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on Microeconomic European Issues |
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Issue of 2011‒07‒21
sixteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Luigi Reggi (University "La Sapienza" of Rome, Department of Public Economics); Sergio Scicchitano (Ministry for Economic Development, Department for the Development and the Economic Cohesion) |
| Abstract: | EU Structural Funds represent by far the main source of funding for innovation in general and for eservices in particular in the lagging regions of Europe classified into the “Convergence” objective. The paper explores the amount of resources dedicated to public e-Services and Information Society by elaborating European Commission data on programmed resources for the 2007-13 period. Moreover, the paper represents the first attempt to use a quantitative approach – i.e. a principal component analysis and a cluster analysis – in order to identify the different strategies adopted by European Regions for Information Society development. The results shows that in the “Convergence” Regions, a specific “public e-services strategy” emerges. Regions investing in public e-services tend to concentrate available resources to e-government or e-health, while very low percentage of total funding is dedicated to the other categories such as broadband or infrastructural services. |
| Keywords: | Information society, regional policy, Cohesion Policy, Structural Funds, e-Services, e-Government, Cluster analysis. |
| JEL: | H83 O38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_10&r=eur |
| By: | Michael Artis; Declan Curran; Marianne Sensier |
| Abstract: | This paper investigates agglomeration economies in an annual panel of NUTS 2 and NUTS 3 city regions across France, Germany, Ireland, Italy, Spain and the UK over 1980-2006 and comparing three sub-samples to see if the effects have changed over time. We uncover evidence of long run agglomeration effects of around 6% for NUTS 2 and NUTS 3 city regions for the full sample. The underlying pattern that this data reflects is changing sectoral composition in which manufacturing was declining, to be largely replaced by services; then more recently a period of city-based economic growth with the financial and business services-led boom at its heart. |
| Keywords: | agglomeration, system dynamic panel data estimations |
| JEL: | C22 E32 E37 E40 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0078&r=eur |
| By: | Francesca Pancotto; Filippo Pericoli (Department of Economics, University of Bologna) |
| Abstract: | A sustainable path of relative competitiveness among the EMU countries is a key factor for the survivorship of the currency union in the long run. We analyze unit labor costs in the European Union with VECM methodology to evaluate relative competitiveness of euro area countries, controlling for exchange rate on the adjustment dynamics, for the economy as a whole and for the manufacturing sector, considered as a proxy of the tradable sector. Results show a lack of convergence of member countries, which is more pronounced for the tradable sector. Persisting idiosyncratic dynamics may be driven by different bargaining policies and institutional structures of national labor markets, and by differential path of technological advance deterring convergence of long run productivity. |
| Keywords: | Unit labor costs, Exchange Rates, Convergence, Competitiveness, Manufacturing Sector |
| JEL: | E31 O47 C32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dsc:wpaper:14&r=eur |
| By: | Andrzej P. Dabkowski |
| Abstract: | Endogenous growth theory assigns an important role for entrepreneurship in the process of economic development. This paper sets to formally test the impact of entrepreneurship on economic growth. Entrepreneurship is represented by a number of proxy variables, whereas Total Factor Productivity is used as a measure of economic growth. Panel data of 26 European countries repeatedly sampled over a period of 11 years is used to estimate a Random Effects model. This study finds that entrepreneurship contributes to growth moderately. It is not, nonetheless, a dominant force shaping changes in TFP growth rates. Business Birth Rate, Self-employment Rate, Business Investment and Labour Productivity Growth were all found to be highly significant. The article concludes that more encompassing measure of entrepreneurship needs to be developed, one that would reflect the complexity of the notion. |
| Keywords: | entrepreneurship, total factor productivity, economic growth, the EU |
| JEL: | O11 O30 O47 O52 L26 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0427&r=eur |
| By: | Laura ROVEGNO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Hylke VANDENBUSSCHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE), KULeuven-LICOS, & CEPR) |
| Abstract: | Trade policy in the European Union is characterized by an intensive use of Antidumping measures. In this paper we compare existing practices in the EU to WTO rules and to other WTO Members. Our comparative analysis reveals that the EU's "lesser-duty rule", which limits the magnitude of the Antidumping duty to the level of domestic injury caused by dumped imports, results in a lower average duty level in EU cases, particularly when compared to the US. In terms of the "Sunset Clause", which limits the duration of protection to 5 years, the EU presents a lower share of measures lasting beyond this limit as compared to other users of Antidumping. In recent years, the number of case initiations by the EU has decreased. There has also been a shift towards the imposition of duties and away from the use of price undertakings as a protectionist measure. In line with other WTO members, an increasing share of cases are targeted against China, where it used to be predominantly Central-European countries and Japan, as well as other low or middle income countries. |
| Keywords: | Antidumping, European Union, Contingent protection, Trade policy, lesser duty rule,price undertakings, WTO |
| JEL: | F13 F14 F52 F53 |
| Date: | 2011–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011023&r=eur |
| By: | Hylke VANDENBUSSCHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE), CEPR and LICOS-KULeuven); Christian VIEGELAHN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)) |
| Abstract: | This paper evaluates the European Union’s antidumping (AD) policy from 1995-2009 with a special focus on the 2008-9 crisis. Combining product-level data on AD cases with detailed import data, we fail to find clear signs of a major trade policy change since the outbreak of the crisis. Our findings suggest that the EU largely remained on its pre-crisis path of AD policy with an increasing share of products and more industries covered by AD measures. Moreover, EU AD policy has increasingly focused on China and other lower middle income countries as targets. Further findings suggest that the EU is more likely to impose protection against countries and country-industries that are similar in their product mix. Country-product combinations subject to a preferential tariff are also more likely to be targeted. In terms of product characteristics, we observe that especially the shares of consumer goods and differentiated goods covered by EU AD measures have increased rapidly, remaining at a relatively high level also during the crisis. The patterns we reveal do not appear to be driven by a few outlying countries but are also similar when considering imports of individual EU member states. |
| Keywords: | Antidumping, Crisis, European Union, Great recession, Product-level data, Temporary trade barriers, Trade policy, WTO |
| JEL: | F13 F14 F52 |
| Date: | 2011–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011021&r=eur |
| By: | Becker, Sascha O.; Egger, Peter; von Ehrlich, Maximilian |
| Abstract: | Transfers to individuals, firms, and regions are often regulated by threshold rules, giving rise to a regression discontinuity design. An example are transfers provided by the European Commission to regions of EU member states below a certain income level. Researchers have focused on estimation of the average treatment effect of this program, assuming that it does not vary in a systematic way across units. We suggest a regression discontinuity design which allows for parametric or nonparametric identification of heterogeneous average treatment effects that systematically vary with observable characteristics in order to shed light on the role of absorptive capacity in determining the impact of regional transfers on economic growth across regions in the European Union. The results suggest that only about 47% of the regions, namely those with a sufficiently high endowment with human capital and a high quality of government, are able to turn transfers under the Union's Objective 1 Structural Funds programme into faster growth. Those regions are the ones which are responsible for a positive average effect of the programme. |
| Keywords: | Absorptive capacity; Heterogeneous local average treatment effects; Regional transfers; Regression discontinuity design |
| JEL: | C21 H54 O40 R11 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8474&r=eur |
| By: | Matteo Lucchese (Università di Urbino "Carlo Bo") |
| Abstract: | The model and the empirical test developed in this paper address the determinants of structural change for six major European economies from 1995 to 2007. The performances of sectors are explained by the unfolding of uneven technological opportunities and different conditions of demand. Building on the literature on structural change and on previous studies on the link between sectoral patterns of innovation and economic performance of sectors, a set of tests is developed on a panel of 21 manufacturing sectors and 17 services, merging three different sources of data. The results show the importance of breaking up the innovative efforts of sectors and the role of demand in shaping their trajectories of development. |
| Keywords: | Structural change, Demand, Innovation, Industry-level analysis. |
| JEL: | O10 O33 O41 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_09&r=eur |
| By: | Urban Sila (Bank of Slovenia); Ricardo M. Sousa (Universidade do Minho - NIPE) |
| Abstract: | We investigate whether workers adjust hours worked in response to windfall gains using data from the European Household Panel. The results suggest that unexpected variation in income has a negative (although small) effect on working hours. In particular, after receiving an unanticipated windfall gain, individuals are more likely to drop out of the labour force and the effects become larger as the size of windfall increases. Furthermore, the empirical findings show that the impact of windfall gains on labour supply: (i) is more important for young and old individuals, (ii) is mostly negative for married individuals with young children, (iii) but can be positive for single individuals at the age of around 40 years. |
| Keywords: | windfall gains, working hours |
| JEL: | E37 E62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:20/2011&r=eur |
| By: | CIPOLLETTA, Germano; FIORANI, Gloria; MATEI, Lucica; MENEGUZZO, Marco; MITITELU, Cristina |
| Abstract: | Prevailing opinions by OECD advisers addresses the process of changes in PA and the efforts towards ‘harmonization' between the domestic patterns and the new transferred principles of modernization as NPM - an universal panacea for the problems of public administrations in transition countries, without paying substantial attention to the relevant implementation gaps for some levels as well as areas of reform. Aiming to verify the ‘convergence' of NPM principles in different national contexts, the ‘lessons learned' from different awarding initiatives supporting innovation exchange programs between the central governments and other joint initiatives between Italy and Romania as examples of cooperation programs for modernization of the public sector are analyzed. The study reviews, beyond certifying the quite different institutional backgrounds and administrative cultures in both countries:1) the markedly features of the public sector innovation programs, drivers and reform trends; 2) the ‘common steps' and ‘who learns what from whom?' in last two decades of rapid ‘public management innovation strategy', exchanged between the OECD- EU countries and the reformers in post-communist countries. Although, the importance of moving away from traditional structures towards a more efficient and accountable management system as well as the challenges arising from dichotomy between Western convergence and transition country-specific restructuring of the public sector are of primary importance. |
| Keywords: | Romania; Italy; modernization; learning transfer; Public Administration reforms |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:nsu:apasro:289&r=eur |
| By: | Battaglia, Lauren; Larouche, Pierre; Negrinotti, Matteo |
| Abstract: | This paper is the first of a larger project aimed at exploring, among other things, whether Europe has a consistent innovation policy in the context of EU economic law (competition policy, intellectual property law, sector regulation). As such, its primary aim is to present our approach for answering this question and outline the anticipated contributions of the project. Part I of the paper sets forth the theoretical foundations of the project--namely an integrated approach to economic law that moves beyond apparent conflicts and assumes innovation as the starting point. Taking this as the foundation, the two primary components of the project are described. First, a theoretical component involving the development of an analytical grid to be used to identify ways in which economic law impacts innovation, and second an applied component that explores observable instances where choices, both implicit and explicit, are made regarding innovation in economic law. Part II of the paper builds on this and offers a preliminary illustration of the proposed analysis in the context of pharmaceuticals, specifically drug reformulation regulatory gaming. |
| Keywords: | antitrust; economic law; innovation; pharmaceuticals |
| JEL: | K21 L41 O31 O34 O38 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8481&r=eur |
| By: | Monica Benito; Rosario Romera |
| Abstract: | Composite indicators play an essential role for benchmarking higher education institutions. One of the main sources of uncertainty building composite indicators and, undoubtedly, the most debated problem in building composite indicators is the weighting schemes (assigning weights to the simple indicators or subindicators) together with the aggregation schemes (final composite indicator formula). Except the ideal situation where weights are provided by the theory, there clearly is a need for improving quality assessment of the final rank linked with a fixed vector of weights. We propose to use simulation techniques to generate random perturbations around any initial vector of weights to obtain robust and reliable ranks allowing to rank universities in a range bracket. The proposed methodology is general enough to be applied no matter the weighting scheme used for the composite indicator. The immediate benefit achieved is a reduction of the uncertainty associated with the assessment of a specific rank which is not representative of the real performance of the university, and an improvement of the quality assessment of composite indicators used to rank. To illustrate the proposed methodology we rank the French and the German universities involved in their respective 2008 Excellence Initiatives. |
| Keywords: | Composite indicators, Rankings, Benchmarking, Higher education institutions, Weighting schemes, Simulation techniques |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:ws112015&r=eur |
| By: | Christine Greenhalgh (Oxford University); Mark Rogers (Oxford University); Philipp Schautschick (University of Munich) |
| Abstract: | A common assumption in innovation policy circles is that creative and inventive firms will help to sustain employment and wages in high wage countries. The view is that firms in high cost production locations that do not innovate are faced with loss of market share from import competition, so jobs move to producers in developing countries with lower labour costs. Domestic firms are encouraged to innovate, and to obtain intellectual property assets to protect their innovations, so that they can sustain local employment and pay high wages. Policies to subsidise R&D and to encourage intellectual property protection are partly justified on these grounds. Nevertheless the available evidence concerning the employment and wage benefits of such activity is rather sparse. In this paper we first survey some existing literature on innovation and jobs. We outline arguments for using both patents and trade marks as indicators of innovation. We then construct a large sample of UK firms observed from 2000 to 2006, matching records of patents and trade marks to company data. We begin by estimating a cross section employment growth equation for 2003-2006 to discover if there is any impact of stocks of trade marks acquired in 2000-2003. We then explore in more detail the impact of recent trade mark and patenting activity on the level of employment and the average rate of pay in these firms. We do this using the data as a six year panel, estimating both an employment function and a relative earnings equation at the firm level. Our aim throughout is to identify and calibrate the assumed positive effects that underpin modern innovation policy. |
| Keywords: | patents, trademarks, innovation, labot costs, wages, firms |
| JEL: | D21 E22 H32 K13 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:1319&r=eur |
| By: | Eleni Karagiannaki |
| Abstract: | In this paper we document the evolution of the annual flow of inheritances in the UK during the period 1984-2005 and provide estimates for the overall magnitude and the distribution of inherited wealth. Our results indicate that the period under examination the annual flow of inheritance increased markedly, from £22 billion in 1984 to £56 billion in 2005. The main drivers behind this increase were the rise in house prices and to a lesser extent the increase in the proportion of inheritances which included housing assets. Our results, based on analysis of survey data, show that the distribution of inheritances is characterized by a very high degree of inequality (comparable by and large to that observed in personal wealth) and that this has increased over time. However, the inequality increasing effect from the greater inequality in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance. Our results also show that inheritance is positively associated with socio-economic status and that the disparities between groups became slightly more pronounced over time (mainly across educational groups). However, our evidence also shows that inheritance for the majority of recipients is fairly small and that large inheritances are limited to a very small minority of the population. |
| Keywords: | inheritance, wealth, intergenerational transfers, inequality |
| JEL: | D10 D31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/146&r=eur |
| By: | Sebastian Nielen; Alexander Schiersch |
| Abstract: | This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms. |
| Keywords: | temporary agency work, competitiveness, firm performance, manufacturing |
| JEL: | D24 L23 L60 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1135&r=eur |
| By: | Yu Sun |
| Abstract: | This paper investigates the degree of bank competition in the euro area, the U.S. and U.K. before and after the recent financial crisis, and revisits the issue whether the introduction of EMU and the euro have had any impact on bank competition. The results suggest that the level of bank competition converged across euro area countries in the wake of the EMU. The recent global financial crisis led to a fall in competition in several countries and especially where large credit and housing booms had preceded the crisis.. |
| Keywords: | Banks , Competition , Cross country analysis , Economic models , Euro Area , European Economic and Monetary Union , United Kingdom , |
| Date: | 2011–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/146&r=eur |