nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒05‒11
sixteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The effect of employee workplace representation on firm performance. A cross-country comparison within Europe By Van den Berg A.; Grift Y.; Van Witteloostuijn A.; Boone Ch.; Van der Brempt O.
  2. Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries By Chiara Franco; Alberto Marzucchi; Sandro Montresor
  3. The Heterogeneous Effects of Workforce Diversity on Productivity, Wages and Profits By Garnero, Andrea; Rycx, Francois
  4. The Clothing Export Performance and Prospects for Advanced and Emerging Economies: Evidence from a Panel Data Analysis (new version) By Donatella Baiardi; Carluccio Bianchi; Eleonora Lorenzini
  5. The 2012 EU Survey on R&D Investment Trends By Fernando Hervas Soriano; Joerg Zimmermann
  6. Do immigrants follow their home country's fertility norms? By Cygan-Rehm, Kamila
  7. NETWATCH Mapping and Monitoring: Second and Third Exercises By Nida Kamil Ozbolat; Nicholas Harrap; Mark Boden
  8. Projection of R&D-intensive enterprises' growth to the year 2020: Implications for EU policy? By Peter Voigt; Pietro Moncada-Paterno-Castello
  9. The impact of regulatory compliance behavior on hazardous waste generation in European private healthcare facilities By Anabela Botelho
  10. How Much do We Care about Air Quality Improvements? Evidence from Italian Households Data By Chiara Martini; Silvia Tiezzi
  11. Ora et non Labora? A Test of the Impact of Religion on Female Labor Supply By Pastore, Francesco; Tenaglia, Simona
  12. Commercialization of academic research. A comparison between researchers in the U.S. and Finland By Nikulainen, Tuomo; Tahvanainen, Antti-Jussi
  13. Which firms train disadvantaged youth? By Jens Mohrenweiser
  14. Does Cultural Heritage affect Employment decisions – Empirical Evidence for Second Generation Immigrants in Germany By Anja Koebrich Leon
  15. The private and social monetary costs and the energy consumption of a car. An estimate for seven cars with different vehicle technologies on sale in Italy By Rusich, Andrea; Danielis, Romeo
  16. Testing for Persistence in Housing Price-to-Income and Price-to-Rent Ratios in 16 OECD Countries By Christophe Andre; Luis A. Gil-Alana; Rangan Gupta

  1. By: Van den Berg A.; Grift Y.; Van Witteloostuijn A.; Boone Ch.; Van der Brempt O.
    Abstract: In this paper, we contribute to the extant Industrial Relations literature, which is almost completely confined to estimating the effects of worker participation within a single country, by conducting a comparative multi-country study using unique data from the European Company Survey 2009. We compare representation regimes within the European Union. We categorize the EU Member States into five clusters with similar participation characteristics: the Germanic, French, Anglo-Saxon, Scandinavian and transition cluster. Across these clusters, we first estimate the effects of the presence of what we refer to as an information and consultation body on firm performance, measured by economic performance of the establishment as assessed by managers-respondents. Second, we estimate the effects of managerial attitudes on performance, as we assume – and find – that only taking into account the mere presence of a worker representation is insufficient, as mutual understandings between management and employee representatives affect the functioning of the employee representation body, and hence firm performance.
    Date: 2013–04
  2. By: Chiara Franco (Catholic University of Milan); Alberto Marzucchi (Catholic University of Milan); Sandro Montresor (JRC-IPTS)
    Abstract: The paper aims at extending the analysis of the firm’s absorptive capacity (AC) by taking stock of its manifold nature. Innovation cooperation is recognised as one of its antecedents, along with R&D, but with different possible outcomes, depending on the kind of partner. Human capital is claimed to be as important as other organisational mechanisms for the AC impact on innovation. The empirical application, carried out on about 10,500 firms located in 3 EU countries (i.e. Germany, Italy and Spain), confirms the role of these factors. Interacting with research organisations, for example, increases the firm’s AC providing it occurs within the national boundaries. The transformation of AC into actual innovation is favoured by the human capital of the firm, while it is actually hampered by socialisation mechanisms of an organisational nature.
    Keywords: Absorptive capacity, Innovation cooperation, Human capital
    JEL: O33 O32 J24
    Date: 2012–11
  3. By: Garnero, Andrea (Paris School of Economics); Rycx, Francois (Free University of Brussels)
    Abstract: We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/ knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.
    Keywords: wages, productivity, labour diversity, linked panel data, GMM
    JEL: D24 J24 J31 M12
    Date: 2013–04
  4. By: Donatella Baiardi (Department of Economics and Management, University of Pavia); Carluccio Bianchi (Department of Economics and Management, University of Pavia); Eleonora Lorenzini (Department of Economics and Management, University of Pavia)
    Abstract: This paper studies the clothing export performance of twelve top exporting countries (China, Honk Kong, France, Germany, India, Indonesia, Italy, Netherlands, Spain, Turkey, UK and USA) in the period between 1992 and 2011. Price and income elasticities are estimated for each country, after controlling for nonstationarity, cointegration and Granger causality. Price elasticities estimates are used, together with market shares and unit values dynamics, to assess the export performance and prospects of the various countries. A multifarious picture emerges from the analysis, whereby China plays the role of uncontested leader, but not all the advanced European countries, which are supposed to be more severely hit by the competition of the low-labour costs countries, definitely lose competitiveness, since different outcomes are possible according to the specific price and quality strategies adopted.
    Keywords: Clothing, Price elasticity, Income elasticity, Export Performance, Product Quality, Panel Granger causality
    JEL: F10 F14 O10
    Date: 2013–04
  5. By: Fernando Hervas Soriano (JRC-IPTS); Joerg Zimmermann (JRC-IPTS)
    Abstract: This report presents the findings of the seventh survey on trends in business R&D investment. These are based on 187 responses of mainly larger companies from the 1000 EU-based companies in the 2011 EU Industrial R&D Investment Scoreboard. These 187 companies are responsible for R&D investment worth almost €56 billion, constituting around 40% of the total R&D investment by the 1000 EU Scoreboard companies. The main result is that these top R&D investing companies expect their global R&D investments to grow by 4% annually from 2012 to 2014. The average share of sales coming from new innovative products and services was 18%, varying from 33% in high R&D intensity sectors to 10% in low R&D intensity ones. The differences between the sectors were not in all cases related to R&D intensity or net sales of the companies but rather seemed to reflect different sectoral innovation cycles. Collaboration agreements are considered a more important form of knowledge sharing activities than licencing (except for high R&D intensity sectors), which could be a sign of the increasing importance of open innovation. For the impact of factors and policies on the company’s innovation activities, national public support had the most positive effect, followed by availability of qualified personnel and EU public support. As in previous surveys, labour costs and conditions of IPR (enforcement, time and costs) continued to be perceived as negative factors for company innovations. This reveals the importance of fostering an efficient IPR regime for companies’ innovation activities.
    Keywords: Industrial Economics, Corporate R&D and innovation; productivity; business trends; technological innovation; intangible assets; competitiveness; growth and employment; company growth; Europe 2020 strategy.
    Date: 2012–07
  6. By: Cygan-Rehm, Kamila
    Abstract: This paper focuses on the role of home country's birth rates in shaping immigrants' fertility. We use the German Socio-Economic Panel (SOEP) to study completed fertility of first generation immigrants who arrived from different countries and at different times. We find that women from countries where the aggregate birth rate is high tend to have significantly more children than women from countries with low birth rates. This relationship is attenuated by selection operating towards destination country. In addition, the fertility rates of source countries explain a large proportion of fertility differentials between immigrants and German natives. The results suggest that home country's culture affects immigrants' long-run outcomes and therefore favor the socialization hypothesis. --
    Keywords: migration,fertility,socialization,culture,Germany
    JEL: J13 J15 Z10 Z13
    Date: 2013
  7. By: Nida Kamil Ozbolat (JRC-IPTS); Nicholas Harrap (JRC-IPTS); Mark Boden (JRC-IPTS)
    Abstract: The work presented in this report is based on mapping exercises providing a descriptive analysis of the networks included in the NETWATCH database (i.e. active ERA-NETs, ERA-NET Plus, Article 169/185s and self-sustaining networks). Building on previous reports, with the addition of a time dimension, through periodic collection and analysis of network data, the report monitors the landscape of schemes and provides an analysis of key aspects of the evolution of research programme cooperation within Europe. These findings aim to support policy makers to make informed decisions on the future design and implementation of related initiatives.
    Keywords: European research and innovation policy, ERAWATCH, European Research Area, Policy Mixes, Transnational and International Cooperation; NETWATCH; ERA Nets; Foresight; Joint programming of research; Researchers, Universities; European Foresight Platform (EFP); modelling, linking Qualitative and Quantitative methods.
    Date: 2013–01
  8. By: Peter Voigt (University of Barcelona); Pietro Moncada-Paterno-Castello (JRC-IPTS)
    Abstract: The paper investigates how sector composition and the magnitude of R&D investment in the EU may differ in 2020 in comparison to the past, if a selection of top R&D-investing SMEs were assumed to be on a fast growth track while the top R&D-investing large-scale companies continue to grow as before. The background of this research objective is the emerging focus on SMEs – and in particular the fast-growing among them – with regard to the "Europe 2020" policy strategy. The study relies on the sample of top R&D-investing firms as given by the latest available "EU Industrial R&D Investment Scoreboard" editions, building there from an unbalanced panel. Scenarios were developed by distinguishing SMEs' assumed growth paths vs. that of large scale companies. A lin-ear prediction model has been used to calculate the scenario simulations. Overall, the study indicates that if one expects the (R&D-intensive) small firms to be a driving force for a substantial structural change in the EU economy, from being driven by medium-tech sectors towards a high-tech based economy, it requires either a significant longer-term horizon of the assumed fast growth track than the simulated 10 years, or small firms' growth figures which even exceed the assumed annual 30% (as in the most optimistic scenario). Neither case appears to be particularly realistic. Hence, we need more top R&D investors in Europe to further intensify their engagement in R&D (increasing volume and R&D intensity) as well as numerous small firms that start and/or significantly increase their existing R&D activities and thus seek to become large firms and (global) leading R&D investors. Accordingly, a broad R&D and innovation (policy) strategy is needed with policy interventions which also target well all these options; i.e. stimulating firm growth and R&D and innovation-intensity across firm-sized classes.
    Keywords: Industrial Economics, Corporate R&D and innovation; productivity; business trends; technological innovation; intangible assets; competitiveness; growth and employment; company growth; Europe 2020 strategy.
    JEL: L11 L25 R38
    Date: 2012–03
  9. By: Anabela Botelho (NIMA, Universidade do Minho)
    Abstract: Along with the increased provision of healthcare by private outpatient healthcare facilities within the EU countries, there is also an increase on waste generation from these facilities. A significant fraction of this waste is amongst the most hazardous of all wastes arising in communities, posing significant risks to people and the environment if inappropriately managed. The growing awareness that mismanagement of healthcare waste has serious environmental and public health consequences is reflected in the European waste legislation, aiming at waste prevention at the source and emphasizing the “management” aspects of the waste management process. Whether the increasingly large numbers of private healthcare facilities comply with the existing European waste legislation, and whether compliance with such legislation affects the fraction of healthcare waste classified as hazardous is an understudied subject. Using a large survey of private outpatient healthcare facilities, this study finds that although compliance with the law is far from ideal, it is the strongest factor influencing hazardous waste generation. These findings suggest that more public investments in monitoring healthcare facilities’ compliance with the law in EU countries is warranted, along with increased efforts to raise the facilities’ awareness of the cost savings brought about by compliance with the existing healthcare waste legislation.
    Date: 2013–04
  10. By: Chiara Martini; Silvia Tiezzi
    Abstract: The purpose of this study is to identify the drivers of the Willingness to Pay (WTP) for air quality improvements in Italy. A better understanding of which factors, besides income, influence the willingness to pay for air quality improvements is important to guide future air quality policy. We estimate the WTP for air quality improvements in Italy using a novel approach (Ebert, 2007) and a unique dataset obtained by merging data on Italian households’ monthly current expenditure and information on a bundle of air pollutants’ concentrations. We find a WTP for air quality improvements between 2 and 10 Euros/month per household. We then consider how WTP varies by location of the household, the level of air quality and over time. We find higher WTP values for the Northwest and the Centre of Italy where the big metropolitan areas are located. We also observe that the WTP for air quality improvements declines as the level of air quality improves. Finally, the value of improvements in air quality decreases over time, maybe signaling a change of preferences.
    Keywords: Willingness to Pay, Air Quality Improvements, Demand Systems
    JEL: H22 H23 D63
    Date: 2013–05
  11. By: Pastore, Francesco (University of Naples II); Tenaglia, Simona (ISFOL)
    Abstract: This paper examines the influence of religion on female participation to the labor market using data relative to women aged between 18 and 60 years in 47 European countries drawn from the European Values Study (EVS). We investigate the determinants of the probability of being employed rather than jobless in a LOGIT framework. The results show that women belonging to the Orthodox and, even more, Muslim denominations present a higher risk of non-employment than the agnostics, while being a Protestant increases the probability for a woman to be employed. Although its intensity is slightly weakening, the association between religious affiliation and female labor supply is robust to different sets of controls for individual and household heterogeneity as well as for welfare regimes and country specificities. Once disentangling religiously active and non-active women, we find that there are small differences between them in the case of the Orthodox and Muslim women, while active Catholic women tend to work less and non-active Protestant women tend to work more than average.
    Keywords: female labor supply, religion, welfare state regimes, child care
    JEL: D1 H75 J13 J16 J22 N30 Z12
    Date: 2013–04
  12. By: Nikulainen, Tuomo; Tahvanainen, Antti-Jussi
    Abstract: This paper aims to identify factors that relate to scientists’ propensity to make commercially significant scientific discoveries (inventions) and to describe how these inventions are commercialized. Based on a large survey of academics active in different fields of science at U.S. universities, the paper benchmarks the top 20 universities against the rest, identifying the impact of different institutional settings. To highlight the institutional setting, the paper also compares these results to similar survey data from Finland, representing a small, highly educated European country. This comparison addresses the ‘European paradox’ in university technology commercialization, which is characterized by high investments in university research and disappointingly low levels of inventions and related commercialization activity. The results show that the likelihood of making commercially valuable scientific discoveries in the U.S. is driven by motivations related to the identification of commercial opportunities and working in interdisciplinary research environments. There are also significant differences between the various fields of science. In the top U.S. universities, the funding sources for scientists more likely to make inventions are more diversified and unique. The results for Finland are surprisingly similar, suggesting that the cause of the ‘European paradox’ seems to originate in the commercialization of inventions rather than their generation. When focusing on inventors who actively pursue commercial goals, both U.S. and Finnish inventors prefer licensing as the most popular way of taking scientific discoveries to the market. Consulting and entrepreneurship rank second and third, respectively. The countries differ with respect to both the inventors’ motivations to commercialize inventions and their reasons to refrain from it. In Finland, the motivations for not pursuing commercial opportunities are much more prominent than among U.S. scientists.
    Keywords: academic inventions, innovation, commercialization of research, academic entrepreneurship
    JEL: O30 O38 O33 O34
    Date: 2013–05–03
  13. By: Jens Mohrenweiser (Zentrum für Europäische Wirtschaftsforschung Mannheim (ZEW) (Centre for European Economic Research))
    Abstract: The integration of disadvantaged youth into the labour market is a challenging policy issue. Since young people gain most from work experience and learning provided by firms, hence within apprenticeships, firms play a crucial role in training disadvantaged youths. Knowing firm characteristics that moderate the selection of firms in such training schemes might help to design more effective and efficient policy measures. This paper estimates the determinants of firms that participate in a training programme for disadvantaged youth in Germany. The paper shows that firms with greater training capacity in terms of full-time instructors and own training facilities and firms willing to invest own additional resources in the training of disadvantaged youth are more likely to participate in this training scheme. On the contrary, firm size, an increasing demand for skilled workers and difficulties in finding apprentices do not influence the participation.
    Keywords: disadvantaged youth, apprenticeship, policy evaluation
    JEL: J24 M53 M51
    Date: 2013–05
  14. By: Anja Koebrich Leon (Institute of Economics, Leuphana University Lueneburg, Germany)
    Abstract: The participation rate of women in the labor market shows a sizeable variation across countries and across time. Following studies conducted for North America, this section tests the hypothesis whether, next to structural conditions, cultural norms with regard to existing role models within society about working women influence a woman’s participation decision. While using the epidemiological approach to economics, which aims to compare economic outcomes between immigrant groups to assess the role cultural factors may play, the persistence of heterogeneity in labor market outcomes across immigrant groups is used to assess the role cultural norms regarding working women may play in explaining differences in labor market outcomes between immigrant groups for first and second generation women in Germany. To overcome the problems associated with a qualitative proxy of culture, such as religiosity or ethnicity, the impact of culture on women working behavior is proxied by past female labor force participation (LFP) rates from the woman’s country of origin or their parents, respectively. Using data from the GSOEP for the years 2001 to 2011, compared to findings from Fernández and Fogli (2009) and Gevrek et al 2011, which use large census data sets, I find statistically significant results for the association between cultural norms towards labor market behavior of women, as measured either by past female LFP in country of origin, country of origin indicator variables or attitudes towards working women prevalent in their home country, merely for first generation immigrants in Germany. However, while cultural heritage was found to play an inferior role for second generation immigrant women, religious identity, as a specific cultural trait, exhibits a strong negative relation with Muslim labor market behavior for both generations.
    Keywords: female labor force participation; cultural norms; ethnicity; ethnic identity; religious identity
    JEL: J15 J21 Z10
    Date: 2013–04
  15. By: Rusich, Andrea; Danielis, Romeo (University of Trieste, Italy)
    Abstract: This paper estimates the total private and social cost of seven cars (the gasoline VW Polo, the diesel Ford Fiesta, the CNG Fiat Punto Evo Natural Power, the LPG Alfa Romeo MiTo, the Hybrid Toyota Yaris, the BEV with leased-battery Renault Zoe and the BEV Peugeot iOn.), making use of the Italian data with reference to the vehicles’ purchase and maintenance costs, fuel and electricity costs, energy mix, pollution and noise costs. Among the selected cars, the diesel Ford Fiesta currently performs best from the private and social cost as well as energy consumption point of view. From the social point of view, both the Toyota Yaris (Hybrid) and the Alfa R. MiTo (bi-fuel LPG) perform as well as the BEVs, and the absolute difference with the conventional fuel cars is quite small. A scenario analysis is also performed to evaluate how the cars’ ranking is affected by how many years a car is kept, by how many kilometers per year a car is driven, by the subsidies enacted by the Italian government, by an increase in the price of fuel and by a decrease in the price of the batteries.
    Date: 2013
  16. By: Christophe Andre (Economics Department, Organisation for Economic Co-operation and Development (OECD)); Luis A. Gil-Alana (University of Navarra, Faculty of Economics, Edificio Biblioteca, Entrada Este, E-31080 Pamplona, Spain); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: Housing price-to-income and price-to-rent ratios are among the most widely monitored indicators of housing market conditions. While these ratios tend to fluctuate around a constant level or a mild trend over the long term, they also tend to deviate from these benchmarks for protracted periods. Traditional unit root tests often indicate the presence of a unit root. This paper uses the framework of fractional integration to test the persistence of price-to-income and price-to-rent ratios in a sample of 16 OECD countries spanning four decades. The results indicate that the ratios are highly persistent. The possibility that persistence estimates may be affected by structural breaks in the series is also considered, but evidence of such breaks is found only in a very limited number of cases. Policy action may be required if high price-to-income and price-to-rent ratios have adverse social and economic consequences. Policies should be guided by a careful analysis of the factors behind high ratios.
    Keywords: Housing, Price-to-income ratio, Price-to-rent ratio, Fractional integration, Persistence, Long memory
    JEL: C22 R31
    Date: 2013–05

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