruption strategies in the framework of general strategies, aiming the government reform in the context of the European integration process. Strengthening the public integrity, reducing corruption, developing a genuine climate of economic freedom become important objectives concerning the impact on government performance. The paper incorporates briefly the main characteristics of anti-corruption strategies, developed by transnational actors and it aims to shape theoretical and empirical frameworks for the impact of anti-corruption strategies. The focus on some South-Eastern European states has a demonstrative character, as the presented analyses may be extended to various geo-political areas.
    Keywords: anti-corruption strategies; assessment; impact; government performance.
    JEL: D73 D63 G18
    Date: 2010–08–20
  9. By: Justus Schönlau
    Abstract: The Committee of the Regions is a relatively young institution in the European Union context. Since having been set up by the Maastricht Treaty, it has gone through an interesting development which saw an increase in its consultative role, an important expansion of its remit and also its resources, and a number of new initiatives in trying to act as the platform and voice of local and regional interests in the EU policy process. The present paper tries to evaluate the CoR's trajectory through the prism of the three models of EU democracy development (audit democracy, multi-national federal democracy and regional-European cosmopolitan democracy) as developed in the RECON project. It is argued that the sub-national level has to be directly involved in the EU structures in any attempt at 're-constituting' democracy at EU level. The Committee of the Regions as it stands today does have elements of all three models of democracy in it, and these different features seem to pull the Committee in different directions at times. It emerges clearly from this analysis, however, that the CoR has an important role to play in an EU conceived as a genuine multi-level system of governance.
    Keywords: Committee of Regions; democracy; institutionalisation; political representation; regional policy; subsidiarity
    Date: 2010–06–15
  10. By: Noton, Carlos
    Abstract: Exchange rate pass-through literature identifies an important delay in price responses, especially in differentiated products. Using the methodology of Bajari, Benkard and Levin (2007), I estimate the structural price adjustment cost consistent with this fact in the European car market. My approach differs from previous work in that my framework allows me greater flexibility in estimating dynamic games. My main result is that relatively small adjustment costs rationalize the observed inertia in car prices. Intuitively, forward looking price setters face an autocorrelated economic environment (like the nominal exchange rates, GDP and wages) such that just a small cost of repricing justify the persistent prices in the European car market. Additionally, my estimates stress a market-specific heterogeneity in price stickiness suggesting a new dimension of pricing to market behavior.
    Date: 2009–10–05
  11. By: Tom Broekel (Section of Economic Geography, Faculty of Geosciences, Utrecht University); Ron Boschma (Section of Economic Geography, Faculty of Geosciences, Utrecht University)
    Abstract: Little effort has been made to identify industries’ knowledge networks, and to what extent knowledge relations occur between actors in different industries. This paper presents a network study on the Dutch aviation and space industry. Both industries are often treated as similar and categorized as aerospace accordingly, although they tend to rely on different knowledge bases. Our study shows that the structure of the knowledge networks differs between the two industries, and few knowledge linkages have been established between the two. Our findings also suggest that the gap between the two industries’ knowledge networks is more pronounced for market knowledge than for technological knowledge. Non-profit organizations do seem to bridge the knowledge networks of the two industries.
    Date: 2010–08
  12. By: Philip Leifeld (Max Planck Institute for Research on Collective Goods, Bonn); Sebastian Haunss (Department of Politics and Management, University of Konstanz)
    Abstract: The study of policy discourse comprises actor-centered and content-oriented approaches. We attempt to close the gap between the two kinds of approaches by introducing a new methodology for the analysis of political discourse called Discourse Network Analysis. It is based on social network analysis and qualitative content analysis and takes an entirely relational perspective. Political discourse can be analyzed in a dynamic way, and the approach makes previously unobservable cleavage lines and alignments measurable at the actor level, at the level of the contents of a discourse, and a combined layer. We compare discourse network analysis with political claims analysis, a competing method, and apply both methods to the European-level discourse on software patents. Our results demonstrate how an anti-softwarepatent coalition was mobilized and how it gained control over important frames, while the well-organized pro-software-patent discourse coalition was not able to gain sovereignty over the discourse.
    Keywords: Software Patents, Intellectual Property Rights, Discourse Network Analysis, Social Network Analysis, Political Discourse, Policy Networks, Public Policy Analysis, Social Movements, Political Claims Analysis
    Date: 2010–05
  13. By: Attila Varga (Department of Economics and Regional Studies, University of Pécs); Péter Járosi (Department of Economics and Regional Studies, University of Pécs); Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs)
    Abstract: This paper introduces the geographic macro and regional model for NUTS-2 regions of the Euro zone. This model consists of three blocks: the TFP, the SCGE and the MACRO blocks. The model is built for impact analysis of policies targeting intangible assets in the forms of R&D, human capital and social capital. The analysis can be done both at the regional and the EU macroeconomic levels. Policy simulations illustrate the capabilities of the complex model system.
    Keywords: TFP, SCGE models, DSGE models, impact analysis, R&D, human capital, social capital
    JEL: O31 H41 O40
    Date: 2010–06
  14. By: Gilbert, Richard J; Rubinfeld, Daniel L.
    Abstract: Recently, the U.S. Department of Justice and Federal Trade Commission have embarked on an effort to revise and update the U.S. Horizontal Merger Guidelines. There is substantial overlap between the U.S. and E.U. Guidelines, which makes a proposal for U.S. revisions immediately applicable to the E.U. and elsewhere. The U.S. Merger Guidelines can be revised in light of the learning of economists and lawyers in the past two decades to emphasize the importance of competitive effects analysis in merger evaluation and the forces that drive innovation. The Guidelines should also note that once a competitive effects analysis has been completed, it is possible to “back out†a relevant market (or markets) that is consistent with that competitive effects analysis.
    Keywords: mergers, antitrust, market competition
    Date: 2010–02–01

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