nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒12‒29
thirty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Effect of (Mostly Unskilled) Immigration on the Innovation of Italian Regions By Massimiliano Bratti; Chiara Conti
  2. Regional Transitions from Socialism to Entrepreneurship: Russia and Germany compared By Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
  3. Training and wages of older workers in Europe By Michele Belloni; Claudia Villosio
  4. The Shaping of Skills:Wages, Education, Innovation By Valeria Cirillo; Mario Pianta; Leopoldo Nascia
  5. Benchmark Value Added Chains and Regional Clusters in German R&D Intensive Industries By Reinhold Kosfeld; Mirko Titze
  6. The effects of targeted labour market programs for job seekers with occupational disabilities By Angelov, Nikolay; Eliason, Marcus
  7. Tradable Refugee-Admission Quotas and EU Asylum Policy By Fernández-Huertas Moraga, Jesús; Rapoport, Hillel
  8. Job satisfaction and flexicurity over the business cycle: evidence from Swiss individual-level data By Moreno Baruffini; Federica Origo
  9. Location of research-based spin-offs: how relevant are regional effects? By Oscarina Conceição; Ana Paula Faria; Margarida Fontes
  10. Demography and unemployment in East Germany : how close are the ties? By Fuchs, Michaela; Weyh, Antje
  11. Effects of geographical accessibility on the use of outpatient care services: quasi-experimental evidence from administrative panel data By Elek, P.;; Varadi, B.;; Varga, M.;
  12. The Development of Gas Hubs in Europe By Caterina Miriello; Michele Polo
  13. Determinants of Commuter Trends and Implications for Indirect Rebound Effects: A Case Study of Germany’s Largest Federal State of NRW, 1994–2013 By Galvin, Raymond; Madlener, Reinhard
  14. Importers, Exporters and Multinationals: Exploring the Hierarchy of International Linkages By Gullstrand, Joakim; Olofsdotter, Karin; Thede, Susanna
  15. Agglomeration economies and global activities: impact on firm survival By Anna Maria Ferragina; Fernanda Mazzotta
  16. The Economic Impact of Professional Services Liberalisation By Erik Canton; Daria Ciriaci; Irune Solera
  17. Recessions, recoveries and regional resilience: Evidence on Italy By Di Caro, Paolo
  18. What is the market potential of electric vehicles as commercial passenger cars? A case study from Germany By Gnann, Till; Plötz, Patrick; Funke, Simon; Wietschel, Martin
  19. Symmetric and asymmetric effects of proximities. The case of M&A deals in Italy By Emanuela Marrocu; Ron Boschma; Raffaele Paci
  20. Smart Specialisation in the EU: Is it a Bridge between Innovation and Cohesion? By Argentino Pessoa
  21. Firm size distribution in Italy and employment protection By Luca Amendola
  22. The persistent heterogeneity of trade patterns: A comparison of four European Automotive Global Production Networks By Frigant, Vincent; Zumpe, Martin
  23. Maternity leave and mothers' long-term sickness absence: Evidence from Germany By Guertzgen, Nicole; Hank, Karsten
  24. Costs of power supply flexibility: the indirect impact of a Spanish policy change By Ronald Huisman; Elisa Trujillo-Baute
  26. The Geography of Average Income and Inequality: Spatial Evidence from Austria By Mathias Moser; Matthias Schnetzer
  27. Fixed-Term Employment and Fertility: Evidence from German Micro Data By Auer, Wolfgang; Danzer, Natalia
  28. Homeownership of immigrants in France By Laurent Gobillon; Matthieu Solignac
  29. Constructing a Novel Competitiveness Index for European Regions By Marko Danon
  30. Unbalanced Regional Impact of the crisis in Spain. An explorative analysis through structural changes, sectorial specialization and productivity By Juan R. Cuadrado-Roura; Andres Maroto-Sanchez

  1. By: Massimiliano Bratti; Chiara Conti
    Abstract: Immigration has recently been at the centre of the political and economic agenda. Economists have studied extensively the impact of immigration on several economic and social indicators of host countries. The effect of immigration on innovation and technical change is, however, not much studied. The existing work on the effect of immigrants on innovation is generally limited to the role played by highly educated immigrants, generally immigrants with at least tertiary education, and is mostly focused on the US. Yet, although in anglosaxon countries skilled immigration is a sizeable phenomenon -- according to the Docquier and Marfouk (2006) data the percentages of tertiary educated immigrants were in 2001 40.3% for Australia, 58.8% for Canada, 34.9% for the UK, ad 42.7% for the US -- this is much less the case in European countries, for which just the minority of immigrants are skilled. Just to take a few figures, according to the same source, the percentages of tertiary-educated immigrants were 16.4% for France, 21.8% for Germany, 15.4% for Italy and 18.5% for Spain. Now, although the existing literature has emphasized why there are good reasons to expect positive effects of skilled immigrants on the innovation of the receiving countries, it has much less to say about the general effect of immigrants, or of low-educated immigrants. In this paper, we make an attempt to partly fill the gap concerning the effects of overall immigration on innovation, and in particular of low-skilled immigrants, existing in the literature. In addition to providing evidence for a country which was exposed to a very fast and large wave of immigration during the 2000s -- Italy --, and for which evidence is scant, we also use a very small geographical scale of analysis -- Italian provinces corresponding to NUTS-3 regions --, which presumably enables us to better control for differences in institutional and socio-economic factors which are difficult to observe but which may simultaneously contribute to both attracting new immigrants and to increasing the innovation potential of a region. More importantly, unlike most papers in the literature which only investigated the effect of skilled immigration, (i) we first focus on the general impact of immigration on innovation, and then (ii) separately look at the effects of low-educated and high-educated immigrants on innovation. Last but not least, we tackle potential endogeneity issues by using a well established instrumental variables (IVs, hereafter) strategy based on immigrants' enclaves.
    Keywords: Immigration;Innovation; Patent applications;Regions; Italy
    JEL: J2
    Date: 2014–11
  2. By: Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
    Abstract: We investigate the personal- and regional-level determinants of entrepreneurial activities in East Germany and Russia in the process of transition to a market-type economy. In this comparison entrepreneurship in West Germany is used as a benchmark. Whereas East Germany has experienced?after 40 years of socialism?a shock-like-transformation towards a market economy, Russia was under socialistic regime for a period of about 70 years, and its economic development after the breakdown of the Soviet Union diverged from the development in East Germany. Hence, one can expect substantial differences in the level of entrepreneurship and determinants of the decision to be self-employed in these two countries and their regions. While a number of studies indicate that East Germany has now largely overcome its socialistic legacy with regard to entrepreneurial activities (Fritsch et al., 2013,2014),the developments in Russia are still largely unclear. There are some cross-country comparisons of the overall level of entrepreneurial activity that include Russia (Djankov,et al.,2005, 2006; Ageev,et al.,1995; Aidis,et al.,2008). There is, however,hardly evidence on the dynamics of entrepreneurship in detail and with comparison to other post-socialist countries. We conduct micro-data panel analyses for Germany and Russia that cover the time period from shortly after German reunification until recently. The analysis for Germany is based on the Socio-Economic Panel(SOEP), a national representative survey of German households containing detailed information about people's socio-economic and psychological characteristics. Data for Russia comes from the Russia Longitudinal Monitoring Survey(RLMS) which is comparable to Germany's SOEP. For detailed regional analysis in Russia, we additionally use the Overall Monitoring of Living Conditions(OMLC) data set. We find several differences with regard to entrepreneurial activities between East- and West Germany and Russia. While the level of entrepreneurship in East Germany has achieved the West German level of about 12 percent 15 years after the German reunification, the self-employment rate in Russia is still very low at about 4 percent. In all countries under inspection there is substantial variation of the level of self-employment across regions. With regard to the individual-level determinants of self-employment,we observe several differences between Germany and Russia. While age does not seem to play a significant role for the probability of being an entrepreneur in Russia,this relationship has a statistically significant reversed u-shape in Germany. Moreover, entrepreneurs in Germany are more likely to be low- and high-educated,in comparison to employees,whereas in Russia we observe a positive and linear relationship between formal education and the probability of entrepreneurship. Furthermore, Russian entrepreneurs tend to work in occupations that do not correspond with their field of education, thus, indicating necessity-driven nature of entrepreneurship in Russia. Nonetheless, Russian and German entrepreneurs are similar in that they are more likely to be married and men.
    Keywords: entrepreneurship; new business formation; transformation; regional development; East Germany; Russia
    JEL: L26 O11
    Date: 2014–11
  3. By: Michele Belloni; Claudia Villosio
    Abstract: The financial deficits of many social security systems caused by ageing populations and stagnating economies are forcing workers to retire later from the labour market. An extended working life combined with rapid technological progress in many sectors, is likely making older workers’ skills obtained in school obsolete. In this context, lifelong investment in training is widely recognized among the international research and policy community as a key element to increase or at least limit the decline in productivity of older workers. This paper investigates the relationship between training undertaken by European older workers and their wages, relying on the Survey of Health, Ageing and Retirement in Europe. Undertaking training activities is associated with 6.3% higher wages. This premium is sizeable and is similar to that of attaining an upper or post-secondary degree instead of a primary or lower-secondary degree. Training wage premiums are highly heterogeneous across countries: they are highest in Austria, Germany, Greece, and Italy and are about half that in France and Spain. No premium is found for Denmark, Sweden, Belgium, the Netherlands, and Switzerland. Training premiums of the first group of countries can be overestimated due to training endogeneity and sample selection bias.
    Keywords: Older workers, Training, Wages, Cognitive abilities, Sample selection bias, Attrition
    JEL: J14 J24 J31
    Date: 2014
  4. By: Valeria Cirillo (Department of Statistical Sciences, Sapienza University of Rome); Mario Pianta (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Leopoldo Nascia (Istituto Nazionale di Statistica)
    Abstract: This paper investigates the role of wages, education and innovation in shaping employment structures in manufacturing and services of five European countries (Germany, France, Spain, Italy and United Kingdom), with specific respect to skills in the long term (1999-2011). Using data on employment by skill level and several measures of industries’ technological efforts provided by four waves of Community Innovation Survey, we study the relationship between micro and macro factors and employment dynamics by skill. As micro factors, we consider the role of education and wages by employee; as macro elements we study the role of technologies and demand shaping job growth by skill group. Relying on a sectoral demand curve deriving from a translong cost function, we empirically estimate the relationship between wages, education, technologies, demand and employment. The results reveal that skills are differently affected by education, wages and technologies and a variety of employment patterns has to be detected. In 1999-2011, manufacturing shows a pattern of relative skill upgrading; conversely a smoothed polarizing trend is detected in services. While a process of relative skill upgrading is detected in manufacturing; conversely a smoothed polarizing trend is detected in services.
    Keywords: Innovation; Labor markets, Wages, Education.
    JEL: J31 O30
    Date: 2014
  5. By: Reinhold Kosfeld; Mirko Titze
    Abstract: Strong regional clusters are increasingly seen as a response to economic globalization by policy makers and regional development agencies. The reasoning of competitive advantages of countries and regions with enterprises organized in clusters has mainly been popularized by Porter (1990, 1998, 2000). As well-working clusters are associated with high productivity growth and innovation potential, the cluster approach has become appealing in different fields of economic policy. In particular cluster-based instruments are in integral part of EU regional policy (Christensen et al., 2011). In most EU countries cluster-oriented policy plays an important role at the national and regional level (Oxford Research, 2008). This also holds for Germany where diverse national and regional programmes were set up to promote cluster development (Török, 2012). Although the cluster approach is based on the agglomeration theory, a variety of definitions of a cluster exists (Martin/Sunley, 2003). The present paper aims at improving the strategy of regional cluster identification. First, at the national level, the dominant related sectors of R&D intensive industries are basically discovered by qualitative input-output analysis (QIOA). Yet it has to be allowed for the fact that usually not all enterprises of these sectors belong to the respective value added chains. Thus, QIOA has to be supplemented by quantitative input-output analysis in order to avoid distortion effects that arise from defining too heterogeneous clusters. Here downstream and upstream sectors are considered according to their involvement in the production activities of the key industry. Secondly, at the local level, it has to be settled whether and how spatial externalities and spillovers should be allowed for in locating regional clusters. Most applied cluster studies ignore the presence of spatial interaction between interrelated geographical units. If geographical units are considered to be spatially independent in the presence of spillover, however, spatial clustering tends to be underestimated (Guillain/Le Gallo, 2007). Feser/Koo/Renski/Sweeney (2001) and Feser/Sweeney (2002) were the first to explicitly accounting for spatial interaction between regions in an applied cluster study for the US state of Kentucky. In a follow-up study, Feser/Sweeney/Renski (2005) extended spatial analysis to the United States as a whole. Both studies make use of the Getis-Ord statistic to measure and test for local spatial clustering (Ord/Getis, 1995). Recently, Pires et al. (2013) utilize the local Moran test for localizing industrial clusters in Brazil. A major drawbacks of both local methods is the necessity of fixing the environments of the regions in advance. reach of the geographical extent of potential spillover effects in advance. To allow for varying reaches of the geographical extent of regional interaction, here the flexible approach of spatial scanning is adopted (Kulldorff, 1997). On the basis of Kulldorff's scan test, the variable extent of potential regional clusters is accurately captured.
    Keywords: National cluster templates; regional clusters; Qualitative Input-Output Analysis (QIOA); spatial scanning
    JEL: R12 R15
    Date: 2014–11
  6. By: Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Eliason, Marcus (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: In this study, we estimate the effects of three targeted labour market programmes (LMPs) on the labour market outcomes of occupationally disabled job seekers. Using propensity score matching, we estimate the average treatment effect on the treated of wage subsi-dies, sheltered public employment, and employment at Samhall, a Swedish state-owned company whose aim is to provide employment for persons with disabilites. The control group consists of individuals who are eligible for the targeted LMPs, but have not (yet) received treatment. Using a rich panel data set, containing demographics as well as health and sickness absence measures, we are able to estimate short- to medium-term effects. Our results show large positive effects of all LMPs on labour income, disposable income and employment, and the effects are relatively persistent. However, consistant with the previous empirical literature, we find considerable locking-in effects, measured by a de-crease in un-subsidized employment. Furthermore, the yearly amounts of disability insur-ance paid decrease as a result of program participation, and the decrease becomes more pronounced with time since treatment start. Finally, the effects on disability insurance prevalence are heterogenous, both with respect to the different LMPs and gender.
    Keywords: Occupational disability; wage subsidies; locking-in effects; treatment effects
    JEL: C21 J14 J23
    Date: 2014–11–29
  7. By: Fernández-Huertas Moraga, Jesús (Universidad Autónoma de Madrid); Rapoport, Hillel (Paris School of Economics)
    Abstract: The current EU Asylum policy is widely seen as ineffective and unfair. We propose an EU-wide market for tradable quotas on both refugees and asylum-seekers coupled with a matching mechanism linking countries' and migrants' preferences. We show that the proposed system can go a long way towards addressing the shortcomings of the current system. We illustrate this claim using the recent problems regarding relocation faced by the European Relocation from Malta (EUREMA) program.
    Keywords: asylum seekers, refugee resettlement, tradable quotas, EU policy, immigration policy, international public goods
    JEL: F22 F5 H87 I3 K33
    Date: 2014–11
  8. By: Moreno Baruffini; Federica Origo
    Abstract: The effects on employment of the recent economic crisis have become evident and persistent in many OECD countries, exacerbating on the one hand the demand for more flexibility by the firms; on the other the need to ensure workers security. 'Flexicurity', an institutional frame implementing a progressive flexibility of the labor market and at the same time guaranteeing its stability, has been defined as a successful model at the EU level before the crisis. The objective of this paper is therefore to empirically assess the effect of a micro-level measure of flexicurity on workers' job satisfaction using individual-level data from the longitudinal Swiss Household Panel (SHP), related to temporary and permanent employees in Switzerland for the period 2005 to 2011. Switzerland provides a particularly appropriate market to examine the potential effects of flexicurity type arrangements due to the relatively high incidence of flexible employment contracts. To this end, the sample of workers is disaggregated into different groups according to their employment contract and their perceived job security; we therefore analyse whether workers who are heterogeneous in terms of both the type of labour contract and their perceived security do also differ with regard to life satisfaction and specific aspects of the job satisfaction. Usually satisfaction variables, given the ordinal nature of the dependent variable, are analysed using ordered probit models. Van Praag and Ferrer-i-Carbonell (2006), however, developed a procedure, called Probit (OLS) or POLS, that consists in transforming an ordinal dependent variable in a "pseudo" continuous one, and allows the application of a linear model. With longitudinal data the POLS method permits for the inclusion of individual level fixed effects. Our methodology at first estimates a linear fixed effects model, thus controlling for unobserved time-invariant characteristics, while in a second step we implement a two-stage model to control for endogeneity. We also extend our analysis and seek to identify how insecurity affects temporary workers compared to permanent workers examining the impact of regional labour market conditions: we examine the effects on relative satisfaction and perceptions of security on workers in the seven Swiss statistical regions. First results show that job stability and perceived security are not necessary associated, and that job satisfaction is relatively low, mainly when perceived job security is low. The relationship between wellbeing and job security also varies according to regional employment conditions. This indicates that the duration of the contract may be less important if the worker perceives that he is not at risk of unemployment; in this regard, from a policy point of view, a greater 'flexicurity' can be obtained either directly from employer, adopting changes in work organization, or indirectly by policy makers through an appropriate mix of active labour market policies.
    Keywords: job satisfaction; Flexicurity; unobserved heterogeneity
    JEL: J28 J81
    Date: 2014–11
  9. By: Oscarina Conceição (DINÂMIA-CET, University Institute of Lisbon, Lisbon, Portugal & Polytechnic Institute of Cavado and Ave); Ana Paula Faria (Universidade do Minho - NIPE); Margarida Fontes (LNEG – National Laboratory of Energy and Geology. Lisbon, Portugal & DINÂMIA-CET, University Institute of Lisbon, Lisbon, Portugal)
    Abstract: Using a unique self-collected dataset that comprehends the population of research-based spin-offs created in Portugal from 1995 until to 2007, we investigate the location choices of these firms. In order to do so we control for both university- and region-related mechanisms. Our results suggest that the latter play a lesser role than university-related mechanisms. Although the availability of qualified human capital and urbanization economies seem to exert some effect on the location choices of research-based spin-offs, our results suggest that the quality and prestige of the universities located in a region, as well as the presence of university-affiliated incubators and/or university research parks have a stronger impact on the intensity of RBSO location across regions.
    Keywords: academic spin-offs; firm creation; location decision; count data analysis
    Date: 2014
  10. By: Fuchs, Michaela (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "We analyze the relation between population aging and the decline of unemployment in East Germany for the years from 1996 to 2012. To this we scrutinize both a direct and an indirect effect of aging on unemployment. The direct effect includes a decomposition of the East German unemployment rate into three components considering changes in the workforce's age structure, labor market participation, and age-specific unemployment rates. Results show that changes in the age structure of the workforce counteracted unemployment decline since 2005. Spatial panel regressions on the small-scale regional level, however, point towards an indirect effect of aging on unemployment that works through the increasing competition for labor. Overall results show that the declining unemployment rate in East Germany is indeed affected by aging as evidenced by a declining youth share and an increasing old-age share. This indicates that a reversed cohort crowding effect has taken place." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bevölkerungsentwicklung, demografischer Wandel - Auswirkungen, Arbeitslosigkeitsentwicklung, Beschäftigungseffekte, Erwerbsbevölkerung, Altersstruktur, Arbeitslosenquote, Ostdeutschland
    JEL: C33 J11 J64 O18
    Date: 2014–11–27
  11. By: Elek, P.;; Varadi, B.;; Varga, M.;
    Abstract: Between 2008 and 2012 new outpatient service locations were established in Hungarian micro-regions, which had lacked outpatient capacities before. We exploit this quasiexperiment to estimate the effect of geographical accessibility on outpatient case numbers using both semi-aggregate and individual-level panel data from administrative sources. Based on propensity score matching methods, fixed-effect linear models and fixed-effect Poisson regression techniques, we find a substantial, 24-28 per cent increase of case numbers as a result of the establishments. Our causal estimates imply that a one-minute reduction of travel time to the nearest outpatient care provider increases case numbers e.g. by 0.8 per cent in internal medicine and 2.8 per cent in rheumatology. We also find that the size of the new outpatient capacities has a separate positive effect on case numbers, possibly caused by supplier-induced demand. By combining a fixed effect logit model and a fixed effect truncated Poisson model, we decompose the effects into increases in the probability of ever visiting a doctor on the one hand and an increase of the frequency of visits on the other. We find that new visits were the main source of the increase in internal care, surgery and gynaecology, whereas both margins wereimportant in rheumatology. Finally, as a methodological note, we examine the robustness of the fixed effect truncated Poisson estimator to some forms of misspecification by simulation methods.
    Keywords: fixed-effect Poisson regression; fixed-effect truncated Poisson regression;health econometrics; number of doctor visits; propensity score matching; small area variation;
    JEL: I11 I18 C23 C25
    Date: 2014–08
  12. By: Caterina Miriello; Michele Polo
    Abstract: This paper investigates the development of wholesale markets for natural gas at the different stages of market liberalization. We identify three steps in the process: wholesale trade initially develops to cope with balancing needs when the shippers and suppliers segments become more fragmented; once the market becomes more liquid, it turns out to be a second source of gas procurement in alternative to long term contracts; finally, to manage price risk financial instruments are traded. We review in detail the different regulatory measures that must be introduced to create an efficient and functioning wholesale gas market. Finally, we analyze the evolution of gas hubs in the UK, the Netherlands, Germany and Italy in terms of market rules and market liquidity. We argue that each of these country cases can be easily located into the evolutionary path we have highlighted at the beginning, with the UK and the Netherlands leading the process, Germany and Italy constrained by limited supply; Italy is also showing an interesting counterfactual.
    Keywords: natural gas markets, gas balancing, market liquidity.
    JEL: Q48 L95
    Date: 2014
  13. By: Galvin, Raymond (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Home-work commuting distances are increasing in Europe. Many studies see this as due to geographical mismatches between workplaces and homes, or worker skills and job locations, and often recommend policies to close geographical gaps between jobs and suitable workers. A different approach sees commuting as essential in a modern economy, as it facilitates information flow across complex economic networks in geographically dispersed regions. In this ‘city-network’ view, many workers make deliberate choices to commute and many employers encourage this. This paper explores these viewpoints in a case study of increasing commuting in Germany’s most populous state, North-Rhine-Westphalia, in 1994-2013, using Federal data on workers’ home and work locations. It finds an average annual increase in commuter numbers of 1.35%, from 43% to 55% of the workforce. Some of this increase can be explained by worker skills and job location mismatches, but steady increases in various commuting metrics lead to the suggestion that commuting is also something people choose to do. This supports the city-network hypothesis, and also implies a rebound effect of increased travel due to increased economy-wide energy efficiency. Qualitative and quantitative studies are needed to identify the actual reasons people commute, and to more accurately estimate rebound effects.
    Keywords: Commuting; city networks; rebound effect
    Date: 2014–09
  14. By: Gullstrand, Joakim (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University); Thede, Susanna (Institute for European Studies, University of Malta)
    Abstract: The purpose of this paper is to empirically explore two dimensions of the firm hierarchy of international market-specific linkages using data for Swedish manufacturing firms over the 1997 to 2007 period. First, we investigate the productivity ordering with respect to importing, exporting and investing abroad. Second, we investigate the productivity ordering with respect to linkage complexity (i.e. the number of linkages at firm level). Our findings support a general productivity hierarchy from importing to exporting and then investing abroad as well as from low- to high-linkage complexity. However, an industry-by-industry examination shows that the hierarchical structure is only generally upheld for linkage complexity while the ordering of the three linkages does not exhibit the same regularity across industries. In extending the analysis, we find these irregularities to be upheld by industry characteristics. Lastly, we go beyond the productivity ordering and explore firm characteristics correlated with the linkage complexity.
    Keywords: manufacturing firms; productivity ordering; market linkages
    JEL: F14 F21 F23
    Date: 2014–12–05
  15. By: Anna Maria Ferragina; Fernanda Mazzotta
    Abstract: The focus of our contribution is to shed light on the importance of firm agglomerations and FDI as drivers of firm survival in Italy. We focus upon different types of agglomeration economies related to the geographical context checking how these economies impact differently on heterogeneous firms survival and whether effects are robust to different estimators (Probit, Cox hazard models, Probit Heckman) and to different assumptions about inter-and intra-regional spillovers. The novelty our paper with respect to previous studies is twofold. First of all, we focus both on external economies and on firm internationalization, two crucial determinants of firm productivity and competitiveness and ultimately of firm survival. Hence, we consider the intertwined role of firm global activities with respect to the local drivers of firm dynamics by comparing foreign investors in Italy and Italian firms' investing abroad to domestic firms to catch a crucial source of heterogeneity of firm behavior with respect to external economies (correcting for the endogeneity of the FDI variables and for sample selection). Secondly, we use a very large dataset at firm level which takes into account several different dimensions at firm, industry and province level (previous studies are mostly at sectoral or at province/regional level) for more than 500,000 observations concerning Italian manufacturing corporate firms disaggregated by sector and by 103 provinces over a long span of time (2002-2010) which allows to also catch the effect of the crisis. With respect to agglomeration economies the paper analyses whether and how firms' exit choices are influenced by five different agglomeration indicators related to the geographical context: 1) External economies arising from localization economies due to the spatial concentration of firms in the same industry (GLAESER et al., 1992) and to 2) local production systems (Industrial districts); 3) External economies available to all local firms irrespective of sector and arising from urban size and density (urbanization economies); 4) External economies available to all local firms stemming from specialisation of firms in different varieties which may favour intra- and inter industry knowledge spillovers via Jacobs externalities (JACOBS, 1969); 5) diversification due to unrelated variety to capture the portfolio effect arising from the spatial concentration of firms belonging to different and non-complementary industries which may protect the region from sector-specific shocks (FRENKEN et al., 2007). We check whether the relevance of these agglomeration economies differ substantially between Italian firms and firm which invest in active or passive FDI. We get evidence on three issues: 1) Benefits from geographically and industry bounded specialisation for survival; 2) Industrial districts economies impact on firm survival 3) Diversification economies relevance.
    JEL: C41 F21 F23 L25
    Date: 2014–11
  16. By: Erik Canton; Daria Ciriaci; Irune Solera
    Abstract: Competition in professional services is, in some occasions, hindered by excessive regulation. This may constrain business dynamics (entry and exit of firms) and create inefficiencies and excessive rents. To improve market performance in those professional services generally regulated, several EU countries have reduced regulatory restrictions regarding the entry into and exercise of these professions. This study is an attempt to evaluate the effects of regulatory barriers in four of them, i.e. legal, accounting, architectural and engineering activities in the EU over the period 2008-2011. It is found that less strict regulation improves their allocative efficiency and reduces the observed larger-than-average profitability, through intensified business dynamics.
    JEL: D21 D22
    Date: 2014–09
  17. By: Di Caro, Paolo
    Abstract: This paper analyses regional resilience and local economic growth patterns in Italy over the past four decades. Place-specific transient and permanent effects of aggregate employment shocks are studied. Geographical asymmetries in engineering and ecological resilience are found, providing auxiliary insights on the rooted Italian regional inequalities. The territorial impact of different crises is investigated and a direct comparison with the UK case is offered. The importance of manufacturing activities for explaining economic resilience is assessed, finding out a positive relation between the resilience of the industrial sector and the overall local economic development. Some policy implications are conclusively discussed.
    Keywords: recessions, recoveries, regional resilience, local economic growth
    JEL: E32 R1
    Date: 2014
  18. By: Gnann, Till; Plötz, Patrick; Funke, Simon; Wietschel, Martin
    Abstract: Commercial passenger cars are often discussed as an early market segment for plug-in electric vehicles (EVs). Compared to private vehicles, the commercial vehicle segment is characterized by higher vehicle kilometers travelled and a higher share of vehicle sales in Germany. Studies which consider commercial passenger EVs less important than private ones often use driving data with an observation period of only one day. Here, we calculate the market potential of EVs for the German commercial passenger car sector by determining the technical and economic potential in 2020 for multiday driving profiles to be operated as EV.We find that commercial vehicles are better suited for EVs than private ones because of the regularity of their driving. About 87% of analysed vehicles could technically be operated as battery electric vehicles (BEVs) while plug-in hybrid electric vehicles (PHEVs) could obtain an electric driving share of 60% on average. In moderate energy price scenarios EVs can reach a market share of 4% in the German commercial passenger car market by 2020 while especially the large commercial branches are important. However, our analysis shows a high sensitivity of results to energy and battery prices as well as electric consumptions.
    Date: 2014
  19. By: Emanuela Marrocu; Ron Boschma; Raffaele Paci
    Abstract: It is widely recognized that most economic activities show a tendency to agglomerate in space and, therefore, economic interactions among firms are likely to be influenced by their geographical proximity. Recently, the literature (Boschma, 2005) has remarked that other dimensions of proximity among economic agents, in addition to the spatial one, can play a relevant role in shaping their relationships. Thus, a growing number of contributions are investigating how proximities among agents - in terms of cognitive and technological bases, cultural and institutional similarity and organizational background - affect their exchanges. In this study we focus on a specific form of firms' inter-relationship - Mergers and Acquisitions (M&A) - which represents one of the most effective tools used by firms to achieve their strategic goals (increasing market shares, entering new markets, acquiring new competencies). M&A deals represent an interesting set-up to assess the decisive role of proximities. The acquisition of a potential target involves a prolonged and costly search process, often conditioned by the limited amount of managerial resources available to the acquiring firm because of physical, cognitive and monetary constraints. Thus, on average, only the small proportion of the most proximate and similar targets ? in terms of geographical location, technological relatedness and organizational factors ? are evaluated by the acquirer in the search process. In this paper we investigates the effect of geographical, industrial, organizational and institutional proximity on the probability that any two firms located in Italy engage in a M&A deal. Within a logistic rare event framework, we investigate 4,261 actual deals completed over the period 2000-2011 and around 3.8 million potential deals. We find robust evidence that all forms of proximity have a positive effect, especially industrial relatedness. Moreover, we find evidence that proximities generate asymmetric effects on M&A deals, depending on the location of bidders and targets and on whether some specific individual characteristics are featured by the acquirer or by the target firm. More specifically, we find that the probably decreases when the acquirer is located in the North of Italy and the target in the South, while the opposite case does not affect the estimated baseline probability; this is reasonably due to the much lower level of social capital featured by Southern Italian regions with respect to the Northern ones, which increases uncertainty and transactions costs, making more difficult the search process for Northern acquirers targeting Southern firms. An additional positive (negative) effect is associated to the acquirer (target) belonging to the financial sector and the target (acquirer) to the manufacturing one; finally, an additional effect is found when the target is listed and the acquirer is a private firm, whereas the reverse status pattern does not yield a significant effect.
    Keywords: M&A; geographical proximity; industrial relatedness; rare events models; asymmetry;
    JEL: G34 R12 C21
    Date: 2014–11
  20. By: Argentino Pessoa
    Abstract: Current innovation policy is the result of decades of research about the nature and role of innovation in economic growth. Such investigation has contributed to redesign our knowledge not only on the role played by innovation in economic development but also about the relationship between innovation and territory. Although the huge literature examining the relationships between territory and innovation has shown abundant evidence that certain regions are systematically more innovative than others the reasons for this dissimilarity go on being controversial. But, whatever the reason, the propensity for generation or absorption of innovation differs clearly between regions with some regions being characterised more by innovation-using rather than innovation-producing activities and others by a complete absence of innovation. Resulting from the criticisms to former policy approaches and from theoretical and empirical developments, the concept of ?smart specialisation' appeared and has gained significant political prominence in the European Union (European Commission, 2010; McCann and Ortega-Argilés, 2011). Although regions in many parts of the world are showing interest in the smart specialisation policy approach (OECD, 2012), it is Europe that takes the lead in this type of strategy, feeding high expectations about the results of this approach. In fact, European Commission sees smart specialisation as ?the basis for European Structural and Investment Fund interventions in research and innovation considered as part of the future Regional Policy's contribution to the Europe 2020 jobs and growth agenda'. Furthermore, the EC goes beyond the innovation policy domain and describes smart specialisation as involving ?a process of developing a vision, identifying competitive advantage, setting strategic priorities and making use of smart policies to maximise the knowledge-based development potential of any region, strong or weak, high-tech or low-tech'(S3 Platform website). This paper looks at the capacity of the smart specialization approach to attain the aims that it alleges to pursue, namely the aptitude to simultaneously respond to cohesion and innovation, questioning if smart specialization is able to bridge efficiency and equity which inspire innovation and cohesion, respectively.
    Keywords: Cohesion policy; European Union; Innovation; smart specialisation.
    JEL: O31 O33 R11 R58
    Date: 2014–11
  21. By: Luca Amendola (ITP, University of Heidelberg)
    Abstract: The number of Italian firms in function of the number of workers is well approximated by an inverse power law up to 15 workers but shows a clear downward deflection beyond this point, both when using old pre-1999 data and when using recent (2014) data. This phenomenon could be associated with employent protection legislation which applies to companies with more than 15 workers (the Statuto dei Lavoratori). The deflection disappears for agriculture firms, for which the protection legislation applies already above 5 workers. In this note it is estimated that a correction of this deflection could bring an increase from 3.9 to 5.8% in new jobs in firms with a workforce between 5 to 25 workers.
    Date: 2014–12
  22. By: Frigant, Vincent; Zumpe, Martin
    Abstract: In this paper, we examine the structure and the evolution of international exchanges of auto parts over the 2000-2012 period for four European countries. The first part of our study reviews the literature and points out four stylized facts about the geography of automotive supply networks. In section 2 we propose an analysis of the organisation of automotive supply chains based on the global production networks framework. We give details about this approach by stating the nature of trade flows that occur in these networks, and by highlighting the importance of intra-firms flows. In the third part, we compare the structure of external GPNs of German, Spanish, British and French automotive firms located in these countries. On the basis of Chelem data about auto parts exchanges, we examine in a comparative way the evolution of intra-continental and intercontinental flows. Our results highlight the heterogeneity of situations and of trajectories in the different countries.
    Keywords: Global Production Networks; Automotive industry; International Comparison; Auto-parts industry; Regional integration; Globalisation
    JEL: F14 F15 F23 L62 R11
    Date: 2014–11–25
  23. By: Guertzgen, Nicole; Hank, Karsten
    Abstract: Exploiting unique German administrative data, we estimate the association between an expansion in maternity leave duration from two to six months in 1979 and mothers' post-birth long-term sickness absence over a period of three decades after childbirth. Using a regression discontinuity design, we first show that the leave extension caused mothers to significantly delay their return to work within the first year after childbirth. We then compare the number and length of spells of long-term sickness absence of returned mothers who gave birth before and after the change in leave legislation. Our findings suggest that among those returned, mothers subject to the leave extension exhibit a higher incidence of long-term sickness absence as compared to control mothers. This also holds true after controlling for observable differences in pre-birth illness histories. At the same time, there are no pronounced effects on mothers' medium-run labor market attachment following the short-run delay in return to work, which might rationalize a negative causal health effect. Breaking down the results by mothers' pre-birth health status suggests that the higher incidence of long-term sickness absence among the treated may be explained by the fact that the reform has facilitated re-entry of a negative health selection into the labor market.
    Keywords: maternity leave policies,health,administrative data,regression discontinuity design
    JEL: J10 J16 J18
    Date: 2014
  24. By: Ronald Huisman (Erasmus School of Economics & IEB); Elisa Trujillo-Baute (Universitat de Barcelona & IEB)
    Abstract: The increase in the share of supply from intermittent power sources changes the demand for power from traditional power plants. The power system demands more volume flexibility from traditional plants. Our goal is to better understand the impact of a reduction of flexibility in power supply on the costs of volume adjustments. We define flexibility as the capacity with which nominated power plants can adjust their output to unexpected changed in residual demand. We exploit a policy change in Spain that affected the power market. The policy, implemented in 2010, aims to provide a stimulus for producing power with domestic coal. The policy, in combination with a year with scant rainfall in the year after the policy was implemented, decreased the amount of flexibility in power supply and we use this to examine the effect of a change in flexibility on the costs of the power system. We find that a decrease in flexibility resulted in an increase in the costs of adjustments as those flexible plants driven out of the spot market by the coal fired plants compensated themselves by charging higher prices in the adjustment market. Policies as the one evaluated in this paper oriented to stimulate generation from less flexible and more pollutant conventional plants should therefore in any case be abandoned. In contrast to the Spanish coal policy, more flexible power plants should remain online and be prioritised against less flexible power plants.
    Keywords: Sustainable energy policy, power supply flexibility, imbalance costs
    JEL: Q48 L11 L52 G14
    Date: 2014
  25. By: Bart Cockx; Corinna Ghirelli (-)
    Abstract: We study the impact of graduating in a recession in Flanders (Belgium), i.e. in a rigid labor market. In the presence of a high minimum wage, a typical recession hardly influences the hourly wage of low educated men, but reduces working time and earnings by about 4.5% up to twelve years after graduation. For the high educated, the working time is not persistently affected, but the penalty on the hourly wage (and earnings) increases with experience, and attains roughly -6% ten years after labor market entry. We also contribute to the literature on inference with few clusters.
    Keywords: scars, graduating, labor market rigidity, recession, few clusters, cluster robust
    JEL: C12 C41 E32 I21 J22 J23 J31 J6
    Date: 2014–11
  26. By: Mathias Moser (Department of Economics, Vienna University of Economics and Business); Matthias Schnetzer (Austrian Chamber of Labour Vienna)
    Abstract: This paper investigates the nexus between regional income levels and inequality. We present a novel small-scale inequality database for Austrian municipalities to address this question. Our dataset combines individual tax data of Austrian wage tax payer on regionally disaggregated scale with census and geographical information. This setting allows us to investigate regional spillover effects of average income and various measures of income inequality. Using this data set we find distinct regional clusters of both high average wages and high earnings inequality in Austria. Furthermore we use spatial econometric regressions to quantify the effects between income levels and a number of inequality measures such as the Gini and 90/10 quantile ratios.
    Keywords: Regional inequality, spatial dependence, spatial autoregressive model
    JEL: C21 D31 J31
    Date: 2014–11
  27. By: Auer, Wolfgang (Ifo Institute for Economic Research); Danzer, Natalia (Ifo Institute for Economic Research)
    Abstract: We study the short- to medium-run effects of starting a career on a fixed-term contract on subsequent fertility outcomes. We focus on the career start since we expect that temporary contracts and their inherent economic uncertainty imply a path dependency which might have spill-over effects on other domains of life. Our empirical analysis is based on rich data from the German Socio-Economic Panel which provides comprehensive information about individuals' labour market history as well as fertility behaviour. Our main results are: Women (i) tend to postpone their first birth due to fixed-term employment at labour market entry and (ii) reduce the number of children in the first 10 years after graduation. These associations are strongest in the subsample of native women with at least vocational training. (iii) In contrast, we find no significant correlations for men. We argue that these findings are robust to potential endogeneity threats.
    Keywords: career start, fixed-term employment, postponement of maternity, fertility, economic uncertainty, graduation
    JEL: J13 J18 J41
    Date: 2014–11
  28. By: Laurent Gobillon; Matthieu Solignac
    Abstract: We investigate the difference in homeownership rate between natives and immigrants as well as its evolution in France using a large longitudinal dataset over the 1975-1999 period. For people staying on the territory the whole time (ie. stayers), we show that returns of characteristics change in favor of immigrants consistently with better integration and this is particularly true for South Europeans. Moreover, for immigrants, entries on the territory have a large negative effect on the evolution of the homeownership rate. Although entrants have a better education than stayers, they are younger and thus at an earlier stage of the wealth accumulation process. They also locate in large cities where the homeownership rate is lower, and the returns of their characteristics are lower than the ones of stayers. Finally, exiters have a positive effect on the evolution of homeownership rate but this effect is only one third of the one of entrants.
    JEL: J15 R21
    Date: 2014–11
  29. By: Marko Danon (GREDEG CNRS; University of Nice Sophia Antipolis)
    Abstract: Space has only recently become a terrain of strenuous economic research. With the New Economic Geography (NEG) integrating into mainstream, many spatial subjects, including territorial, or regional, competitiveness are being increasingly inquired. In line with Krugman (2003), we argue that it is plausible to discuss competitiveness on a regional level, as a capacity of territories to attract and retain mobile factors of production, which is an increasingly important subject in an ever integrating global economy. However, this branch of economic geography is relatively underdeveloped, while it even lacks a universally accepted definition and metrics. In order to overcome this shortcoming, we propose a novel definition, along with a new index on territorial competitiveness tailored for the case of European regions at NUTS 2 level. This paper is structured as follows. In the first part, we provide a short discussion on theoretical background of the study on regional competitiveness and present in brief the key notions used in the literature. It is in that part where we propose and interpret our definition of regional competitiveness. Next, we discuss on ways of quantifying regional competitiveness and on some of the key attempts taken so far. In the third part, we present our index for European regions, by describing the territorial, temporal and methodological choices, theoretical justifications, as well results and their interpretation in the light of the NEG. The fourth part concludes and the fifth contains annexes.
    Keywords: Regional Competitiveness, Composite Index, New Economic Geography, Agglomerations, Clustering
    JEL: R11 R12
    Date: 2014–12
  30. By: Juan R. Cuadrado-Roura; Andres Maroto-Sanchez
    Abstract: The economic and financial crisis has generated a significant amount of adverse effects in all European economies, although with substantial differences by countries. For Spain the effects have been severe. From the last third of the last century until the middle of 2008 the economy experienced a period of strong expansion, with an average growth rate up of 3.2%, high job creation and a sharp increase in public and private spending. However, this masked low productivity, a growing external imbalance and, among other, high household, corporate and public indebtedness thanks to the lax financing and low interest rates. Construction, real estate, the industries particularly linked to construction and some services led the expansion and they have also led the strong fall of the economy process. The imbalances developed along the expansion process called already for some stabilization of the economy, but the sudden emergence of the international crisis caused a rapid and dramatic turn. The economy as a whole and all the Spanish regions were strongly affected -unemployment, negative growth rates, need for financial adjustment...- albeit with notable regional differences. The aim of this paper is twofold: 1) to evaluate how the crisis has affected the Spanish interregional disparities, which have worsened, and 2) to explain this divergence pattern using the regional productive specialization, the changes in productive structures and their effects in terms of within regional productivity. In doing so, the paper firstly presents a sythetic description of the features that have characterized the Spanish crisis and their most visible regional effects. Secondly, the differences that existed in regional productive structures and the changes they have gone through are analyzed, trying to find a possible explanation for the diverse regional behavior. Finally, the possibilities of future regional recovery are also explored, taking into account the dynamics of the regional productivities. To perform these analyses public statistics are used together with data from reliable sources applying various analytical and decomposition methods and techniques.
    Keywords: Economic crisis; regional disparities; economic structure.
    JEL: R2 E3 R11
    Date: 2014–11

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