|
on Microeconomic European Issues |
| By: | Sahlgren, Gabriel H. (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Declining fertility rates and increasing life expectancy necessitate a higher labor participation rate among older people in order to sustain pension systems and boost economic growth. At the same time, researchers have only recently begun to pay attention to the health effects of a longer working life, with rather mixed results thus far. Utilizing panel data from eleven European countries, and two distinct identification strategies to deal with endogeneity, we provide new evidence of the health effects of retirement.In contrast to prior research, we analyze both the impact of being retired and the effect of spending longer time in retirement. Using spouses’ characteristics as instruments, while taking precautions to ensure validity, we find a robust, negative impact of being retired and spending longer time in retirement on selfassessed, general, mental and physical health.In addition, we show that the impact on selfassessed health remains similar in models using instruments from previous research while also including individual- and time-fixed effects to remove time-invariant unobserved heterogeneity between individuals as well as common health shocks.Overall, the results suggest that this innovation and the fact that we take lagged effects into account explain the differences in comparison to prior multi-country research using these instruments. While the short-term health impact of retirement in Europe remains uncertain, the medium- to long-term effects appear to be negative and economically large. |
| Keywords: | Health; Retirement; SHARE; SHARELIFE |
| JEL: | I10 J14 J26 |
| Date: | 2012–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0928&r=eur |
| By: | Stefano Federico (Bank of Italy) |
| Abstract: | This paper analyses the effect of competition from low-wage countries on domestic activity, using data on 230 Italian manufacturing sectors between 1995 and 2007. We find that low-wage import penetration is negatively related to employment and other measures of activity. The effect is significantly lower in more skill, capital and R&D-intensive sectors and in more vertically differentiated sectors. There is also evidence of significant effects of low-wage competition through inter-industry linkages: employment is negatively related to low-wage import penetration in downstream sectors but positively related to low-wage import penetration in upstream sectors. |
| Keywords: | import penetration; low-wage country competition; factor proportions; inter-industry linkages. |
| JEL: | F16 F14 L60 D57 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_879_12&r=eur |
| By: | Cristina Mocanu; Ana-Maria Zamfir; Eliza-Olivia Lungu; Eva Militaru |
| Abstract: | Education is one of the most important factors of allocation and matching on the labour market2. However, there are important cross-national differences with respect to unemployment rate of those with tertiary education, youth transition to the world of work and quality of jobs in which educated school leavers are employed3 4. School-to-work transition is a recently developed concept that is associated with change and uncertainty. For most young people, the integration on the labour market is long and difficult. School leavers are more vulnerable to unemployment due to the fact that they have to compete with more experienced workers for jobs while employers anticipate higher training costs for them. Moreover, as some skills acquired in school are not adapted to job requirements, young people experience difficulties at the labour market entry. On the other hand, labour market conditions are important determinants for youth transition performance. While there is a rich literature on school-to-work transition in Western countries, there is still a gap of knowledge in Eastern European ones. This paper explores patterns of labour market entry of higher education graduates in several Eastern European countries. We analyse HUGESCO data set that provides information on higher education graduates leaving education in 2002 and 2003 in four post-communist countries: Poland, Hungary, Lithuania and Slovenia. School leavers were interviewed in 2008 and offered information on their first and current job. We restrict our sample to individuals which have had paid work after graduation and explore three indicators for assessing the quality of their school-to-work transition: speed of labour market entry, stability and adequacy of insertion. Transition speed is measured by the duration to the first job, while stability of insertion is assessed by the duration of first employment spell. Both indicators are explored by using survival rate analyses. Finally, adequacy of insertion is measured by education-job mismatch at the first job. We study cross-national differences for the three indicators and their relation with individual, structural and institutional variables, including economic conditions, employment protection legislation index (OECD), mechanisms of finding employment, as well as features of the education system. This paper is organised as follows. The second chapter provides a review of the most important contributions in the field of school-to-work transition, with a special accent on higher education graduates. The third section includes a presentation of our data and methodology and the paper ends with the discussion of our results and conclusions together with outlining the theoretical and practical implications of our outcomes. |
| Keywords: | higher education, transition speed, employment spell, job mismatch, survival rate, labour market regulation |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2012/15&r=eur |
| By: | Benedicta Marzinotto |
| Abstract: | We run a standard income convergence analysis for the last decade and confirm an already established finding in the growth economics literature. EU countries are converging. Regions in Europe are also converging. But, within countries, regional disparities are on the rise. At the same time, there is probably no reason for EU Cohesion Policy to be concerned with what happens inside countries. Ultimately, our data shows that national governments redistribute well across regions, whether they are fiscally centralised or decentralised. It is difficult to establish if Structural and Cohesion Funds play any role in recent growth convergence patterns in Europe. Generally, macroeconomic simulations produce better results than empirical tests. It is thus possible that Structural Funds do not fully realise their potential either because they are not efficiently allocated or are badly managed or are used for the wrong investments, or a combination of all three. The approach to assess the effectiveness of EU funds should be consistent with the rationale behind the post-1988 EU Cohesion Policy. Standard income convergence analysis is certainly not sufficient and should be accompanied by an assessment of the changes in the efficiency of the capital stock in the recipient countries or regions as well as by a more qualitative assessment. EU funds for competitiveness and employment should be allocated by looking at each regionâ??s capital efficiency to maximise growth generating effects or on a pure competitive. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:754&r=eur |
| By: | Laura Cavalli (Department of Economics (University of Verona)) |
| Abstract: | This work aims at understanding whether, and the extent to which, the intention of having other children is influenced by aspects related to the employment sector chosen by “new” mothers (those who already have one child less than 2 years old). Using Italian data from the Birth Sample Survey conducted by the Italian National Statistical Institute (ISTAT) in 2005, this work models new mothers’ preferences for family formation and for “working conditions”, namely the sector of employment, taking into account the potential endogeneity of the latter. Working in the public sector, which benefits from stronger employment protection, tends to influence the desired and the realized fertility of working mothers. This could be due to the existence of a lower level of wage discrimination compared to the private sector, to the higher level of job security and to the existence of family friendly policies. However, the choice of the working sector could be endogenous. In fact, once the selection effect is taken into account and the choice of working sector and the desired fertility are modelled together, the correlation among unobservable women’s characteristics affecting the two choices is found to be negative: women who desire more children seem to be less likely to self-select into the public sector. This last finding could be the result of more productive women’s working strategies: given that they are those more work oriented (and less family-oriented), they tend to enter into the public sector, a less gender discriminated sector. |
| Keywords: | Desired Fertility, Total Demand for Children, Working Mothers, Public-Private Sector, Seemingly Unrelated Regression models |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:27/2012&r=eur |
| By: | Banting , Keith (Queens University School of Policy Studies); Kymlicka, Will (Queens University Department of Philosophy) |
| Abstract: | In much of the western world, and particularly in Europe, there is a widespread perception that multiculturalism has ‘failed’ and that governments who once embraced a multicultural approach to diversity are turning away, adopting a strong emphasis on civic integration. This reaction, we are told, “reflects a seismic shift not just in the Netherlands, but in other European countries as well” (JOPPKE 2007). This paper challenges this view. Drawing on an updated version of the Multiculturalism Policy Index introduced earlier (BANTING and KYMLICKA 2006), the paper presents an index of the strength of multicultural policies for European countries and several traditional countries of immigration at three points in time (1980, 2000 and 2010). The results paint a different picture of contemporary experience in Europe. While a small number of countries, including most notably the Netherlands, have weakened established multicultural policies during the 2000s, such a shift is the exception. Most countries that adopted multicultural approaches in the later part of the twentieth century have maintained their programs in the first decade of the new century; and a significant number of countries have added new ones. In much of Europe, multicultural policies are not in general retreat. As a result, the turn to civic integration is often being layered on top of existing multicultural programs, leading to a blended approach to diversity. The paper reflects on the compatibility of multiculturalism policies and civic integration, arguing that more liberal forms of civic integration can be combined with multiculturalism but that more illiberal or coercive forms are incompatible with a multicultural approach. |
| Keywords: | Multiculturalism; immigration; civic integration; citizenship |
| JEL: | J15 J18 |
| Date: | 2012–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2012_004&r=eur |
| By: | Vincent Hogan (University College Dublin); Patrick Massey (Compecon Ltd); Shane Massey (Trinity College Dublin) |
| Abstract: | The economic literature on professional sports leagues suggests supporters’ utility depends on uncertainty of outcome (competitive balance) and the quality of play. Unlike soccer, where the Champions League is dominated by teams from larger countries, our analysis indicates that the ERC exhibits high degrees of both dynamic and inter-league competitive balance. Using data from 1,096 matches played over 17 seasons, we analyse match attendances in the pool stages of the European Rugby Cup (ERC), a competition that involves teams from the three main European rugby leagues. The results indicate that the quality of the home team is the main determinant of match attendances, although a strong visiting team also raises attendances. Medium-term (seasonal) uncertainty, which has received less attention in the literature, appears far more important than short-run (match) uncertainty. Measures designed to make matches more attractive, e.g. bonus points for high scoring, appear to have had little effect on attendances. |
| Keywords: | Professional team sports, competitive balance, consumer demand |
| JEL: | D12 D21 L22 L23 L83 |
| Date: | 2012–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201228&r=eur |
| By: | Lührmann, Melanie; Serra-Garcia, Marta; Winter, Joachim |
| Abstract: | We report the results of a field experiment evaluating the impact of financial literacy training on teenagers of between 14 and 16 years of age in lower stream high schools in Germany. Before the training, teenagers in treatment and control groups show little interest in financial matters and low levels of self-assessed knowledge. After the training, teenagers exhibit a significant increase in both their interest in financial matters and their self-assessed knowledge. Their objective knowledge also increases in some dimensions, e.g. their ability to assess risks correctly. We find that after the training, the prevalence of impulse purchases decreases, so teenagers can be steered towards being more sovereign consumers. We also find an increase in intended savings in a hypothetical task. Finally, our data show that already at these young ages, there are strong gender differences in all dimensions of financial matters: financial knowledge, motivation, and behavior. |
| Keywords: | financial literacy; financial knowledge; field experiment |
| JEL: | C93 D14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:14101&r=eur |
| By: | Neil Foster (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper examines the development of exports within the expanded European Union over the period 2000-2007. The paper addresses the issues of how and why within-bloc exports have developed following accession. The paper shows that exports within CEFTA and within other accession countries have grown more quickly than those between old EU members, but that after accounting for traditional gravity determinants there has been no significant change in this behaviour following accession in 2004. As such, this is likely to reflect a natural realignment of trade patterns following the communist era, as well as the relatively stronger performance of the new entrants when compared with existing EU members. The results also indicate that much of the increase in exports within the accession countries has been due to an increase in the variety of products traded, rather than an increase in the volume of existing products. |
| Keywords: | trade, intensive and extensive margins, gravity model, EU accession |
| JEL: | F15 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:87&r=eur |
| By: | Mark E. McGovern (Harvard Center for Population and Development Studies and University College Dublin) |
| Abstract: | Early life conditions have been linked to various domains of later life health, including cardiovascular outcomes. Using life history data from 13 European countries, I find that childhood socioeconomic status and measures of childhood health are related to hypertension, although there is cross country heterogeneity in these effects. I account for potential omitted variable bias by using aggregate measures of public health at birth, which are plausibly exogenous to the individual. I find that infant mortality at birth is positively related to hypertension, even allowing for cohort effects, and controlling for GDP at birth. Results imply that improvements in early life conditions in Europe led to an overall reduction in the hypertension rate of between 3 and 6 percentage points, for the cohort born 1931-1935, relative to the cohort born 1956-1960. An alternative strand of literature in epidemiology links contemporaneous factors, such as work place environment, to heart disease. However, theories of life cycle decision making suggest that individuals may be selected into these adverse environments and behaviours on the basis of their initial conditions. I demonstrate a strong association between early environment and these risk factors. Results imply that these should therefore be viewed as outcomes which lie on the causal pathway between initial conditions and later outcomes, in which case ignoring this selection will misattribute at least part of the effects of early life environment to current circumstance. This has important policy implications for targeting hypertension as it indicates that emphasis should also be placed on combatting disadvantage across the life course, rather than just factors which only manifest themselves in adulthood. |
| Keywords: | Early life conditions, hypertension, work stress, infant mortality, health behaviour |
| JEL: | I12 I14 N34 J11 |
| Date: | 2012–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201223&r=eur |
| By: | Bredemeier, Christian (TU Dortmund); Juessen, Falko (TU Dortmund) |
| Abstract: | In Germany, there is a vivid political debate on introducing a general statutory minimum wage. In this paper, we study the effects of minimum wages on labor supply using a structural household model where we distinguish between married and single households. In the model, labor supply of married women reacts positively and relatively strongly to minimum wages which we model as a wage subsidy as proposed in the German political debate. By contrast, other population subgroups show ambiguous reactions. An empirical analysis for Germany shows that minimum wages would affect total labor supply only weakly. Yet, in our baseline experiments, average labor supply of married women increases by 3-5%, whereas hours supplied by married female recipients of the minimum wage may increase by up to 28%. Further, we find that costs of a subsidized minimum wage increase sharply in its level while its effects on labor supply level out. |
| Keywords: | minimum wage, wage subsidies, labor supply, gender |
| JEL: | J22 J16 J38 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6892&r=eur |
| By: | Scherger, Simone; Hagemann, Steffen; Hokema, Anna; Lux, Thomas |
| Abstract: | The paper investigates paid work beyond retirement age in Germany and the UK. This comprises a combination of work, payments from a pension (or several pensions) and old age which is counter to the assumed finality of retirement and the corresponding standardised passage from end of work into retirement and receipt of a pension. Paid work beyond retirement has not only become more frequent in the last decade, but is also part of heated policy debates on pension reform. The paper first gives a comprehensive literature review, presenting empirical results, conceptual differentiations and theoretical approaches to post-retirement work from previous studies. A heuristic model summarises the most important individual and structural influences on post-retirement work. Thereafter, the most important features of the pension systems and labour markets in Germany and in the UK are outlined. In terms of institutional settings, the countries represent opposing cases whose comparison helps to better understand the institutional factors shaping employment beyond retirement age. In the second half of the paper, data from the German Ageing Survey (DEAS) and the English Longitudinal Study of Ageing (ELSA) serve to empirically describe paid work beyond retirement age. In addition to the demographic and regional distribution of postretirement work, particular attention is paid to the socio-economic status of people working past retirement, in comparison to those who do not work. Other important areas studied are non-paid activities of post-retirement workers, their health and living arrangements as well as their life satisfaction and subjective reasons for employment. On the one hand, the results of the empirical description confirm the privileged situation of many post-retirement workers who, for example, tend to be more highly educated and have better health than their non-working counterparts. On the other hand, some post-retirement workers work for financial reasons and in the low-paid service sector. There are some indications that the latter group, who experience post-retirement work more often as a burden, or at least in a more ambivalent way, is larger in the UK than in Germany, mainly for institutional and structural reasons. -- Dieses Arbeitspapier beschäftigt sich mit Erwerbsarbeit jenseits der Rentengrenze in Deutschland und Großbritannien. Mit Erwerbsarbeit jenseits der Rentengrenze ist eine Kombination von bezahlter Arbeit, Rentenzahlungen und Alter gemeint, die im Kontrast steht zur Endgültigkeit des Ruhestands und dem entsprechenden standardisierten Übergang aus der Erwerbsarbeit in den Ruhestand und zum Empfang von Rentenzahlungen. Erwerbsarbeit jenseits der Rentengrenze ist in den letzten zehn Jahren nicht nur häufiger geworden; sie wird auch intensiv debattiert, etwa im Rahmen von Diskussionen zu Rentenreformen. Das Arbeitspapier gibt zunächst einen umfassenden Literaturüberblick, der bisherige empirische Ergebnisse, konzeptuelle Differenzierungen und theoretische Annäherungen an Erwerbsarbeit jenseits der Rentengrenze einschließt. Ein heuristisches Modell fasst die wichtigsten individuellen und strukturellen Einflüsse auf Arbeit jenseits der Rentengrenze zusammen. Anschließend werden sowohl die Rentensysteme als auch die Arbeitsmarktstrukturen Deutschlands und Großbritanniens in groben Zügen beschrieben. Was den institutionellen Rahmen angeht, repräsentieren die beiden Länder zwei gegensätzliche Fälle, deren Vergleich dazu beiträgt, die institutionellen Faktoren zu verstehen, welche Erwerbsarbeit jenseits der Rentengrenze prägen. In der zweiten Hälfte des Arbeitspapiers werden Daten des Deutschen Alters-Surveys (DEAS) und der English Longitudinal Study of Ageing dazu genutzt, Erwerbsarbeit jenseits der Rentengrenze empirisch zu beschreiben. Über die soziodemographischen Charakteristika von erwerbstätigen Rentnern und die regionale Verteilung dieser Form von Arbeit hinaus wird dem sozio-ökonomischem Status erwerbstätiger Rentner im Vergleich zu anderen Rentnern besondere Aufmerksamkeit gewidmet. Außerdem werden unbezahlte Aktivitäten erwerbstätiger Rentner, ihre Gesundheit und Lebensformen sowie ihre Lebenszufriedenheit und die subjektiven Gründe für ihre Arbeit beschrieben. Einerseits bestätigen die Ergebnisse der Beschreibung die eher privilegierte Situation erwerbstätiger Rentner, die beispielsweise eine bessere Bildung aufweisen und gesünder sind als nicht-erwerbstätige Rentner. Andererseits gibt es erwerbstätige Rentner, die aus finanziellen Gründen und im schlechtbezahlten Dienstleistungssektor arbeiten. Einiges deutet darauf hin, dass die letztgenannte Gruppe, die ihre Arbeit häufiger als eine Bürde oder zumindest ambivalent erlebt, in Großbritannien größer ist als in Deutschland, und zwar vor allem aus institutionellen und strukturellen Gründen. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zeswps:042012&r=eur |
| By: | Mathieu Bunel (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France); Gilles Reveaud (Institut d’Etudes Européennes, Université Paris 8 Saint-Denis) |
| Abstract: | We used a French employer–employee representative survey to estimate, within private firms covered by union contracts, the union member wage premium. Our estimates are based on several methods: ordinary least squares with averaged individual characteristics at the workplace level, the propensity score and separated equations. We found no wage penalty for free riders, except for blue collar and office workers. But even for these workers, the estimated wage premium is very small. Globally, in France, union membership does not seem to be motivated by monetary raisons. This situation could explain the low level of union membership observed. |
| Keywords: | Union wage premium, union membership, employer-employee data, propensity score method, separated equations method |
| JEL: | J31 J71 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201232&r=eur |
| By: | Görg, Holger (Kiel Institute for the World Economy); Görlich, Dennis (Kiel Institute for the World Economy) |
| Abstract: | We investigate the impact of offshoring on individual level wages and unemployment probabilities and pay particular attention to the question of whether workers on temporary contracts are affected differently than workers on permanent contracts. Data are taken from the German Socio-Economic Panel (SOEP), linked with industry-level data on offshoring of materials and services inputs calculated from the World Input Output Database (WIOD). In manufacturing we find that temporary workers face a significant reduction in wages as materials offshoring increases, while permanent workers' wages are unaffected or even tend to increase. Offshoring of core activities generally also tends to reduce the probability of becoming unemployed, and more so for temporary than for permanent workers. By contrast, offshoring of services inputs does not have any statistically significant effects on either wages or employment probabilities in manufacturing. In the service industries, workers are affected in terms of employment probabilities from offshoring of services inputs only, although, in contrast to manufacturing industries, there are no statistically significant effects on individual wages from any type of offshoring. |
| Keywords: | offshoring, temporary work, job security, wages |
| JEL: | J31 F14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6897&r=eur |
| By: | Schneider, Friedrich (University of Linz); Buehn, Andreas (Utrecht University) |
| Abstract: | In this paper the main focus lies on 'driving forces' of the development and size of the shadow economy in highly developed 39 OECD countries. The influential factors on the shadow economy are tax policies and state regulation, which, if they rise, increase the shadow economy, but also other factors like economic ones (unemployment) are considered, too. Specifically it is shown that the main driving forces are unemployment, self-employment and the tax burden, which have different weights in these 39 countries. Between 1999 and 2010 indirect taxes have by far the largest relative impact (29.4%), followed by self-employment (22.2%), unemployment (16.9%), personal income taxes (13.1%) and tax morale (9.5%). |
| Keywords: | state regulation, tax pressure, tax morale, shadow economy, undeclared work |
| JEL: | K42 H26 D78 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6891&r=eur |
| By: | Thierry MAYER (Sciences-Po, CEPII, CEPR); Florian MAYNERIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Loriane PY (Banque de France) |
| Abstract: | In this paper, we study the impact of a French enterprise zones program the "Zones Franches Urbaines" (ZFUs) policy on establishments' location decisions. Our empirical analysis is based on a micro-geographic dataset which provides exhaustive information on the location of establishments in France over the period 2000-2007 at the census block level. We use a difference in difference approach combining spatial and time differencing. We also do triple difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. Our results show that the French ZFU policy has a positive and sizable impact on location choices. However, we also find that the policy mostly generates displacement effects, in particular through relocation of firms from the un-treated to the treated part within municipalities. Finally, the impact is shown to be highly heterogeneous across zones, firms and industries. The overall cost of moving establishments within municipalities is relatively high. |
| Keywords: | firm location, enterprise zones, spatial differencing |
| JEL: | R12 R38 R58 |
| Date: | 2012–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2012019&r=eur |
| By: | Vogel , Alexander (Leuphana University Lueneburg); Wagner, Joachim (Leuphana University Lueneburg and IZA, Bonn) |
| Abstract: | This paper contributes to the literature by providing the first evidence on the link between innovation activities (measured by the share of engineers and scientists in the workforce) and exports of German business services firms based on a large representative longitudinal sample of enterprises. The data combine for the first time information at the firm-level that is taken from data produced by the Statistical Offices and by the Federal Labour Agency. We document that R&D activities are positively linked with exports, and that this link is present when observed firm characteristics (including firm size, productivity, and human capital intensity) and unobserved time-invariant firm characteristics are controlled for. From an economical point of view the effect is, however, rather small. Furthermore, we find some evidence for self-selection of innovative services firms on export markets. We have to admit, however, that the panel is too short, and that the number of firms that start to export and start to perform R&D during the period under investigation is too small, for any convincing attempt to investigate the direction of the causal link between exports and innovation activities. |
| Keywords: | Innovation; export; business services; Germany |
| JEL: | F14 |
| Date: | 2012–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0285&r=eur |
| By: | Hartmann-Wendels, Thomas; Stein, Ingrid; Stöter, Alwin |
| Abstract: | This paper provides new evidence that taxes affect capital structure choice, using a unique and comprehensive panel data set which covers 86,173 German non-financial firms over the years 1973-2008. Following the Graham methodology to simulate marginal tax rates, we find a statistically and economically significant positive relationship between the marginal tax benefit of debt (net and gross of investor taxes) and the debt ratio. A 10% increase in the net (gross) marginal tax benefit of debt causes a 1.5% (1.6%) increase in the debt ratio, ceteris paribus. The results are robust to various specifications like using changes in debt or debt to capital ratios. A significantly positive effect of taxes on the debt ratio can also be identified in a partial adjustment model. -- |
| Keywords: | debt,capital structure,marginal tax rate,corporate taxes,personal taxes |
| JEL: | G32 H20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:182012&r=eur |
| By: | Zurimendi, Aitor; Ciarreta Antuñano, Aitor; Espinosa Alejos, María Paz |
| Abstract: | The European Commission Report on Competition in Professional Services found that recommended prices by professional bodies have a significant negative effect on competition since they may facilitate the coordination of prices between service providers and/or mislead consumers about reasonable price levels. Professional associations argue, first, that a fee schedule may help their members to properly calculate the cost of services avoiding excessive charges and reducing consumers’ searching costs and, second, that recommended prices are very useful for cost appraisal if a litigant is condemned to pay the legal expenses of the opposing party. Thus, recommended fee schedules could be justified to some extent if they represented the cost of providing the services. We test this hypothesis using crossâ€section data on a subset of recommended prices by 52 Spanish bar associations and cost data on their territorial jurisdictions. Our empirical results indicate that prices recommended by bar associations are unrelated to the cost of legal services and therefore we conclude that recommended prices have merely an anticompetitive effect. |
| Keywords: | professional associations, recommended prices, anticompetitive conduct |
| JEL: | K21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:dfaeii:8765&r=eur |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This study uses newly available enterprise level data for firms from manufacturing industries in Germany to test for the link between credit constraints, measured by a credit rating score from the leading credit rating agency Creditreform, and exports. In line with hypotheses from theoretical model we find a positive link between a better credit rating score of a firm and both the probability that the firm is an exporter and a higher share of exports in total sales. This link, though statistically highly significant, is not very strong from an economic point of view. While empirical evidence for the hypothesis that credit constrained firms are less likely to start to export is at best weak, we find no evidence for a statistically significant difference in credit rating scores between firms that stopped to export and firms that continued to export. |
| Keywords: | Credit constraints, exports, Germany |
| JEL: | F14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:251&r=eur |