nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒07‒09
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Active labour market policies and short-time work arrangements: evidence from a survey of Luxembourg firms By Efstathiou, Konstantinos; Mathä, Thomas Y.; Veiga, Cindy; Wintr, Ladislav
  2. The Effects of Paternity Leave on Fertility and Labor Market Outcomes By Lídia Farré; Rosa Ferrer
  3. Job polarization, task prices and the distribution of task returns By Cavaglia, Chiara; Etheridge, Ben
  4. Is it good to be too light? Birth weight thresholds in hospital reimbursement systems By Reif, S.; Wichert, S.; Wuppermann, A.;
  5. Rising Pension Age in Italy: Employment Response and Program Substitution. By Ardito, Chiara
  6. Indirect land use change (iLUC) revisited: An evaluation of current policy proposals By Delzeit, Ruth; Klepper, Gernot; Söder, Mareike
  7. Research, knowledge transfer and innovation: the effect of Italian universities’ efficiency on the local economic development 2006-2012 By Tommaso Agasisti; Cristian Barra; Roberto Zotti
  8. Spatial Analysis of Emissions in Sweden By George Marbuah; Franklin Amuakwa-Mensah
  9. Corporate Debt Overhang in Croatia: Micro Assessment and Macro Implications By Ana Martinis; Igor Ljubaj
  10. Firms' knowledge acquisition during dual-track VET: Which sources are important for innovativeness? By Christian Rupietta; Harald Pfeifer; Uschi Backes-Gellner
  11. The Difficult School-to-Work Transition of High School Dropouts: Evidence from a field experiment By Cahuc, Pierre; Carcillo, Stéphane; Minea, Andreea
  12. Cyclical trend of labor reallocation in Poland: transition and structural change By Stanis³aw Cichocki; Joanna Tyrowicz; Lucas van der Velde
  13. Who are the ‘ghost’ MPs? Evidence from the French Parliament By Nicolas Gavoille
  14. R&D Policy regimes in France: New Evidence from a spatio-temporal Analysis By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  15. Assessing the Impact of a Minimum Income Scheme in the Basque Country By Sara de La Rica; Lucía Gorjón
  16. Gender occupational segregation: the role of parents By Magdalena Smyk
  17. Leaving an emissions trading scheme – insights from the United Kingdom By Richard S.J. Tol
  18. Smart Specialization policy in the EU: Relatedness, Knowledge Complexity and Regional Diversification By Pierre-Alexandre Balland; Ron Boschma; Joan Crespo; David L. Rigby
  19. New firms’ bankruptcy: does local banking market matter? By Giuseppe Arcuri; Maurizio La Rocca; Nadine Levratto
  20. Economics of a good night's sleep By Joan Costa-i-Font; Sarah Flèche
  21. Distorted Advice in Financial Markets: Evidence from the Mortgage Market By Gambacorta, Leonardo; Guiso, Luigi; Mistrulli, Paolo Emilio; Pozzi, Andrea; Tsoy, Anton
  22. Expanding Schooling Opportunities in the Netherlands: A Replication of Leuven et al. (2010) By Asaad Ismail Ali; Andrea Kutinova Menclova
  23. Board Quotas and Director-Firm Matching By Ferreira, Daniel; Ginglinger, Edith; Laguna, Marie-Aude; Skalli, Yasmine
  24. Consistent and robust delimitation of price zones under uncertainty with an application to Central Western Europe By Tim Felling; Christoph Weber
  25. Pre- and post-award outsourcing: Temporary partnership versus subcontracting in public procurement By Laura Rondi; Paola Valbonesi
  26. All on board? New evidence on board gender diversity from a large panel of firms By Joanna Tyrowicz; Jakub Mazurek
  27. Productivity and trade spillovers: Horizontal crowding-out versus vertical synergies in Europe as a response to the Foreign Direct Investment By Hanousek, Jan; Kocenda, Evzen; Vozarova, Pavla
  28. Why growth rates differ? Path of innovation in Italian provinces. By Michele Capriati; Marialuisa Divella
  29. Educational Disparities in the Battle Against Infertility: Evidence from IVF Success By Fane Groes; Daniela Iorio; Man Yee (Mallory) Leung; Raül Santaeulàlia-Llopis

  1. By: Efstathiou, Konstantinos; Mathä, Thomas Y.; Veiga, Cindy; Wintr, Ladislav
    Abstract: We analyse the use of active labour market policy (ALMP) measures and short-time work arrangements (STWAs) by Luxembourg firms during the years of economic and financial crisis (2008-09) and the subsequent European sovereign debt crisis (2010-13). About 34% of Luxembourg firms used ALMPs between 2008 and 2013. Economy-wide, use of ALMPs increased along both the extensive margin (more firms) and the intensive margin (more measures per firm). The likelihood that a firm hired with recourse to ALMPs is greater for large, domestically oriented, multiple establishment firms, firms facing strong demand, with concerns about labour cost pressures and unavailability of skilled labour. The crisis saw a surge in firms using STWAs. The likelihood of applying for STWAs increases with demand volatility, the share of workers with permanent contracts, export orientation and the inability to shift workers between establishments. Firms reported that 20-25% of jobs in STWAs were saved by this measure. JEL Classification: C25, J63, J68
    Keywords: active labour market policy, crisis, firms, short-time work arrangements, survey
    Date: 2017–06
  2. By: Lídia Farré; Rosa Ferrer
    Abstract: This paper studies the effects of a father quota in the parental leave period on households' labor market and fertility decisions. Identification is based on the 2007 reform of the Spanish family benefit system, which extended the sixteen weeks of paid parental leave by two additional weeks exclusively reserved for fathers and non- transferable to mothers. Using a regression discontinuity design, we show that the reform substantially increased the take-up rate of fathers (by as much as 400%), as well as the re-employment probability of mothers shortly after childbirth (by about 11%). However, it did not affect parents' longer-term leave-taking or employment behavior. We also find that the introduction of the two weeks of paternity leave delayed higher- order births and reduced subsequent fertility among older women (by about 15%). These results suggest a limited scope for the father quota to alter household behaviors beyond the parental leave period and reduce gender inequality at the workplace.
    Keywords: natural experiment, paternity leave, fertility, labor market and gender
    JEL: J48 J13 J16
    Date: 2017–07
  3. By: Cavaglia, Chiara; Etheridge, Ben
    Abstract: We make two contributions to understanding the large shifts in occupational structure seen across developed countries. First, we estimate underlying prices on occupations, grouped by predominant task, using panel data from the UK and Germany. In both countries, price growth is positively associated with employment share growth. This pattern, which disappears with observed wages, is consistent with changes to labour demand, such as from technological changes. Second, we use the underlying Roy framework to further interpret these movements, by identifying the covariance structure of returns across tasks. The estimates show the importance of sorting based on productivity in abstract tasks.
    Date: 2017–06–28
  4. By: Reif, S.; Wichert, S.; Wuppermann, A.;
    Abstract: Birth weight manipulation is common in per-case hospital reimbursement systems, in which hospitals receive more money for otherwise equal newborns with birth weight just below compared to just above specific birth weight thresholds. As hospitals receive more money for cases with weight below the thresholds, having a (reported) weight below a threshold could benefit the newborn. Also, these reimbursement thresholds overlap with diagnostic thresholds that have been shown to affect the quantity and quality of care that newborns receive. Based on the universe of hospital births in Germany from the years 2005–2011, we investigate whether weight below reimbursement relevant thresholds triggers different quantity and quality of care. We find that this is not the case, suggesting that hospitals’ financial incentives with respect to birth weight do not directly impact the care that newborns receive.
    Keywords: neonatal care; DRG upcoding; quantity & quality of care;
    JEL: I11 I18
    Date: 2017–06
  5. By: Ardito, Chiara (University of Turin)
    Abstract: This paper investigates the impact of the 1992 Italian Pension Reform tightening minimum pension age for men on several labour market outcomes. In particular, both its intended (on retirement and employment) and unintended effects (on other components of social welfare) are considered. The empirical analysis is based on a large administrative database and it exploits the quasi-natural experiment offered by the gradual phase in of the reform. Results show that the reduced pension benefit claiming induced by the reform did not lead to a one-to-one increase in employment, inasmuch we find evidence of social support substitution. Workers facing stricter eligibility conditions demanded more disability and unemployment benefits and yet, the probability of inactivity increased the most. Sensitivity checks show that the results are very robust and that they are not driven by an extension of the receipt time of people already receiving alternative welfare benefits before the reform. The size of the effects vary across socioeconomic groups and individuals with poorer health, in manual occupations and with lower earnings resulted the most constrained by the new pension rules, experiencing the highest increase in employment and substitution between retirement and other social. security programs.
    Date: 2017–06
  6. By: Delzeit, Ruth; Klepper, Gernot; Söder, Mareike
    Abstract: The contribution of biofuels to save greenhouse gas emissions has been challenged over the last years. A still unresolved question is how to quantify emissions from indirect land use change (iLUC). In this article we discuss the implications of uncertainties on the current policy proposals in the European Union (EU). We conclude that it is inappropriate to calculate crop-specific iLUC-emissions and to include them into binding regulation. We argue that modelling results, particularly crop-specific ones, should not be used for policy decisions. Our discussion of the current EU policy proposal suggests that a combination of an increase in the minimum emissions savings threshold and limits to biofuel production are a safe way to ensure with a high degree of certainty a climate mitigation impact of biofuels.
    Keywords: biofuel policy,indirect land use change,European Union,policy proposals
    JEL: Q42 Q24 Q48 Q16
    Date: 2017
  7. By: Tommaso Agasisti (Politecnico di Milano School of Management); Cristian Barra (Università di Salerno); Roberto Zotti (Università di Salerno)
    Abstract: In this paper, we test whether there is a link between the performance of universities and the local economic development of the territory where they operate. The performance of academic institutions is measured through an efficiency concept, estimated by means of an innovative Stochastic Frontier Analysis (SFA), and considering indicators of teaching, research and ‘third mission’ as outputs. A system generalized method-of-moments (Sys- GMM) dynamic panel estimator, instrumented with time lags and differences is estimated over the period from 2006 to 2012 to solve the potential endogeneity of the explanatory variables. Our findings reveal that the presence of efficient universities fosters local economic development, and that knowledge spillovers occur between areas through the geographical proximity to the efficient universities.
    Keywords: Higher education; knowledge spillovers; local economic development; efficiency of universities
    JEL: I21 E01
  8. By: George Marbuah (Department of Economics, Swedish University of Agricultural Sciences); Franklin Amuakwa-Mensah (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: This paper contributes to an emerging literature on the environmental Kuznets curve (EKC) relationship between pollution and income at the local level by analyzing emissions of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxides (NOX), carbon monoxide (CO), particulate matter (PM2.5 and PM10) and total suspended particulate (TSP). We conduct several spatial statistical and econometric tests to account for spatial dependence between 290 Swedish municipalities on the selected emissions. Results highlight evidence that the pollution and income relationship is significantly characterized by spatial interaction effects. That is, municipality per capita emissions are strongly influenced by emissions trajectories in neighbouring municipalities. Implications of our findings on policy are discussed.
    Keywords: Environmental Kuznets curve, Spatial econometric analysis, Emissions, Sweden,
    JEL: Q53 Q55 R12
    Date: 2017–06
  9. By: Ana Martinis (The Croatian National Bank, Croatia); Igor Ljubaj (The Croatian National Bank, Croatia)
    Abstract: High corporate sector leverage has often been highlighted as one of the major impediments to economic recovery. We conduct a debt sustainability analysis for Croatian corporates based on firm-level data. The analysis shows that around one third of the corporate debt in Croatia is unsustainable, thus pointing to sizeable deleveraging needs. By relating the estimated firm-level debt overhang indicator with investment activity, we find that over-indebted firms have reduced their investment to a greater extent than those without debt overhang. This especially holds among exporters and domestically owned private companies, whose higher sensitivity to unsustainable debt probably explains why they are less debt burdened. Our paper contributes to the existing literature by showing that, in the case of Croatia, the estimated firm-level debt sustainability thresholds, unlike the aggregate thresholds, capture the asymmetrically negative effect of debt overhang on investment. The estimated size and impact of the debt overhang in Croatia warrant policy engagement that would include more efficient bankruptcy procedures, swifter balance sheet clean-up supported by specific tax treatments, enhanced restructuring of unsustainably indebted state-owned companies as well as a comprehensive policy strategy for improving business climate and competitiveness.
    Keywords: corporate debt, investment, debt overhang, deleveraging, crisis, Croatia
    JEL: D22 E22 F34 G31
    Date: 2017–06
  10. By: Christian Rupietta (University of Wuppertal); Harald Pfeifer (Federal Institute for Vocational Education and Training (BIBB)); Uschi Backes-Gellner (University of Zurich)
    Abstract: Researchers debate for more than 3 decades on the effect of vocational training on innovations. While some studies show a negative effect of vocational education that firms organize on its own, other studies show a positive effect for vocational education that is organized on a sectoral or national level such as in Germany or Switzerland. A characteristic of these vocational education and training (VET) systems is a high level of standardization and regulation. In fact many elements of VET are regulated in national law, training ordinances and curricula, but firms nevertheless less still have a high flexibility when it comes to the organization of workplace training. In this paper we analyze how firms organize their workplace training, which training methods they use and which training methods they apply jointly. As each training method e.g. training during work or external courses, transfers a specific set of skills and knowledge to apprentices, we analyze how firms use training methods to promote their innovation activity. Our results show that there is a large variety in the organization of workplace training. In sum firms make use of the flexibility to design workplace training that fits their needs best. We conclude with implications for the design of VET systems and firms.
    Keywords: Learning Modes, Innovation, Vocational Education, fsQCA, negative binomial regression
    Date: 2017–07
  11. By: Cahuc, Pierre; Carcillo, Stéphane; Minea, Andreea
    Abstract: This paper investigates the effects of the labor market experience of high school dropouts four years after leaving school by sending fictitious resumes to real job postings in France. Compared to those who have stayed unemployed since leaving school, the callback rate is not raised for those with employment experience, whether it is subsidized or non-subsidized, in the market or non-market sector, if there is no training accompanied by skill certification. In particular, we find no stigma effect associated with subsidized or non-market sector work experience. Moreover, training accompanied by skill certification improves youth prospects only when the local unemployment rate is sufficiently low, which occurs in one fifth of the commuting zones only.
    Keywords: Job subsidies; Training; youth unemployment
    JEL: J60 J68
    Date: 2017–06
  12. By: Stanis³aw Cichocki (University of Warsaw); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw); Lucas van der Velde (Group for Research in Applied Economics (GRAPE))
    Abstract: Using data from the Polish Labor Force Survey for 1995-2015 we construct measures of worker flows and inquire their cyclical properties as a way to test the predictions of structural change/transition theories regarding the reallocation process that took place in Eastern European and FSU countries. This process has two features: the decline in public sector employment combined with an increase in private sector employment and the reallocation of labor from manufacturing to service sector. We find that labor market adjustments tend to amplify in upturns of the business cycle, while worker flows contribute only a fraction to the changing structure of employment.
    Keywords: wage inequality, structural change, transition, skill biased technological change
    JEL: J21 J62 P31
    Date: 2017
  13. By: Nicolas Gavoille (Stockholm School of Economics in Riga, Latvia - Condorcet Center for Political Economy, CREM CNRS UMR6211, University Rennes 1, France)
    Abstract: This paper studies the characteristics of the ghost deputies of the French National Assembly, i.e. deputies who do not have any official recorded activity over a whole year. Using a rich dataset providing various information about all deputies from 1959 to 2012, the results indicate that the typical ghost deputy is an old man with a low level of schooling, member of a large party which does not support the government and who is elected in jurisdiction with a low level of political competition. However, personal characteristics are less and less correlated with performance over the years. Finally, ghost deputies face more difficulties to achieve reelection, but are penalized only at the first round, voters exclusively considering national factors at the second round.
    Keywords: Bad politicians, Legislative activity, French politicians, Leg-islative elections, Vote-Popularity function
    JEL: D72 J45
    Date: 2017–06
  14. By: Benjamin Montmartin (UniversitŽ C™te dÕAzur, France; GREDEG CNRS); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GAEL UMR 1215; UniversitŽ Grenoble Alpes, France)
    Abstract: Using a unique database containing information on the amount of R&D tax credits and regional, national and European subsidies received by firms in French NUTS3 regions over the period 2001-2011, we provide new evidence on the efficiency of R&D policies taking into account spatial dependency across regions. By estimating a spatial Durbin model with regimes and fixed effects, we show that in a context of yardstick competition between regions, national subsidies are the only instrument that displays total leverage effect. For other instruments internal and external effects balance each other resulting in insignificant total effects. Structural breaks corresponding to tax credit reforms are also revealed.
    Keywords: Additionality, French policy mix, R&D investment, Spatial panel, Structural break
    JEL: H25 O31 O38
    Date: 2017–06
  15. By: Sara de La Rica; Lucía Gorjón
    Abstract: In this paper we assess the impact of a Minimum Income Scheme (MIS) which has been operating in the Basque Country, one of Spain’s 17 regions, for more than twenty years. In particular, we test whether the policy delays entry into employment for recipients. In addition, we test the efficacy of policies aimed at enabling recipients of the MIS to re-enter employment. Our results indicate that on average the Minimum Income Scheme, in addition to preventing social exclusion by providing financial support, does not delay entry into employment. However, the impact differs from one demographic group to another. Furthermore, Active Labour Market Policies designed for this group, in particular training, have a strong positive impact on finding a new job.
    Date: 2017–05
  16. By: Magdalena Smyk (Group for Research in Applied Economics (GRAPE))
    Abstract: Gender occupational segregation is one of the most stable phenomena of the labor market. In this study we employ PSID dataset to test whether the fact that women have different professions than men can be, at least partially, explained by their parents occupational history. We find that fathers profession, both first one and the one observed by the son correlate positively with gender intensity of son's occupation. Mother's first occupation is associated with daughter's, but the one that it is performed by mother during daughter's growing up is insignificant. While father's profession is negatively correlated with gender intensity of daughter's profession, mother's occupation does not matter for son's career.
    Keywords: choice of occupation, family, gender occupational segregation
    JEL: J16 J13 J24
    Date: 2017
  17. By: Richard S.J. Tol (Department of Economics, University of Sussex; Department of Spatial Economics, Vrije Universiteit Amsterdam; Institute for Environmental Studies, Vrije Universiteit Amsterdam; Tinbergen Institute, Amsterdam; CESifo, Munich)
    Abstract: The United Kingdom may opt to leave the EU Emissions Trading System (ETS) for greenhouse gases. If so, a central plank of UK climate policy will need to be replaced at short notice. The UK is a large importer of emission permits, and meeting its climate policy targets would be much harder and dearer without the EU ETS. The impact on the EU would be limited, although UK permits circulating in the rest of the EU would lose their legal standing between Brexit and 2021. Non-EU countries take part in the EU ETS, and this appears to be the best option for the UK post-Brexit.
    Keywords: climate policy; tradable permits; Brexit; EU ETS
    JEL: Q54
    Date: 2017–06
  18. By: Pierre-Alexandre Balland; Ron Boschma; Joan Crespo; David L. Rigby
    Abstract: Smart specialization has become a hallmark of the EUÕs Cohesion Policy. Envisaged as a bottom-up initiative identifying local knowledge cores and associated competitive advantages, the operationalization of smart specialization has been rather limited, as a coherent set of analytical tools to guide the policy directives remains elusive. To tackle the weak underpinning of smart specialization policy, we propose a policy framework around the concepts of relatedness and knowledge complexity. We use EPO patent data to provide evidence on how EU regions develop new technologies in the period 1990-2009. We find that diversifying into more complex technologies is highly attractive but difficult for EU regions to accomplish. Regions can overcome this diversification dilemma by developing new complex technologies that build on local related capabilities. We use these findings to construct a policy framework for smart specialization that highlights the potential risks and rewards for regions of adopting competing diversification strategies. We show how potential costs of alternative strategies in regions may be assessed by making use of the relatedness concept, and how potential benefits of various smart specialization strategies can be derived from estimates of the complexity of technologies. A series of case-studies of different types of regions illustrate the utility of this policy framework. Length:
    JEL: O25 O38 R11
    Date: 2017–07
  19. By: Giuseppe Arcuri; Maurizio La Rocca; Nadine Levratto
    Abstract: This paper investigates the role of local context, with regard to the effect of local financial development and banking concentration, on a new firm’s probability of bankruptcy. Our empirical setting is based on the Logit Multilevel Model that better allows the treatment of data referring to different levels of aggregation (firm and local variables) applied to new firms located in Italian provinces. We find that a higher level of financial development in a province decreases the likelihood of a new firm’s bankruptcy. This result is robust considering a 2SLS regression in which we use instruments for the local financial development and for the concentration of bank branches. In addition, our estimations suggest that the effect of local financial development and bank concentration is shaped by size. Local financial development is particularly significant for small start-ups, which traditionally suffer from great difficulty in accessing credit, whereas local banking concentration reduces the probability of bankruptcy for large, new firms.
    Keywords: Probability of bankruptcy, new firms, multilevel model, local banking structure
    JEL: C26 C30 M13 R11
    Date: 2017
  20. By: Joan Costa-i-Font; Sarah Flèche
    Abstract: Parents whose sleep quality is reduced by young children waking them in the night are less likely to work, work shorter hours and/or earn less than otherwise similar people who enjoy a good night's sleep. The negative labour market effects of sleep disruption caused by children are particularly strong for low-skilled mothers. These are among the findings of research by Joan Costa-i-Font and Sarah Flèche, which uses data on 14,000 families in and around the city of Bristol in the UK to investigate the link between mothers' employment outcomes and their quality of sleep, measured by how much they are woken by their children at night. The researchers note that before now, the effects of sleep deprivation on economic activity have received surprisingly scant attention.
    Keywords: child sleep, sleep, maternal employment, working hours, job satisfaction
    JEL: J13 J22 I18 J28
    Date: 2017–07
  21. By: Gambacorta, Leonardo; Guiso, Luigi; Mistrulli, Paolo Emilio; Pozzi, Andrea; Tsoy, Anton
    Abstract: Many households lack the sophistication required to make complex financial decision, which exposes them to the risk of being exploited when seeking advice from intermediares. We set up a structural model of financial advice, in which banks aim at issuing their ideal mix of fixed and adjustable rate mortgages and can achieve such goal by setting rates and providing advice to their clientele. "Sophisticated" households know the mortgage type best for them, whereas "naïve" are susceptible tobank's advice. Using the data on the universe of Italian mortgages, we recover the primitives of the model and quantify the welfare implications of distorted financial advice. The cost of the distortion is equivalent to increasing the annual mortgage payment by 1,177 euros. Losses are bigger for the naive, but sophisticated households suffer as well. However, since even distorted advice conveys information, banning advice altogether is not welfare improving and would instead result in a loss of 736 euros per year on average. A financial literacy campaign is beneficial for all, though in different degrees.
    Keywords: consumer protection; distorted financial advice; mortgage market
    JEL: D12 D18 G21
    Date: 2017–06
  22. By: Asaad Ismail Ali; Andrea Kutinova Menclova (University of Canterbury)
    Abstract: In the Netherlands, primary schools have a rolling admissions policy. In particular, children can individually start school right after their fourth birthday instead of starting with a cohort on a fixed date. Children with birthdays during school holidays start together at the beginning of the next term. Leuven et al. (2010) indicated that these two features of the Dutch schooling system create adequate exogenous variation in children’s enrolment opportunities to identify the effects of additional early formal education on later test scores. This study replicates Leuven et al. and finds some differences.
    Keywords: replication, early childhood education, achievement
    JEL: I21 I28 J24
    Date: 2017–06–29
  23. By: Ferreira, Daniel; Ginglinger, Edith; Laguna, Marie-Aude; Skalli, Yasmine
    Abstract: We study the impact of board gender quotas on the labor market for corporate directors. We find that the annual rate of turnover of female directors falls by about a third following the introduction of a quota in France in 2011. This decline in turnover is more pronounced for new appointments induced by the quota, and for appointments made by firms that regularly hire directors who are members of the French business elite. By contrast, the quota has no effect on male director turnover. The evidence suggests that, by changing the director search technology used by firms, the French quota has improved the stability of director-firm matches.
    Keywords: Corporate Boards; corporate governance; Gender Quotas; labor markets; Matching; Turnover
    JEL: G34 G38 J63 J70
    Date: 2017–06
  24. By: Tim Felling; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen))
    Abstract: New and alternative delimitations of price zones for Central Western Europe (CWE) might constitute a mid-term solution to cope with the increasing congestion in the electricity transmission grids. The significantly growing infeed from renewable energy sources puts more and more pressure on the grid and emphasizes the need for improved congestion management. Thus, a new delimitation of price zones is frequently considered in current discussions and research. The present paper applies a novel hierarchical cluster algorithm that clusters locational marginal prices and weights nodes depending on their demand- and supply situation to identify possible new price zone configurations. The algorithm is applied in a scenario analysis of six scenarios reflecting main drivers that influence the future development of European Electricity markets in line with the trilemma of energy policy targets. Robustness of the new configuration is an important criterion for price zone configurations according to the European Guideline on Capacity Allocation and Congestion Management (CACM). Therefore, a robust price zone configuration is computed taking into account all the six individual scenarios. Results show that shape, size and price variations of price zones on the one hand strongly depend on the individual scenario. On the other hand, the identified robust configuration is shown to outperform other configurations, particularly also the current price zone configuration in CWE.
    Keywords: Cluster Analysis, Electricity Market Design, Nodal Pricing, Congestion Management, Energy Markets and Regulation; Bidding zones, Price Zone Configuration, Bidding Zone Configuration
    JEL: C38 C61 D47 L51 Q41 Q48
    Date: 2017–06
  25. By: Laura Rondi (Politecnico di Torino); Paola Valbonesi (University of Padova)
    Abstract: This paper studies the impact of qualification rules for entry into public procurement auctions on firm bids and contract execution, contributing to the debate about which regulations foster the efficient participation of small and medium enterprises (SMEs). Using rich and detailed microdata on all public work contracts awarded by the regional government of Valle d’Aosta from 2000 to 2008, we investigate the differences between pre-award outsourcing by temporary partnerships (TPs) and post-award outsourcing by firms in optional or mandatory subcontracting. We find that both outsourcing status and firm size affect bids and the probability of time and cost overruns. TPs bid lower prices than mandatory and large optional firms and perform well in contract execution, similar to small optional firms. Mandatory firms are more likely to exceed expected cost and are no better in timely delivery. The evidence holds when we disentangle horizontal and vertical subcontracting. Our results highlight the TPs’ advantage of freedom in choosing economic size and technical boundaries before entering the auction.
    Keywords: Public procurement, Regulation on entry, Vertical and horizontal subcontracting/outsourcing, SMEs, Temporary consortium, Supply chain.
    JEL: H57 L23 L24 D44
    Date: 2017–06
  26. By: Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw); Jakub Mazurek (Group for Research in Applied Economics (GRAPE))
    Abstract: We provide an overview of gender board diversity in Europe, using an exceptional database of over 100 million firms over the period of two decades and a novel gender assignment. We show that women on supervisory boards reduce the likelihood that a woman is on a management board. In fact, as much as 90% of European corporations have no women on supervisory boards, whereas roughly 80% of them has no women on management boards. We also show that more gender equality at a country level is not conducive to greater gender board diversity.
    Keywords: glass ceiling, gender board diversity
    JEL: J7 P5
    Date: 2017
  27. By: Hanousek, Jan; Kocenda, Evzen; Vozarova, Pavla
    Abstract: We analyze the impact of multinational enterprises (MNEs), via their foreign direct investment (FDI), on domestic firms in 30 European host economies, from 2001 to 2013. We incorporate international industrial and trade linkages into a standard theoretical framework and test them empirically on a unique dataset compiled from the Amadeus, Eurostat, UN Comtrade and BACI data sources. While controlling for horizontal, vertical, and export channels at the upstream and downstream levels, we show that the presence of MNEs significantly affects domestic firms, in terms of both changing the market structure and improving productivity. The impact is not always positive, as domestic firms are often crowded-out. However, those firms that withstand such double competition receive additional benefits stemming from trade (export) spillovers. In our complex model, we did not find significant (positive) interactions of domestic firms with horizontal MNEs which would suggest desirable productivity spillovers.
    Keywords: European firms; foreign direct investment (FDI); International Trade; multinational enterprise (MNE); Spillovers
    JEL: C33 F15 F21 F23 O24
    Date: 2017–06
  28. By: Michele Capriati (Università degli Studi di Bari Aldo Moro); Marialuisa Divella (Università degli Studi di Bari Aldo Moro)
    Abstract: This paper analyses the way in which innovation and absorptive capacity affect the productivity of Italian provinces. It builds on the Neo-Schumpeterian literature which investigates how technology gaps explain development disparities between countries and regions. The study is carried out at the provincial level, which allows a more fine-tuned analysis of the resource endowment linked to knowledge generation and economic performance. Moreover, it distinguishes between two very different types of innovation: those directly dependent on R&D and new knowledge generation which are generally measured by the number of patents; and those relying on the adaptation of processes, products and materials and thus mostly based on the exploitation of already existing knowledge, which are here measured by a new index based on registered utility models and industrial designs. Main results indicate a case of divergence in productivity levels instead of one of catching up among the Italian provinces; moreover, they suggest that the main effort to get productivity gains in this country has been carried out through a reduction of employment and of its related costs instead of via increasing R&D and human capital.
    Keywords: innovation, patents, utility models, industrial designs, provinces, proximity
    Date: 2017
  29. By: Fane Groes; Daniela Iorio; Man Yee (Mallory) Leung; Raül Santaeulàlia-Llopis
    Abstract: Using administrative data from Denmark (1995-2009) we find that maternal education significantly determines IVF success (live birth). Compared with high school dropouts, patients with a college (high school) degree have a 24% (16%) higher chance of attaining a live birth through IVF. Our explorations of the mechanisms underlying the education gradient rule out financial considerations, clinic characteristics, and medical conditions. Instead, we argue that the education gradient in IVF reflects educational disparities in the adoption of the IVF technology. These results are important because women’s career and fertility choices are likely to be influenced by the determinants of IVF success.
    Date: 2017–05

This nep-eur issue is ©2017 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.