nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒05‒09
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Market Value of technological innovation; evidence from European patents By Rekik, Sabrine
  2. Labor force participation of women in the EU - What role do family policies play? By Gehringer, Agnieszka; Klasen, Stephan
  3. Labour Productivity of Young and Adult Temporary Workers and Youth Unemployment: a Cross-country Analysis By Maria Laura Parisi; Enrico Marelli; Olga Demidova
  4. Which factors drive the skill-mix of migrants in the long-run? By Andreas Beerli; Ronald Indergand
  5. Evaluating the impact of a well - targeted wage subsidy using administrative data By Zsombor Cseres-Gergely; Agota Scharle; Arpad Foldessy
  6. Entry into working life: Spatial mobility and the job match quality of higher-educated graduates By Venhorst V.; Cörvers F.
  7. The additionality effects of R&D tax credits across sectors: A cross-country microeconometric analysis By Isabel Bodas Freitas; Fulvio Castellacci; Roberto Fontana; Franco Malerba; Andrea Vezzulli
  8. Is Co-Invention Expediting Technological Catch Up? A Study of Collaboration between Emerging Country Firms and EU inventors By Elisa Giuliani; Arianna Martinelli; Roberta Rabellotti
  9. Trends in the Swedish Social Investment Welfare State: ‘The Enlightened Path’ or ‘The Third Way’ for ‘the Lions’? By Joakim palme; Axel Cronert
  10. Tax attractiveness and the location of patents By Dinkel, Andreas; Schanz, Deborah
  11. Macro-economic Impact Assessment of Future Changes in European Marine Ecosystem Services By Francesco Bosello; Elisa Delpiazzo; Fabio Eboli
  12. Tax evasion and measurement error: An econometric analysis of survey data linked with tax records By Paulus, Alari
  13. The Effects of Regional R&D Subsidies on Innovative SME: Evidence from Aquitaine SMEs By BEDU Nicolas; VANDERSTOCKEN Alexis
  14. The Great Trade Collapse and the Spanish Export Miracle: Firm-level Evidence from the Crisis By Peter S. Eppinger; Nnicole Meythaler; Marc-Manuel Sindlinger; Marcel Smolka
  15. The growth effects of R&D spending in the EU: A meta-analysis By Kokko, Ari; Tingvall, Patrik Gustavsson; Videnord, Josefin
  16. The Potential of Electromobility in Austria: An Analysis Based on Hybrid Choice Models By Francisco J. Bahamonde-Birke; Tibor Hanappi
  17. Greening Up or Not? The Determinants Political Parties’ Environmental Concern: An Empirical Analysis Based on European Data (1970-2008) By Benjamin Michallet; Giuseppe Lucio Gaeta; François Facchini
  18. GDP-Employment Decoupling and the Productivity Puzzle in Germany By Klinger, Sabine; Weber, Enzo
  19. Are ethical and social banks less risky? Evidence from a new dataset By Marlene Karl
  20. Tax compliance and information provision: A field experiment with small firms By Doerrenberg, Philipp; Schmitz, Jan

  1. By: Rekik, Sabrine
    Abstract: This paper contributes to literature by giving more precise measures to technological innovation in order to estimate its economic value and assess its impact on the financial performance of companies in Europe. Focus is given to European patent system which is different from the American one. Financial and innovation data are collected during 1990- 2012, for 599 companies belonging to 15 industries. According to market value approach, the relationship between market-to-book ratio and knowledge assets is proved to be positive and significant. Innovation is more valuable when it contributes to wider knowledge transfer, has larger geographical and technological scopes and radical character.
    Keywords: Technological innovations; Economic value; Financial performance of companies; European patent system; Knowledge transfer;
    JEL: G31 L25 O32 O33
    Date: 2015–06
  2. By: Gehringer, Agnieszka; Klasen, Stephan
    Abstract: We empirically study the role of different family policies in determining women´s labor market behavior in the countries of the European Union between 1997 and 2008. Women tend to assume more family duties than men and, consequently, often participate less in the labor market. At the same time, family policies are to provide support to families while also helping women to reconcile family duties with labor market participation. Their impact, however, is not clear, especially when it comes to different forms of labor market activity. We use a static and dynamic panel econometric framework examining the link between four types of family policies and labor force participation and (part-time and full-time) employment. The results suggest no stable significant impact of any on overall labor force, but higher spending on family allowance, cash benefits daycare benefits appears to promote part-time employment, whereas only spending on parental leave schemes is a significant determinant of women's full-time employment.
    Keywords: labor force participation,part-time employment,full-time employment,family policies,European Union
    JEL: H53 I38 J13 J21
    Date: 2015
  3. By: Maria Laura Parisi; Enrico Marelli; Olga Demidova (-)
    Abstract: The latest crisis has exacerbated two negative macroeconomic phenomena, particularly in Southern Europe. The size and persistence of youth unemployment has become unacceptable after 2010. Stagnation in labour productivity instead goes back to the ‘90s, but it has not improved since then and even worsen with the crisis. In this paper we analysed these two macroeconomic features, using aggregate data, in relation to labour market characteristics. Reforms of regulation, in many countries over the past twenty years, introduced a set of newly designed job contracts that allowed the use of temporary work. At the same time, Employment Protection Regulation encompassed temporary workers too. The availability of new contracts and EPLT changed the incentives of firms to vary their labour needs, and to invest in new technology. Eventually, this should have an impact on labour productivity and unemployment. We distinguished between temporary young and adult workers and, conditional to the level of employment protection, we estimate their labour productivity and the correlation with the rate of youth unemployment. We use macroeconomic data for countries within groups (former Euro zone countries, Euro-zone plus Russia, OECD, G7, G8). Preliminary evidence shows that the share of adult temporary workers clearly and negatively affects labour productivity, no matter the group of countries.
    Keywords: temporary work, labour productivity, youth unemployment
    JEL: J24 J64 J41
    Date: 2015–03–01
  4. By: Andreas Beerli; Ronald Indergand
    Abstract: A pervasive, yet little acknowledged feature of international migration to developed countries is that newly arriving immigrants are increasingly highly skilled. This paper analyses the factors affecting the change in the skill composition of immigrants in Switzerland between 1980 and 2010 using a framework suggested by Grogger & Hanson (2011). Our findings suggest that improved schooling in origin countries of immigrants and a shift in the relative demand for highly educated workers in destinations stand out as the two most important drivers. Yet, while improved schooling would predict only a modest increase in the share of highly educated immigrants and a large increase of middle educated immigrants, we show that demand shifts associated with computerisation are crucial to understand why the share of highly educated immigrants increased sharply while the share of middle educated workers merely stabilised. Additionally, our framework allows evaluating the effect of changes in immigration policy. We find that the recent abolition of quotas for workers from European countries through a bilateral agreement with the EU in 2002 had a small but negative effect on the educational quality of immigrants.
    Keywords: International migration, self selection, migration policy, job polarisation
    JEL: F22 J61 J24 J31
    Date: 2015–04
  5. By: Zsombor Cseres-Gergely (Institute of Economics, Center for Economic and Regional Studies, Hungarian Academy of Sciences); Agota Scharle (Budapest Institute); Arpad Foldessy (University College London)
    Abstract: The paper measures the impact of a wage subsidy for long term unemployed workers, using a large administrative dataset from Hungary. While such subsidies are often promoted as an efficient way to speed up the recovery of the economy or to increase demand for low skilled workers, existing evidence on their employment effects is somewhat inconclusive, especially in the case of transition economies. We examine employment outcomes in various model specifications. Results show a significant impact for men aged over 50, which is driven by the subgroup of those with lower secondary education. The subsidy for jobseekers with at least secondary education and aged over 50 is cost effective for men. We also present some evidence that this is not merely caused by substitution across various sub-groups of jobseekers.
    Keywords: wage-subsidy, evaluation, older workers
    JEL: J38 J68
    Date: 2015–04
  6. By: Venhorst V.; Cörvers F. (GSBE)
    Abstract: We estimate the impact of spatial mobility on job match quality by using a data set of recent Dutch university and college graduates We find positive wage returns related to spatial mobility. However, after controlling for the self-selection of migrants with an IV approach, this effect is no longer significant. We also find that, for our alternative job-match measures, where there is evidence of migrant self-selection, controlling for self-selection strongly reduces the effect of spatial mobility on job match quality. In some cases, the returns on spatial mobility are found to be negative, which may signal forced spatial mobility.
    Keywords: Analysis of Education; Human Capital; Skills; Occupational Choice; Labor Productivity; Wage Level and Structure; Wage Differentials; Geographic Labor Mobility; Immigrant Workers; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics;
    JEL: I21 J24 J31 J61 R23
    Date: 2015
  7. By: Isabel Bodas Freitas (Grenoble School of Management); Fulvio Castellacci (TIK Centre, University of Oslo); Roberto Fontana (Bocconi University); Franco Malerba (Bocconi University); Andrea Vezzulli (Bocconi University)
    Abstract: Do the additionality effects of R&D tax credits vary across sectors? The paper presents a microeconometric analysis of this question for three countries: Norway, Italy and France. We use a panel of firm-level data from three waves of the Innovation Surveys carried out in these countries, referring to the years 2004, 2006 and 2008 respectively. The study estimates input and output additionality effects of R&D tax credits in each of these economies, and it investigates how these effects differ across sectors characterized by different R&D orientation and competition conditions. The results point out that firms in industries with high R&D orientation and in sectors with high market concentration are on average more responsive to fiscal incentives to R&D.
    Date: 2015–04
  8. By: Elisa Giuliani; Arianna Martinelli; Roberta Rabellotti
    Abstract: Firms from emerging countries such as Brazil, India, and China (BIC) are going global, and Europe is attracting around one-third of their direct outward investments. Growing internationalization constitutes an opportunity for technological catch up. In this paper we analyze BIC firms' cross-border inventions with European Union (EU-27) actors, during the period 1990-2012. Our results suggest that cross-border inventions represent an opportunity for BIC firms to accumulate technological capabilities, access frontier knowledge, and appropriate the property rights of co-inventions. This paper contributes to the understanding of the catching up process by emerging country firms, and offers some policy recommendations.
    Keywords: Emerging Countries, Multinationals, Technological Catch Up, Patents, European Union
    Date: 2015–04–24
  9. By: Joakim palme; Axel Cronert
    Abstract: The concept of social investment has gained ground on the EU-level, manifested among other things in the launching of the ‘Social investment package’ by the EU Commission in 2013 and subsequent engagement in the follow up of that initiative. In this context, the Nordic experience has no doubt played an important role and Sweden is an interesting case in point for discussing the social investment approach. We argue that Sweden has long tradition of social investment which has contributed to a number of positive outcomes, such as low poverty and high employment. However, our examination of more recent trends suggests that the achievements are now jeopardised by the trend towards a cheaper ‘Third Way’ version of the social investment approach. Since the investment quality of policy interventions has been diluted, not least in the field of active labour market policy, and old redistribution policies are at drift, it has become difficult to combat old as well as new inequalities and social divisions. Still, a more enlightened development path is open but requires serious recasting of the social investment policy package.
    Keywords: Social investment, welfare state, Swedish reforms, poverty, redistribution, work intensity
    JEL: H53 I32 I38 J21
    Date: 2015–04
  10. By: Dinkel, Andreas; Schanz, Deborah
    Abstract: This paper analyzes the impact of taxation on the location of patents within multinational groups. Based on groups with parents from 36 countries globally and their patent holdings in 36 European countries, we provide insight into the determinants of three subsequent decisions: (1) the decision of whether to locate patents abroad; (2) in which countries to locate patents; and (3) how many patents to locate in each country. Our findings indicate that multinationals take the tax attractiveness of countries into account when making these decisions. Specifically, we show that the statutory tax rate, the taxation of royalties, R&D incentives, and transfer pricing rules help to explain the patent-location choices of multinationals.
    Keywords: International taxation,Tax attractiveness,Intellectual property,Location decision,Multinational enterprise
    JEL: H25 H73 F23
    Date: 2015
  11. By: Francesco Bosello (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo sui Cambiamenti Climatici and Università degli Studi di Milano); Elisa Delpiazzo (Centro Euro-Mediterraneo sui Cambiamenti Climatici); Fabio Eboli (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici)
    Abstract: The present research has been developed within the EU FP7 VECTORS project ( The main scope of the project (2011-2015) has been to evaluate, from a multilateral perspective, drivers, pressures and vectors of changes in marine life of three main European seas (Baltic, Western Mediterranean, North), the mechanisms by which they do so and the impacts that they have on ecosystem structures and functioning as well as on economic activities and wellbeing. This paper describes the methodology, data elaboration and main results of a modelling exercise aiming to assess the economic effect of future changes in the EU marine ecosystem in the medium term (2030). We focus on those changes potentially affecting the fishing and the tourism sectors in two different IPCC SRES scenarios, the A2 and B1, varying in the future trends of population, GDP, prices, as well as the overall impact on environment. Sector-specific economic impacts are channeled through increases in fishing effort, due to lower availability of commercial fish species, and decrease in tourism demand following deterioration of marine ecosystem quality. Impacts on EU coastal countries Gross Domestic Product are negative and larger when the tourism sector is affected. This is explained by the much higher contribution of tourism than fishery in the production of value added. Negative impacts are also larger in the A2 than in the B1 scenario. The largest GDP losses due to adverse impacts on fishery are experienced by Spain (-0.13%), those related to tourism by Italy (almost -1%). Percent changes in sectoral production are notably larger than GDP ones: the largest contraction in fish sector production occurs in France (-24.7%). Notable decrease in coastal tourism demand occurs in Spain and the Netherlands. In general the Western Mediterranean is the most adversely affected region, whereas the Baltic Sea denotes a particular vulnerability to losses in tourism value added compared to the BAU. North Sea countries experience smaller losses.
    Keywords: Impact Assessment, Computable General Equilibrium, Fisheries, Tourism, Marine Ecosystem
    JEL: C68 D58 L83 Q22 Q57
    Date: 2015–03
  12. By: Paulus, Alari
    Abstract: We use income survey data linked with tax records at the individual level for Estonia to estimate the determinants and extent of income tax compliance in a novel way. Unlike earlier studies attributing income discrepancies between such data sources either to tax evasion or survey measurement error, we model these processes jointly. Focussing on employment income, the key identifying assumption made is that people working in public sector cannot evade taxes. The results indicate a number of socio-demographic and labour market characteristics, which are associated with non-compliance. Overall, people in the bottom and the top part of earnings distribution evade much more and about 12% of wages and salaries in total are underreported, which is very substantial for a major income source subject to third party reporting and tax withholding.
    Date: 2015–05–07
  13. By: BEDU Nicolas; VANDERSTOCKEN Alexis
    Abstract: Many studies have looked at the effectiveness of public schemes supporting private R&D but few have highlighted the role regions play in R&D funding. The present article assesses the R&D support package developed in the Aquitaine, France’s number one region in terms of proportion of budget spent on innovation. Its findings show that regional subsidies have induced local SMEs to increase their R&D resources and accelerate their expansion. More broadly, the article enhances understanding of the determinants explaining the effectiveness of public actions supporting private R&D.
    Keywords: SME, R&D subsidies, regional Science and Technology policy, public policy evaluation.
    JEL: H71 O3 R11 R58
    Date: 2015
  14. By: Peter S. Eppinger (University of Tübingen); Nnicole Meythaler (Institute for Applied Economic Research (IAW) at the University of Tübingen); Marc-Manuel Sindlinger (University of Bonn); Marcel Smolka (Department of Economics and Business, Aarhus University, Denmark and IZA)
    Abstract: We provide novel evidence on the micro-structure of international trade during the 2008 financial crisis and subsequent global recession exploring a rich firm-level data set from Spain. The analysis is motivated by the surprisingly strong export performance of Spain in the aftermath of the great trade collapse (dubbed by some as the “Spanish export miracle”). The focus of our analysis is on changes at the extensive and intensive firm-level margins of trade, as well as on performance differences (jobs, productivity, and firm survival) across firms that differ in their export status. We find no adverse effects of the financial crisis on foreign market entry or exit, but a considerable increase in the export intensity of firms after the financial crisis. Moreover, we find that those firms that entered the crisis as exporters (and continued exporting throughout the crisis years) were more resilient to the crisis than those firms that restricted their sales to the domestic market. Finally, in contrast to exporters, non-exporters experienced a significant deterioration in their total factor productivity, which led to an overall decline in the productivity of a significant number of industries in Spanish manufacturing.
    Keywords: international trade, financial crisis, manufacturing, firm-level data, Spain
    JEL: F10 F14 G01 D24
    Date: 2015–04–29
  15. By: Kokko, Ari; Tingvall, Patrik Gustavsson; Videnord, Josefin
    Abstract: In this paper the authors conduct a meta-analysis to examine the link between R&D spending and economic growth in the EU and other regions. The results suggest that the growth-enhancing effect of R&D in the EU15 countries does not differ from that in other countries in general, but it is less significant than that for other industrialized countries. A closer inspection of the data reveals that the weak results for the EU15 stem from comparisons with the US - the US has been able to generate a stronger growth response from its R&D spending. Possible explanations for the US advantage include higher private sector investment in R&D and stronger public-private sector linkages than in the EU. Hence, to reduce the "innovation gap" vis-à-vis the US, it may not be enough for the EU to raise the share of R&D expenditures in GDP: continuous improvements in the European innovation system will also be needed, with focus on areas like private sector R&D and public-private sector linkages.
    Keywords: meta-analysis,R&D,European Union,EU15,USA,economic growth
    JEL: F43 O51 O52
    Date: 2015
  16. By: Francisco J. Bahamonde-Birke; Tibor Hanappi
    Abstract: This paper analyses the impact of the introduction of electromobility in Austria, focusing specifically on the potential demand for electric vehicles in the automotive market. We estimate discrete choice behavioral mixture models considering latent variables; these allows us to deal with this potential demand as well as to analyze the effect of different attributes of the alternatives over the potential market penetration. We find out that some usual assumptions regarding electromobilityalso hold for the Austrian market (e.g. proclivity of green-minded people and reluctance of older individuals), while others are only partially valid (e.g. the power of the engine is not relevant for purely electric vehicles). Along the same line, it was possible to establish that some policy incentives would have a positive effect over the demand for electrical cars, while others - such as an annual Park and Ride subscription or a one-year-ticket for public transportation - would not increase thewillingness-to-pay for electromobility. Our work suggests the existence of reliability thresholds, concerning the availability of charging stations. Finally this paper enunciates and successfully tests an alternative approach to address unreported information regarding income in presence of endogeneity and multiple information sources.
    Keywords: Electromobility, electric vehicles, Hybrid discrete choice model, latent variables, unreported income
    Date: 2015
  17. By: Benjamin Michallet (University Paris I Panthéon-Sorbonne/Paris School of Economics, Paris (France)); Giuseppe Lucio Gaeta (University of Naples, L’Orientale, Naples (Italy)); François Facchini (University of Paris 11 (RITM), Paris (France))
    Abstract: Why do parties offer environmental policies in their political programs? While a number of papers examine the determinants of citizens’ pro-environmental behaviour, we know little about the extent to which political parties adjust their platform towards environmentalism. We investigate this process through data provided by the Manifesto Project Dataset (CMP) for 20 European countries over the period 1970-2008. Following the literature on public concern towards environment, we examine economic, environmental and political determinants. Our findings provide evidence that political parties’ environmental concern is strongly correlated with their political ideology and with country-level economic conditions.
    Keywords: Environmental Concern, Environmental Attitudes, Political Parties, Electoral Manifestos
    JEL: Q58 D78 Z13
    Date: 2015–03
  18. By: Klinger, Sabine; Weber, Enzo
    Abstract: This paper investigates the productivity puzzle in Germany. We focus on the time-varying relationship between German output and employment growth, in particular their decoupling in recent years. We estimate a correlated unobserved components model that allows for both persistent and cyclical time variation in the employment impact of GDP as well as an autonomous employment component capturing other factors than real output. As one result, we measure a permanent decline in GDP impact on employment as well as pronounced effects of the autonomous employment component in the recent years. The development of the estimated impact parameters depends on structural change, but also on labour availability and business expectations. Beyond GDP, a high labour supply, tightness as well as moderate wages and working time reductions boosted employment growth.
    Keywords: decoupling; productivity puzzle; unobserved components; time-varying coefficient; Verdoorn´s law
    Date: 2015–04
  19. By: Marlene Karl
    Abstract: This paper introduces a new and comprehensive dataset on “alternative” banks in EU and OECD countries. Alternative banks (e.g. ethical, social or sustainable banking) experienced a recent increase in media interest and have been hailed as an answer to the financial crisis but no research exists on their stability. This paper studies whether alternative banks differ from conventional banks in terms of riskiness. For this I construct a comprehensive dataset of alternative banks and compare their riskiness with an adequately matched control group of conventional banks using mean comparison and panel regression techniques. The main result is that alternative banks are significantly more stable (in terms of z-score) than their conventional counterparts. The results are robust to different estimation methods and data specifications. Alternative banks also have lower loan to asset ratios and higher customer deposit ratios than conventional banks.
    Keywords: Ethical banking, social banking, bank risk, financial crisis
    JEL: G21 G32 E44 M14
    Date: 2015–05
  20. By: Doerrenberg, Philipp; Schmitz, Jan
    Abstract: We study tax compliance in Slovenia using data generated in a field experiment. Small accounting companies were randomly assigned to an untreated control group and two treatment groups. Companies in the first treatment group received a letter that highlighted the importance of paying taxes and informed about the likelihood of becoming subject to an audit. In the second treatment group, tax officers from the tax authorities handed out in person the same letter that companies in the first treatment group received by post. The results indicate that such letters can increase compliance, and trigger even more compliance if handed over in person. These findings are in line with the theoretical predictions that we derive to rationalize the experiment.
    Keywords: Tax Compliance,Audits,Randomized Field Experiment,Tax authority,Information provision
    JEL: H20 H32 H50 C93
    Date: 2015

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