nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒11‒13
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Saving behavior and housing wealth: Evidence from German micro data By Gröbel, Sören; Ihle, Dorothee
  2. Misalignment of Productivity and Wages Across Regions ?Evidence from Belgian Matched Panel Data By François Rycx; Yves Saks; Ilan Tojerow
  3. Squared Segmentation: How the Insider/Outsider divide across Public/Private Employment shapes attitudes towards markets. By Brigitte Granville; Jaume Martorell Cruz
  4. Cross-Border Technology Differences and Trade Barriers: Evidence from German and French Electricity Markets By Klaus Gugler; Adhurim Haxhimusa
  5. Poverty is a Public Bad: Panel Evidence from Subjective Well-being Data By Heinz Welsch; Philipp Biermann
  6. Uncertain pension income and household saving By van Santen, Peter
  7. Does corporate social responsibility make over-educated workers more productive? By Romina R. Giuliano; Benoît Mahy; François Rycx; Guillaume Vermeylen
  8. Social Ties for Labor Market Access - Lessons from the Migration of East German Inventors By Bender, Stefan; Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin
  9. Non-standard work: what’s it worth? Comparing alternative measures of workers’ marginal willingness to pay By Bryan, Mark L.; Geraci, Andrea
  10. Social participation and self-rated psychological health By Fiorillo, D.; Lavadera, G.L.; Nappo, N.
  11. Has the German reunification strengthened Germany's national innovation system? Triple helix dynamics of Germany's innovation system By Yi, Sæung-gyu; Jun, Bogang
  12. Linking perceived choice complexity with scale heterogeneity in discrete choice experiments: home heating in Finland By Enni Ruokamo; Mikołaj Czajkowski; Nick Hanley; Artti Juutinen; Rauli Svento
  13. Should I stay or should I go? Firms’ mobility across banks in the aftermath of financial turmoil By Davide Arnaudo; Giacinto Micucci; Massimiliano Rigon; Paola Rossi
  14. Quantitative Assessment of Pathways to a Resource-Efficient and Low-Carbon Europe By Martin Distekamp; Mark Meyer
  15. A spatial approach to control for unobserved environmental conditions when measuring firms’ technology: an application to Norwegian electricity distribution networks By Orea, Luis; Álvarez, Inmaculada C.; Jamasb, Tooraj
  16. The impact on wages and worked hours of childbirth in France. By Bruno Rodrigues; Vincent Vergnat
  17. The EU 2020 Innovation Indicator. A Step Forward in Measuring Innovation Outputs and Outcomes? By Jürgen Janger; Torben Schubert; Petra Andries; Christian Rammer; Machteld Hoskens
  18. Housing and credit markets in Italy in times of crisis By Michele Loberto
  19. Impact of solar production on Czech electricity grid system imbalance By Janda, Karel; Tuma, Ladislav
  20. Distributional price effects of rent controls in Berlin: When expectation meets reality By Thomschke, Lorenz
  21. Do fiscal rules reduce the political cycle? Evidence from Italian municipalities By Andrea Bonfatti; Lorenzo Forni
  22. Employment, wages and prices: How did firms adjust during the economic and financial crisis? Evidence from a survey of Luxembourg firms By Thomas Y. Mathä; Cindy Veiga; Ladislav Wintr
  23. Foreign ownership and performance: evidence from a panel of Italian firms By Chiara Bentivogli; Litterio Mirenda

  1. By: Gröbel, Sören; Ihle, Dorothee
    Abstract: Housing property is the most important position in a household's wealth portfolio. Even though there is strong evidence that house price cycles and saving patterns behave synchronously, the underlying causes remain controversial. The present paper examines if there is a wealth effect of house prices on savings using household-level longitudinal data from the German Socio-Economic Panel for the period 1996-2012. We find that young renters increase and young homeowners decrease their savings in response to unanticipated house price shocks, whereas old households only hardly respond to house price changes. We interpret this as evidence of a housing wealth effect.
    Keywords: housing wealth,saving behavior,SOEP,Germany
    JEL: D91 E21 R31
    Date: 2016
  2. By: François Rycx; Yves Saks; Ilan Tojerow
    Abstract: This paper is one of the first to estimate how the region in which an establishment is located affects its productivity, wage cost and costcompetitiveness (i.e. its productivity-wage gap). To do so, we use detailed linked employer-employee panel data for Belgium and rely on methodological approaches from both Hellerstein and Neumark (1995) and Bartolucci (2014) to estimate dynamic panel data models at the establishment level. Our findings show that inter-regional differences in productivity and wages are significant but vanish almost totally, both in industry and services, when controlling for a wide range of covariates, establishment fixed effects and endogeneity. Thus, our results suggest that wage cost and productivity differentials are ceteris paribus relatively well aligned across regions.
    Keywords: Regions; productivity; labour costs; linked panel data
    JEL: C33 J24 J31 R30
    Date: 2016–11–08
  3. By: Brigitte Granville; Jaume Martorell Cruz
    Abstract: This paper addresses an important gap in the literature by exploring the interaction of twin insider-outsider and public private/employment dualities on shaping attitudes towards markets. We show how, in countries highly segmented in both dimensions, the insider-outsider cleavage and the public-private employment division combines into a squared segmentation with public and private insiders, and public and private outsiders. Our assumption is that this squared segmentation is accompanied by negative attitudes towards market mechanisms that hinder reforms required to diminish the gap between insiders and outsiders. To flesh out this dynamic, we use France as our main case study, because it is an economy where these dualities are sharply drawn. We explore our assumption based on the Wave 5 of the World Values Survey, limiting our analysis to French and German respondents. Germany offers a suitable comparison group to France, as it has also a highly dual economy but structured through production sectors rather than through the public/private divide. The results are broadly in line with our assumptions. Unlike in Germany, French respondents’ attitudes towards markets depend heavily on whether they are employed in the public or private sector
    Keywords: labour market dualism, collective bargaining, market attitudes, institutions.
    JEL: J41 Z10 Z18
    Date: 2016–11
  4. By: Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business)
    Abstract: Using hourly data, we show that the convergence of German and French electricity spot prices depends on the employed generation mix structure, on the trade (export/import) capacity between the two countries, and on characteristics of neighbouring markets. Only when German and French electricity markets employ "similar" generation mixes price spreads vanish, and the likelihood for congestion of electricity flows is significantly reduced. This implies that, at least, a part of the convergence that was documented in recent literature is spurious, because it is not (only) driven by the forces of arbitrage, but by the similarity of the generation structures. The direction of congestion matters in this regard. Furthermore, we document consistent evidence for the most important predictions of trade theory if markets are characterized by increasing marginal cost (i.e. supply) curves and limited cross-border capacities.
    Keywords: Market Integration, Electricity, Renewables, Technology Differences, Jaffe Index
    JEL: D47 F15 L81 L98 Q42 Q48
    Date: 2016–10
  5. By: Heinz Welsch (University of Oldenburg, Department of Economics); Philipp Biermann (University of Oldenburg, Department of Economics)
    Abstract: Previous research has found that subjective well-being (SWB) is lower for individuals classified as being in poverty. Using panel data for 39,239 individuals living in Germany from 2005-2013, we show that people’s SWB is negatively correlated with the state-level poverty ratio while controlling for individual poverty status and poverty intensity. The negative relationship between aggregate poverty and SWB is more salient in the upper segments of the income distribution and is robust to controlling for the rate of unemployment and per capita GDP. The character of poverty as a public bad suggests that poverty alleviation is a matter not only of equity, but of efficiency.
    Keywords: poverty; poverty ratio; subjective well-being; public bad; life satisfaction
    JEL: I31 I32 D60
    Date: 2016–11
  6. By: van Santen, Peter (Research Department, Central Bank of Sweden)
    Abstract: This paper investigates the relationship between household saving and pensions, and estimates both the displacement effect of pensions on private saving and the precautionary saving effect due to uncertainty in pension income. I estimate the savings equation derived from a lifecycle model featuring income uncertainty using survey data for Dutch households, with subjective expectations on pension benefits and uncertainty. Exploiting exogenous variation due to pension fund performance, I find that households save significantly more due to uncertainty in pension income. Not controlling for uncertainty biases the estimated displacement effect of pensions on private savings towards zero.
    Keywords: Precautionary saving; Displacement effect; Subjective expectations
    JEL: D91 H55 J26
    Date: 2016–10–01
  7. By: Romina R. Giuliano; Benoît Mahy; François Rycx; Guillaume Vermeylen
    Abstract: This article provides first evidence on whether corporate social responsibility (CSR) influences the productivity effects of overeducation. By relying on detailed Belgian linked employer-employee panel data covering the period 1999-2010, our empirical results exhibit a positive and significant impact of over-education on firm productivity. Moreover, they suggest that the effect of over-education is positively enhanced when the firm implements a corporate social responsibility process, especially when it aims to have: i) a good match between job requirements and workers’ educational level, ii) a diverse workforce in terms of gender and age, and iii) a long-term relationship with its workers. Whenfocussing on required and over-education, the results suggest that CSR, besides representing an innovative and proactive approach for the firms’ stakeholders, may also be beneficial for the firm itself through a bigger increase in productivity for each additional year of required or over-education.
    Keywords: Educational mismatch; Productivity; CSR; Linked panel data
    JEL: J28 I20 J24 M50
    Date: 2016–11–08
  8. By: Bender, Stefan; Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin
    Abstract: We study the impact of social ties on the migration of inventors from East to West Germany, using the fall of the Iron Curtain and German reunification as a natural experiment. We identify East German inventors via their patenting track records prior to 1990 and their social security records in the German labor market after reunification. Modeling inventor migration to West German regions after 1990, we find that Western regions with stronger historically determined social ties across the former East-West border attracted more inventors after the fall of the Iron Curtain than regions without such ties. However, mobility decisions made by inventors with outstanding patenting track records (star inventors) were not impacted by social ties. We conclude that social ties support labor market access for migrant inventors and determine regional choices while dependence on these ties is substantially reduced for star performers.
    Keywords: East Germany; inventors; migration; networks; social ties; transition
    JEL: J60 O30 P20 R23
    Date: 2016–11
  9. By: Bryan, Mark L.; Geraci, Andrea
    Abstract: We compare two alternative ways of measuring workers’ marginal willingness to pay (MWP) for four non-standard working arrangements: flexitime, part-time, night work, and rotating shifts. The first method is based on job-to-job transitions within a job search framework, while the second is based on estimating the determinants of subjective well-being. Using BHPS panel data from 1991-2008, we relate differences in the results to conceptual differences between utility and subjective wellbeing proposed recently in the happiness literature. We conclude that there is not a single representation of MWP: utility trade-offs (revealed by choices) need not be the same as wellbeing trade-offs; and we find evidence that subjective wellbeing is traded off against other goods that provide utility. Overall, we find that workers care particularly about their number of weekly hours.
    Date: 2016–10–20
  10. By: Fiorillo, D.; Lavadera, G.L.; Nappo, N.
    Abstract: Although social capital have been hypothesized to have positive influence on psychological health, few papers found a relationship between social capital dimensions and psychological wellbeing. This study investigates the longitudinal relationship between social participation in associations and self-rated psychological health. The paper uses five waves of the British Household Panel Survey (BHPS) that follows the same individuals between 1991 and 1995. Ordered logit fixed effect methods have been used to study the longitudinal link between structural social capital (being member, active, and both member and active in associations) and self-rated psychological health assessed by single items of the General Health Questionnaire (GHQ-12) controlling for age, marital status, household size, number of children, education, income, economic status, number of visit to GP or family doctor. The paper shows that being both member and active in associations is linked to all “positive†items of self-rated psychological health and to two main “negative†items of psychological wellbeing. Instead, being only member or only active in associations have no statistical effect on single items of the GHQ-12, with few exceptions. Findings highlight the protective role of being both member and active in associations against poor psychological health outcomes.
    Keywords: social capital; social participation; psychological health; ordered logit fixed effect; British Household Panel Survey;
    JEL: C23 D71 I10 I31 Z1
    Date: 2016–11
  11. By: Yi, Sæung-gyu; Jun, Bogang
    Abstract: This paper investigates whether the German reunification strengthened the country's national innovation system, using the Triple Helix model. In particular, it assesses the various dimensions of the innovation system by analyzing co-authorship networks from 1973 to 2014. Despite the series of policies promoting collaboration between the two regions and the rise in the number of regional collaborations and in the number of papers, the results show that the national innovation system of Germany has worsened since the reunification in 1990, and the role of government is critical in encouraging collaboration. Finally, this paper uses survey data on the type of Triple Helix configuration that actually occurred in East Germany as a robustness check.
    Keywords: Triple Helix model,German reunification,National innovation system
    Date: 2016
  12. By: Enni Ruokamo (Finnish Environment Institute (SYKE); Department of Economics); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (Department of Geography and Sustainable Development, University of St Andrews); Artti Juutinen (Department of Economics, Oulu Business School; Natural Resources Institute Finland (Luke)); Rauli Svento (Department of Economics, Oulu Business School)
    Abstract: Choosing a specific heating system is a complex and difficult decision for homeowners as there exists a wide array of heating technologies with different characteristics that one can consider before purchasing. We include multiple heating technologies and attributes in our Choice Experiment design and explore the effect of perceived choice complexity on the randomness of choices. In particular, we investigate how different self-evaluated factors of choice complexity affect mean scale and scale variance. Our findings suggest that perceived choice complexity has a systematic impact on the parameters of econometric models of choice. However, there are differences between alternative self-evaluated complexity-related covariates. Results indicate that individuals who report that answering the choice tasks was difficult have less deterministic choices. Perceptions of the realism of home heating choice options also affect scale and scale variance.
    Keywords: Home heating, Choice experiment, Choice modelling, Scale heterogeneity, Generalized mixed logit, Complexity
    JEL: D12 Q40 Q48 Q51 Q55
    Date: 2016
  13. By: Davide Arnaudo (Bank of Italy); Giacinto Micucci (Bank of Italy); Massimiliano Rigon (Bank of Italy); Paola Rossi (Bank of Italy)
    Abstract: We study the mobility of Italian firms across different lending banks in the aftermath of Lehman Brothers’ collapse, when 40 per cent of the firms analysed changed their pool of lending banks. Using a unique dataset on a sample of about 3,000 Italian firms that encompasses financial and economic records, information on the existence of credit constraints and data on lending relationships with banks, we provide evidence that mobility within the credit market helped to ease credit constraints. Firms that started new banking relationships were able to maintain or even increase their outstanding loans. These firms were generally large and credit-rationed. At the same time, access to new credit lines was more difficult for small and more opaque firms, for which a long-term relationship with their main bank has been the most effective way of overcoming financial constraints. Geographical proximity is also important in affecting credit constraints: the closer the firms are to the lending banks, the lower is the probability of their closing an existing credit relationship and start a new one.
    Keywords: financial crisis, mobility in the credit market, relationship lending
    JEL: G01 G21 G32
    Date: 2016–10
  14. By: Martin Distekamp (GWS - Institute of Economic Structures Research); Mark Meyer (GWS - Institute of Economic Structures Research)
    Abstract: Though the sustainability research community as well as international decision makers seem to share the conviction that, akin to the challenges of climate policy, a great transi-tion will also be needed in order to decouple human wellbeing from resource use over the next decades, there exist only scarce quantitative assessments of possible transition scenarios which do also concern this matter. Our paper is intended to advance this branch of research by a presentation of key scenario insights from the global simulation model GINFORS which take account of the complex interrelations between different environmental objectives. Whereas a multitude of publications already applied various MRIO databases for ex post assessments of resource-related national footprint indicators, there exist only scarce ex ante assessments of possible transition scenarios concerning this matter. The modelling framework of GINFORS also rests on a MRIO database. Thus, GINFORS is also able to map quantitative indicators of material extractions embedded in regional consumption activities over the global supply chain.
    Keywords: raw material consumption, RMC, raw material input, RMI, CO2 emissions, macro-econometric model, GINFORS, MRIO, WIOD, policy simulations, resource-efficiency, low-carbon economy
    JEL: Q34 Q37 Q51 Q56
    Date: 2016
  15. By: Orea, Luis; Álvarez, Inmaculada C.; Jamasb, Tooraj
    Abstract: An important methodological issue for the use of efficiency analysis in incentive regulation of regulated utilities is how to account for the effect of unobserved cost drivers such as environmental factors. This study combines the spatial econometric approach with stochastic frontier techniques to control for unobserved environmental conditions when measuring firms’ efficiency in the electricity distribution sector. Our empirical strategy relies on the geographic location of the firms as a useful source of information that has previously not been explored in the literature. The underlying idea in our empirical proposal is to utilise variables from neighbouring firms that are likely to be spatially correlated as proxies for the unobserved cost drivers. We illustrate our approach using the data of Norwegian distribution utilities for the years 2004 to 2011. We find that the lack of information on weather and geographic conditions can likely be compensated with data from surrounding firms using spatial econometric techniques. Combining efficiency analysis and spatial econometrics methods improve the goodness-of-fit of the estimated models and, hence, more accurate (fair) efficiency scores are obtained. The methodology can also be used in efficiency analysis and regulation of other types of utility sectors.
    Date: 2016
  16. By: Bruno Rodrigues; Vincent Vergnat
    Abstract: Using French administrative data, we estimate the impact of the birth of a first, second and third child on hourly wages, as well as for hours worked, for both women and men. We compute the impact on these out- come variables, two, four and six years after the birth of the child, and focus on the distinction between highly educated women and women with a high school degree or less. We also take the maternity leave (or pa- ternity leave in case of men) duration into account. Estimation is done with difference-in-differences and we compute bootstrapped confidence intervals. Results show both lower and highly educated women decrease significantly their working hours after the birth of their child. Men are, for the most part, not much impacted by the birth of their children. Ma- ternity leave duration influences the magnitude of the impact of the birth, especially on the hourly wages of educated women.
    Keywords: Fertility decisions, Labour Supply, Difference in Differences, Family pay gap.
    JEL: D10 J13
    Date: 2016
  17. By: Jürgen Janger (WIFO); Torben Schubert; Petra Andries; Christian Rammer; Machteld Hoskens
    Abstract: In October 2013, the European Commission presented a new indicator intended to capture innovation outputs and outcomes and thereby "support policy-makers in establishing new or reinforced actions to remove bottlenecks that prevent innovators from translating ideas into products and services that can be successful on the market". This paper aims to evaluate the usefulness of the new indicator against the background of the difficulties in measuring innovation outputs and outcomes. We develop a unique conceptual framework for measuring innovation outcomes that distinguishes structural change and structural upgrading as two key dimensions in both manufacturing and services. We conclude that the new indicator is biased towards a somewhat narrowly defined "high-tech" understanding of innovation outcomes. We illustrate our framework proposing a broader set of outcome indicators capturing also structural upgrading. We find that the results for the modified indicator differ substantially for a number of countries, with potentially wide-ranging consequences for innovation and industrial policies.
    Keywords: Innovation Output, Innovation Outcome, Innovation Measurement, Structural Change, Structural Upgrading, EU 2020 Strategy, Innovation Policy
    Date: 2016–11–08
  18. By: Michele Loberto (Bank of Italy Author-Name Francesco Zollino; Bank of Italy)
    Abstract: We investigate the determinants of Italian house prices and residential investments in a structural model with possible disequilibria in the market for lending to both households and firms in the building sector. Based on a structural approach that takes into account the multifold relationships between demand and supply within the housing and the credit markets, we find that, while house prices react mostly to disposable income and demographic pressures, lending conditions also exert a significant impact. During the recent crises the contribution of declining bank rates to household lending was limited, due to the greater deleveraging needs of Italian banks. Conventional monetary policy has supported house prices, albeit with declining intensity as policy rates have gradually approached the lower bound. At the same time, unconventional monetary policy measures have sustained house prices via their effect on Italian sovereign spreads, which have shrunk by a sizeable amount since they peaked in the period between late 2011 and early 2013. Finally, we find that house price developments stayed in line with the fundamentals, during both the global financial and sovereign debt crisis, with only minor and occasional discrepancies.
    Keywords: house prices, credit, system of simultaneous equations
    JEL: E52 G21 R20 R30
    Date: 2016–10
  19. By: Janda, Karel; Tuma, Ladislav
    Abstract: We consider the electricity grid imbalance settlement mechanism in the Czech Republic. We focus on the influence of photovoltaic electricity on the behavior of the system imbalance in this mechanism. Out of the family of GARCH models, we use TARCH model, which allows different behavior if the residual are negative, to model the asymmetric effect of positive or negative electricity system imbalance. Our results show that the introduction of photovoltaics has substantial effect on the Czech electricity system imbalance, leading to positive system imbalance. The influence of photovoltaics on the volatility of the Czech electricity system imbalance is statistically significant, but it is not substantial in economic terms.
    Keywords: solar; photovoltaics; electricity; system imbalance
    JEL: Q4 Q41 Q42 Q47
    Date: 2016–11–03
  20. By: Thomschke, Lorenz
    Abstract: An enormous increase of initial rents in many German cities over the last decade has prompted the current grand coalition to implement a new rent control called "Mietpreisbremse" in 2015 (literally a brake on rental prices). This reform aims to stop exploding rents and to provide particularly more affordable rental housing in the lower and medium rental price segment. Since then, rental prices of re-lettings are capped at a local rental index in declared areas. As an exception, newly built flats or those that have been reconstructed extensively are not affected by the reform and landlords may always uphold the rent paid by previous tenant. I apply a classical difference-in-difference strategy and a new changes-in-changes model including covariates in order to analyze both average and distributional price effects of the intervention in Berlin. The basis for empirical results is data on newly offered rental prices from 2012 to 2016 that is also enhanced with the local rental index and previous rents. Thereby, I can define the range of effects one could reasonably expect beforehand. Results indicate that the reform indeed lowered initial rents temporarily. In contrast to the reforms intention, however, significant effects are found only in the upper price segment. The effects also fall short of anticipated expectation and fade out too fast. Meanwhile, newly offered rental prices even outrun the pre-reform level, which highlights the lack of enforcement supplementary. I will therefore argue that the reform so far has failed to meet the intended objective and is poorly targeted.
    Keywords: rent control,quantile regression,counterfactual distribution,difference-in-difference,changes-in-changes
    JEL: R21 R23 R31 R33 C1
    Date: 2016
  21. By: Andrea Bonfatti (University of Padova); Lorenzo Forni (University of Padova)
    Abstract: The paper provides evidence that fiscal rules can limit the political budget cycle. It uses data on Italian municipalities during the early 2000 and shows that: 1) municipalities are subject to political budget cycles in capital and total spending; 2) the Italian sub-national fiscal rule introduced in 1999 has been enforced by the central government; 3) municipalities subject to the fiscal rule show more limited political budget cycles than municipalities not subject to the rule. In order to identify the effect, we rely on the fact that the domestic fiscal rule does not apply to municipalities below 5,000 inhabitants. We find that the political budget cycle increases real capital spending by about 15 percent on average, and total spending by 5 percent, in the years prior to municipal elections and that the sub-national fiscal rule reduces these figures by about one third. A regression discontinuity analysis around the 5,000 threshold reinforces these results, as the reduction in capital spending in pre-electoral years for municipalities subject to the fiscal rule is about two-thirds as compared to the municipalities not subject to the rule.
    Keywords: fiscal rules, local government finance, difference-in-difference.
    JEL: C21 C23 H62 H72 H77
    Date: 2016–09
  22. By: Thomas Y. Mathä; Cindy Veiga; Ladislav Wintr
    Abstract: This report presents new insights on the nature, size and persistence of various shocks (demand, credit, costs etc.) experienced by Luxembourg firms during the initial years of the economic crisis in 2008-09 and subsequently in the period 2010-13, as well as on how firms adjusted to these shocks in terms of employment, wages and prices. It discusses the extent to which institutional changes in the Luxembourg labour market through various public support measures helped alleviate the effects of the economic crisis.
    Keywords: Economic and financial crisis, reaction to shocks, wage and price rigidity, firms, survey, WDN
    JEL: C25 D22
    Date: 2016–10
  23. By: Chiara Bentivogli (Bank of Italy); Litterio Mirenda (Bank of Italy)
    Abstract: The paper studies the impact of foreign ownership on a firm’s economic performance. We use a unique panel dataset to test the foreign ownership premium by comparing our sample of firms based in Italy and owned by a foreign subject with a sample of purely domestic firms that, in order to have a proper counterfactual, were selected using propensity score matching. Our difference-in-differences results show the existence of a premium for the size, profitability and financial soundness of the foreign-owned companies. The premium increases with time, is concentrated in the service sector, and disappears if the foreign investor is based in a fiscal haven.
    Keywords: multinational enterprise, ownership, foreign direct investment, firm performance
    JEL: F23 F61
    Date: 2016–10

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