nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒10‒16
eighteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The European emissions trading system in Belgium. By Eyckmans, Johan; Rousseau, Sandra
  2. The European Firm By Colombelli Alessandra; Quatraro Francesco
  3. Tax Policy after the Crisis – Monitoring Tax Revenues and Tax Reforms in EU Member States – 2010 Report By European Commission
  4. Health Care Developments in EU Member States: Regressing Trensds and Institutional Similarity? By Montanari, Ingalill; Nelson, Kenneth
  5. Migration pressures and immigration policies : new evidence on the selection of migrants By Avato, Johanna
  6. The Monetary Value of Winter Sport Services in the European Alps By Tim Pawlowski; Christoph Breuer
  7. Employment services and active labor market programs in Eastern European and Central Asian countries By Kuddo, Arvo
  8. Austrian Exporters: A Firm-Level Analysis By Johannes Pöschl; Robert Stehrer; Roman Stöllinger
  9. The microeconomics of directed technological change.The evidence at the firm level By Antonelli Cristiano; Colombelli Alessandra
  10. The Quality and Variety of Exports from New EU Member States: Evidence from Very Disaggregated Data By Konstantins Benkovskis; Ramune Rimgailaite
  11. Enterprise Systems Adoption and Firm Performance in Europe: The Role of Innovation By Fardad Zand; Cees van Beers
  12. Relative performance of SRI equity funds: An analysis of European funds using Data Envelopment Analysis By Antonella Basso; Stefania Funari
  13. Plural Form and Franchisors Performance : Early Empirical Findings From Europe By Frédéric Perdreau; Anne-Laure Le Nadant; Gérard Cliquet
  14. The Economics of the Nord Stream Pipeline System By Chyong, C.K.; Noël, P.; Reiner, D.M.
  15. Statistical evidence of tax fraud on the carbon allowances market By Marius-Cristian Frunza; Dominique Guegan; Antonin Lassoudière
  16. Implementing the EU renewable target through green certificate markets By Finn Roar Aune, Hanne Marit Dalen and Cathrine Hagem
  17. Worker Reallocation across Occupations in Western Germany By Aysen Isaoglu
  18. Price induced water irrigation: Unraveling conflicts and synergies between European agricultural and water policies By Athanasios Kampas; Athanasios Petsakos; Stelios Rozakis

  1. By: Eyckmans, Johan; Rousseau, Sandra
    Date: 2010
  2. By: Colombelli Alessandra; Quatraro Francesco (University of Turin)
    Date: 2010–08
  3. By: European Commission
    Abstract: The report is prepared jointly by DG ECFIN and DG TAXUD of the European Commission. As the previous edition, the report analyses recent trends in tax revenues and tax reforms in EU Member States. A particular focus of this year's edition is on the consequences of the global economic and financial crisis on revenue systems and the need to provide adequate policy responses. Given the size of the budgetary consolidation required after the crisis, a contribution from the revenue side will be necessary in many countries. The report analyses how revenue increases and tax systems in general could be designed in a growth-friendly way and to what extent some of the reforms would entail a need for coordination at the EU level. Moreover, it discusses tax policy issues related to the crisis and contributes to the ongoing discussion on financial sector taxation.
    Keywords: European Union, taxation, tax reforms, financial sector
    JEL: H21 H22 H23 H25 H27 H62
    Date: 2010–09
  4. By: Montanari, Ingalill (Stockolm University: Swedish Institute for Social Research); Nelson, Kenneth (Stockholm University: Swedish Institute for Social Research)
    Abstract: <p> Due to various structural pressures predictions of retrenchment and conformity of social policies have been legion, both in terms of expenditure and institutional set-up. Recent research has focused on changes in cash benefits. Comparative analyses of changes in services, the other pillar of social policy, have however so far been limited to a few countries. The purpose of this paper is to perform a diachronical cross-national analysis of health care services. We thus raise questions of decline and convergence of European health care systems. Contrary to previous claims we find that European health care systems are not particularly hit by retrenchment and convergence is absent in key health care dimensions, namely coverage, financing and provision. The empirical analysis is based on institutional indicators rather than expenditure levels. We utilize OECD Health Data and provide both a descriptive analysis and multi-level regressions. <p>
    Keywords: Health care; Citizenship rights; EU; welfare
    JEL: I11 I18 I38
    Date: 2010–10–05
  5. By: Avato, Johanna
    Abstract: This paper aims to better understand emigration pressures in migrant sending countries by looking at the determinants of the propensity to migrate at the individual level. The analysis is based on survey data from Albania, Moldova, Egypt and Tunisia collected by the European Training Foundation (ETF) in 2006. Within this context the study focuses on: (i) the self-selection of migrants in terms of skills; and (ii) the impact of selective immigration policies on the migration process. The paper finds that migration pressures, or the intent to migrate, are not subject to any self-selection. However, immigration policies exert a strong out-selection that is likely part of the reasons why positive selection is found in many studies. Further, the study confirms that the European Union (EU) attracts comparatively lower skilled migrants than other destinations.
    Keywords: Population Policies,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements,International Migration,Gender and Development
    Date: 2009–12–01
  6. By: Tim Pawlowski (Institute of Sport Economics and Sport Management, German Sport University Cologne); Christoph Breuer (Institute of Sport Economics and Sport Management, German Sport University Cologne)
    Abstract: Considering the increasing stress of competition in winter sports, e.g., caused by the increasing popularity of sun holidays in the winter season or recently developed new ski areas, cable-car companies have to optimize their price-performance ratio with a modified marketing management approach. For most decisions regarding the marketing mix (e.g. the price calculation of new supply attributes), the knowledge about the monetary value of the different single attributes a consumer receives when purchasing a ski-lift ticket is indispensable. Since economics in general has a certain value for practical decision-taking in leisure management we follow other authors and transfer the economic concept of ‘hedonic prices’ to the field of empirical leisure research to derive the monetary value of some core service attributes in winter sports. The study is based on data of n=260 ski areas in five countries of the European Alps (Austria, France, Germany, Italy, and Switzerland). While the developed hedonic price models show rather high-variance explanatory power, most of the estimated attribute prices differ significantly between the countries studied. Possible implications for the price and product policies of cable-car companies are presented and discussed.
    Keywords: Winter sports, hedonic approach, monetary value, ski, service, price
    JEL: D01 D12 L83
    Date: 2010–10
  7. By: Kuddo, Arvo
    Abstract: The objective of this paper is to look at employment services and labor market policies in the transition countries of Eastern Europe and Central Asia, and identify key benefits and constraints of active labor market programs, as well as the main characteristics and features of successful policy interventions. Various policy options are discussed on how to enhance public employment services but also private employment agencies which might be relevant to and suitable for the countries in the region given their macroeconomic and labor market situation. Overall, this report recommends that greater resources will be needed for active labor market programs (ALMPs) in the future. However, the emphasis should be put on improving the design and effectiveness of ALMPs, rather than on increasing spending levels only.
    Keywords: Labor Markets,Labor Policies,Markets and Market Access,Labor Management and Relations,Population Policies
    Date: 2009–10–01
  8. By: Johannes Pöschl (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: In this paper we provide detailed evidence on the importance and performance of exporters compared to non-exporters in Austrian manufacturing industries based on firm-level data. The centrepiece of the study is the issue of the export premium, i.e. the size and performance advantages of exporting firms compared to their purely domestic peers. We find evidence for the existence of large export premia for all seven size and performance premia considered. These results are largely in line with the results found for other European countries. When estimating the export premium at the level of individual industries, we find significant differences with respect to the magnitude of the export premia. Significant export premia are still found when controlling for other firm characteristics such as employment and R&D-related variables where we find lower but more plausible magnitudes for the size and performance premia of exporters. We further test the robustness of the export premium results using random and also fixed effects estimators. The random effects model delivers statistically significant export premia for all measures as well. Care has to be taken when interpreting the estimated coefficients in the firm fixed effects model as the coefficients signal differences in size and productivity for 'export switchers', i.e. firms changing their export status. Finally we employ a probit model to investigate the impact of past firm characteristics on the probability to export. The major result is that while lagged firm productivity and size matter, the most important factor influencing this probability is the past export status pointing to a strong persistence of exporting.
    Keywords: exports, firm heterogeneity, export premium, Austrian manufacturing firms
    JEL: F14 L25
    Date: 2010–07
  9. By: Antonelli Cristiano; Colombelli Alessandra (University of Turin)
    Abstract: This paper aims at exploring the determinants of the direction of technological change at the firm level of analysis. Following the localized technological change approach, we suggest that firms will respond to change in factor market costs by introducing neutral or biased technological changes according to their innovation and knowledge generation related attributes. In the empirical analysis we use a panel of 1113 companies listed on UK and the main continental Europe financial markets (Germany, France and Italy) for the period 1995-2003. We find that small firms, relying more on tacit knowledge than on formal research and development activities, and less able to appropriate the benefits of their technological innovations are more likely to introduce biased technological change in order to make a more intensive use of the factor that has become more abundant
    Date: 2010–07
  10. By: Konstantins Benkovskis; Ramune Rimgailaite
    Abstract: According to trade theories, the average quantity of exported goods is not the only parameter of export performance – the variety and quality of exports also play an important role. The goal of this paper is to evaluate the variety and quality of exports from the new EU Member States Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia (NMS) in 1999–2009. The analysis is done on the basis of methodology proposed by R. C. Feenstra (1994) and further developed by D. Hummels and P. Klenow (2005), and Ch. Broda and D. E. Weinstein (2006). Although unit values play an important role in defining export quality, the calculations herein take into account also market shares and the level of monopoly power of firms in a particular market. In addition, this study contributes to the existing literature by providing a different way of evaluating the variety assuming that the number of exported brands follows the Poisson distribution. The calculations show that exports from NMSs in 2009 were of lower quality in comparison with German exports: relative quality was ranging between 0.30 and 0.55. It was found that all NMSs significantly increased their average number of brands exported to the EU market; moreover, all NMSs were able to increase the average quality of their exports during the 10-year reference period. Finally, relative quality is much more stable than relative prices, providing evidence that the measure of relative quality developed herein is better than the traditional proxy, i.e. relative export prices, as it does not include relative costs of production but reflects structural factors.
    Keywords: new EU Member States, exports, quality, variety
    JEL: C43 F12 F14 O52
    Date: 2010–08–20
  11. By: Fardad Zand; Cees van Beers
    Abstract: Despite the ubiquitous proliferation and importance of Enterprise Systems (ES), little research exists on their post-implementation impact on firm performance, especially in Europe. This paper provides representative, large-sample evidence on the differential effects of different ES types on performance of European enterprises. It also highlights the mediating role of innovation in the process of value creation from ES investments. Empirical data on the adoption of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Knowledge Management System (KMS), and Document Management System (DMS) is used to investigate the effects on product and process innovation, revenue, productivity and market share growth, and profitability. The data covers 29 sectors in 29 countries over a 5-year period. The results show that all ES categories significantly increase the likelihood of product and process innovation. Most of ES categories affect revenue, productivity and market share growth positively. Particularly, more domainspecific and simpler system types lead to stronger positive effects. ERP systems decrease the profitability likelihood of the firm, whereas other ES categories do not show any significant effect. The findings also imply that innovation acts as a full or partial mediator in the process of value creation of ES implementations. The direct effect of enterprise software on firm performance disappears or significantly diminishes when the indirect effects through product and process innovation are explicitly accounted for. The paper highlights future areas of research.
    Keywords: Enterprise Systems; ERP; SCM; CRM; KMS; DMS; IT Adoption; Post-implementation Phase; IT Business Value; Innovation; Firm Performance; Europe
    Date: 2010
  12. By: Antonella Basso (Dept. of Applied Mathematics, University Ca'Foscari of Venice and SSAV); Stefania Funari (Dept. of Applied Mathematics, University Ca'Foscari of Venice)
    Abstract: The main aims of this contribution are first to analyse the ethical level of European socially responsible investment (SRI) funds, secondly to measure the overall performance of the European SRI mutual funds with an appropriate data envelopment analysis (DEA) model and, finally, to investigate the relationship between the ethical level of mutual funds and their financial performance. In order to do so, we build an ethical measure, based on the main socially responsible features usually taken into account by SRI mutual funds, which evaluate their ethical strategies. In the time period of economic recession considered in the analysis, the triennium June 2006-June 2009, the mean returns of most mutual funds are negative, preventing the usual DEA models from being applied. In order to overcome this difficulty, we apply a special modification of these DEA models which can be used regardless of the phase of business cycle.
    Keywords: performance evaluation; SRI mutual funds; data envelopment analysis.
    JEL: C65 G1 G23
    Date: 2010–09
  13. By: Frédéric Perdreau (COACTIS - Université Lumière - Lyon II : EA4161 - Université Jean Monnet - Saint-Etienne); Anne-Laure Le Nadant (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen); Gérard Cliquet (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen)
    Abstract: This paper deals with the relationships between plural form and performance in franchising networks in Europe. It is proposed that a franchisor's life cycle stage and human capital assets influence the relationship between plural form and performance. The model has been estimated using panel data on 41 publicly listed European franchising networks in the 1998-2007 period. The proportion of network-franchised units to the total number of its units in its distribution system is used as the indicator of its plural form (franchise proportion). Following an instrumental approach, the network performance is measured at the franchisor level by its industry-adjusted Return on Assets (ROA) and a relative stock market valuation measure of intangible human capital is used. The early results show that the impact of franchise proportion on performance is greater for franchisors with high intangible human capital compared to franchisors with low intangible human capital. Overall, results provide support for the contention that the franchisors' performance is contingent on the ‘fit' between governance structure (franchise proportion) and resources (critical human assets). In contrast, strong evidence that the governance/performance relationship is contingent on life cycle stage or franchisor's age is not found. But, our results suggest that franchisor's age could weaken the relationship between franchise proportion and performance. These results might suggest that younger franchisors with high human capital should increase their franchise proportion to enhance their financial performance.
    Keywords: franchising; human capital; governance; performance
    Date: 2010–11
  14. By: Chyong, C.K.; Noël, P.; Reiner, D.M.
    Abstract: We calculate the total cost of building Nord Stream and compare its levelised unit transportation cost with the existing options to transport Russian gas to western Europe. We find that the unit cost of shipping through Nord Stream is clearly lower than using the Ukrainian route and is only slightly above shipping through the Yamal-Europe pipeline.<br><br> Using a large-scale gas simulation model we find a positive economic value for Nord Stream under various scenarios of demand for Russian gas in Europe. We disaggregate the value of Nord Stream into project economics (cost advantage), strategic value (impact on Ukraine’s transit fee) and security of supply value (insurance against disruption of the Ukrainian transit corridor). The economic fundamentals account for the bulk of Nord Stream’s positive value in all our scenarios.
    Keywords: Nord Stream, Russia, Europe, Ukraine, Natural gas, Pipeline, Gazprom
    JEL: L95 H43 C63
    Date: 2010–10–01
  15. By: Marius-Cristian Frunza (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Sagacarbon - Sagacarbon SA); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Antonin Lassoudière (Sagacarbon - Sagacarbon SA)
    Abstract: The aim of this paper is to show evidence and to quantify with forensic econometric methods the impact of the Value Added Tax fraud on European carbon allowances markets. This fraud mainly occurred at the beginning of between the end of 2008 and the beginning of 2009. In this paper, we explore the financial mechanisms of the fraud and the impact on the market behavior as well as the reflexion on its econometric features. In a previous work, we showed that the European carbon market is strongly influenced by fundamentals factors as oil, energy, gas, coal and equity prices. Therefore, we calibrated Arbitrage Pricing Theory-like models and showed that they have a good forecast capacity. Those models enabled us to quantify the impact of each factor on the market. In this study, we focused more precisely on the benchmark contract for European carbon emissions prices over 2008 and 2009. We observed that during the first semester of 2009, there is a significant drop in our model performances and robustness and that the part of market volatility explained by fundamentals reduced. Therefore, we identified the period where the market was driven by VAT fraud movements and we were able to measure the value of this fraud. Soon after governments passed a law that cut the possibility of fraud occurrence the performance of the model improved rapidly. We estimate the impact of the VAT extortion on the carbon market at 1.3 billion euros.
    Keywords: Carbon, EUA, energy, Arbitrage Pricing Theory, Switching regimes, hidden Markov Chain Model, forecast.
    Date: 2010–06
  16. By: Finn Roar Aune, Hanne Marit Dalen and Cathrine Hagem (Statistics Norway)
    Abstract: The EU Parliament has agreed on a target of a 20 % share of renewables in the EU’s total energy consumption by 2020. To achieve the target, the Council has adopted mandatory differentiated national targets for each of the Member States. In this paper we consider the potential for cost reductions by allowing for trade in green certificates across Member States. We show that differentiated national targets cannot ensure a cost effective implementation of the overall target for EU’s green energy consumption. Trade in green certificates can ensure a cost effective distribution of green energy production, but the national targets prevents a cost effective distribution of energy consumption. Nevertheless, our numerical model indicates that EU-wide trade in green certificates may cut the EU’s total cost of fulfilling the renewable target by as much as 70 % compared to a situation with no trade. However, the design of green certificate markets may have large impact on the distribution of costs across countries.
    Keywords: Energy policy; green certificate markets; renewable targets
    JEL: Q48 Q54 Q58
    Date: 2010–09
  17. By: Aysen Isaoglu
    Abstract: This paper analyzes the determinants of annual worker reallocation across disaggregated occupations in western Germany for the period 1985-2003. Employing data from the German Socio-Economic Panel, the pattern of average occupational mobility is documented. Worker reallocation is found to be strongly procyclical. Its determinants at the individual level are then investigated while controlling for unobserved worker heterogeneity. A dynamic probit fixed effects model is estimated to obtain coefficients and marginal effects. The incidental parameter bias is reduced by the method proposed in Hahn and Kuersteiner (2004). An interesting finding is that workers changing occupation are about 8 to 9 percent less inclined to experience occupational mobility in the subsequent year than workers who do not change. Except for workers with only compulsory education, the impact of age on the probability of occupational change is declining in the level of education. The unemployment rate has a negative effect on the probability of occupational changes, especially for female foreigners.
    Keywords: Dynamic binary choice models, fixed effects, incidental parameter bias, occupational mobility, Panel data
    JEL: J24 J44 J62 C23 C25 C81
    Date: 2010
  18. By: Athanasios Kampas (Agricultural Economics and Rural Development Department, Agricultural University of Athens); Athanasios Petsakos (Agricultural Economics and Rural Development Department, Agricultural University of Athens); Stelios Rozakis (Agricultural Economics and Rural Development Department, Agricultural University of Athens)
    Abstract: The 2003 CAP reform considerably affects cropping patterns in European agriculture. At the same time the imperatives of the forthcoming Water Framework Directive (WFD) is expected to modify irrigation decisions especially in Southern Europe where irrigated agriculture utilizes about 70-80% of total water. This paper examines the combined effect of CAP reform and the application of likely volumetric water pricing on water demand by taking into account three drivers of change, namely extensive margin changes, intensive margin changes and irrigation technology shift. For low rates of water prices, CAP reform contradicts the WFD objectives since it leads to cropping patterns that consume more water resources. On the contrary, as water prices increase, decoupling and water pricing display a synergistic effect on water conservation. Finally, decoupling substantially increases the efficiency of water pricing in terms of water conservation. As a result, the post CAP reform regime clearly dominates the prior CAP reform regime when an index of value for money water conservation is examined.
    Keywords: irrigation, bio-economic modeling, mathematical programming, policy analysis, price endogenous model, water demand, CAP reform, WFD
    JEL: C61 Q18 Q21 Q25
    Date: 2010

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