nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒08‒20
24 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Effects of Universal Public Childcare Provision on Cases of Child Neglect and Abuse By Malte Sandner; Stephan L. Thomsen
  2. Addressing the innovation gap: Lessons from the Stairway to Excellence (S2E) project By Nida Kamil Ozbolat; Nicholas Harrap
  3. Ageing labour: How does demographic change affect regional human capital? By Paula Prenzel; Simona Iammarino
  4. Infant Health Care and Long-Term By Butikofer, Aline; Loken, Katrine; Salvanes, Kjell G
  5. Resource misallocation in European firms: The role of constraints, firm characteristics and managerial decisions By Gorodnichenko, Yuriy; Revoltella, Debora; Švejnar, Jan; Weiss, Christoph T.
  6. Bank Bonus Pay as a Risk Sharing Contract By Efing, Matthias; Hau, Harald; Kampkötter, Patrick; Rochet, Jean-Charles
  7. Will you marry me? It depends (on the business cycle) By Bellido, Héctor; Marcén, Miriam
  8. Labor Market and Distributional Effects of an Increase in the Retirement Age By Geyer, Johannes; Haan, Peter; Hammerschmid, Anna; Peters, Michael
  9. The corporate equity puzzle By Brutscher, Philipp-Bastian; Hols, Christopher
  10. Knocking on parents’ doors: regulation and intergenerational mobility By Sauro Mocetti; Giacomo Roma; Enrico Rubolino
  11. The Well-being of the Overemployed and the Underemployed and the Rise in Depression in the UK By David N.F. Bell; David G. Blanchflower
  12. The impact of mental problems on mortality and how it is moderated by education By Bijwaard, G.E.;; Tynelius, P.;
  13. Should There Be Lower Taxes on Patent Income? By Fabian Gaessler; Bronwyn H. Hall; Dietmar Harhoff
  14. How EU Markets Became More Competitive Than US Markets: A Study of Institutional Drift By Germán Gutiérrez; Thomas Philippon
  15. International trade in services: Evidence for Portuguese firms By Birgitte Ringstad; João Amador; Sónia Cabral
  16. Every cloud has a silver lining: micro-level evidence on the cleansing effects of the portuguese financial crisis By Daniel A. Dias; Carlos Robalo Marques
  17. Benchmark selection and performance By Dirk Broeders; Leo de Haan
  18. Fostering place-based innovation and internationalization – the new turn in German technology policy By Dohse, Dirk; Fornahl, Dirk; Vehrke, Julian
  19. The impact of firm performance on the business transfer mode By Kay, Rosemarie; Pahnke, André; Schlepphorst, Susanne
  20. Voting turnout in Greece: expressive or instrumental? By DASKALOPOULOU, EIRINI
  21. Testing a Social Innovation in Financial Aid for Low-Income Students: Experimental Evidence from Italy By Azzolini, Davide; Martini, Alberto; Rettore, Enrico; Romano, Barbara; Schizzerotto, Antonio; Vergolini, Loris
  22. Productivity of Slovenian Firms By Polona Domadenik; Bojan Ivanc; Denis Marinšek
  23. The Relative Skill Demand of Superstar Firms and Aggregate Implications By Akerman, Anders
  24. Exploring the diffusion of low energy houses: An empirical study in the European Union By Olsthoorn, Mark; Schleich, Joachim; Faure, Corinne

  1. By: Malte Sandner (University College London); Stephan L. Thomsen (Leibniz Universität Hannover)
    Abstract: We investigate the impact of childcare provision on cases of child abuse and neglect in Germany between 2002 and 2014. For identification, we exploit a governmental reform introducing mandatory early child care. The implementation at the county level generated large temporal and spatial variation in childcare coverage. Our measure of child abuse and neglect comes from a unique high-quality adminis-trative data set that covers all child protection cases at the German county level. The estimated ITT effect shows a decline by 0.24 cases per 1,000 children if a county increases childcare slots above the median, which is a reduction of 21.4 percent from the mean. This finding is of high economic relevance given the enormous costs of child abuse and neglect for the society. Our results show that the provision of universal public child care can be an effective policy to prevent part of these costs.
    Keywords: child abuse and neglect, early child care, prevention
    JEL: J13 J12 I38
    Date: 2018–08
  2. By: Nida Kamil Ozbolat (European Commission - JRC); Nicholas Harrap (European Commission - JRC)
    Abstract: There is a considerable territorial disparity in terms of research and innovation (R&I) performance within Europe between EU15 and EU13 Member States (MSs) . The two biggest European funds, European Structural and Investment Funds (ESIF) and Horizon 2020 (H2020), aim at supporting the development of European competitiveness, growth, knowledge generation and as well as closing the innovation gap and promoting research excellence across Europe. Smart Specialisation Strategies (S3) play a key role in fostering an efficient and inclusive Research and Innovation (R&I) ecosystem by creating the right framework for focused investments based on selected high value added priorities and a shared vision of territorial development. Also, the European Commission's project Stairway to Excellence (S2E) is focussed on the provision of assistance to EU MSs and Regions with emphasis on promoting R&I excellence and maximising the specific value added of S3 investments such as the capacity building to support for R&I activities and exploitation of research results for raising the overall social/economic impact. This report summarises the main outcomes of the activities undertaken by the S2E team during the initial phase of the project from June 2014 to January 2017). It focuses on the S2E Country Reports – produced by the national independent experts and provided analysis on the optimal use of key European R&I funds – and the Joint Statements of S2E National Events – an outcome of national events covering the issues and main conclusions - as well as the other analytical work of the project. By picking those issues and actions common to more than one country and frequently mentioned, the main bottlenecks and possible policy actions to address these issues are summarised within three dimensions; namely, quality of R&I governance, capacity building, and innovation and commercialisation. This analysis and particularly the policy recommendations offer solutions for these issues that can also contribute to closing the innovation gap in Europe, which is demonstrated by the annual European Innovation Scoreboard comparing the performance of the EU MSs.
    Keywords: Innovation gap, Research Excellence, Innovation, European Funding, Smart Specialisation, ESIF, Horizon 2020, Cohesion Policy, Stairway to Excellence, S2E
    Date: 2018–07
  3. By: Paula Prenzel; Simona Iammarino
    Abstract: Human capital investments are frequently suggested as policy measure to cope with smaller and older labour forces caused by demographic change across Europe. However, the availability and composition of human capital is fundamentally intertwined with demographic structures, especially at a regional level. This paper analyses how ageing is related to the regional composition of human capital for 332 German regions between 1996 and 2010. The findings show that labour force ageing is associated with lower educational attainment, and that older labour forces have higher shares of traditional vocational degrees. On a national level, education expansion still sufficiently compensates for the effects of population ageing, but regional human capital composition shows distinct trends.
    Keywords: demographic change, human capital, regional labour markets, regional development
    JEL: R10 R12 R23 J21 J24
    Date: 2018–08
  4. By: Butikofer, Aline; Loken, Katrine; Salvanes, Kjell G
    Abstract: A growing literature documents the positive long-term effects of policy-induced improvements in early-life health and nutrition. However, there is still scarce evidence on early-life health programs targeting a large share of the population and the role of such programs in increasing intergenerational mobility. This paper uses the rollout of mother and child health care centers in Norway, which commenced in the 1930s, to study the long-term consequences over the whole life cycle of increasing access to well-child visits in the first year of life. These well-child visits included a physical examination and the provision of information about adequate infant nutrition. Our first results show that access to mother and child health care centers in the first year of life increased the completed years of schooling by 0.15 years and earnings by two percent. Our second set of results reveals that these effects were stronger for children from a low socioeconomic background and contribute to a 10 percent reduction in the persistence of educational attainment across generations. Our third set of findings suggest that better nutrition within the first year of life is a likely mechanism. In particular, we find positive effects on adult height and that individuals suffer from fewer health risks at age 40. In addition, we show that access to well-child visits decreased infant mortality from diarrhea whereas infant mortality from pneumonia, tuberculosis, or congenital malformations are not affected. Finally, we investigate the costs of the program and show that investments in mother and child healthcare centers pass a simple cost–benefit analysis.
    Keywords: child health; health care centers; long-term outcomes; nutrition
    JEL: I14 I18 I24
    Date: 2018–07
  5. By: Gorodnichenko, Yuriy; Revoltella, Debora; Švejnar, Jan; Weiss, Christoph T.
    Abstract: Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and countries would raise EU GDP by at least 25 percent. Firm characteristics, such as demographics, quality of inputs, utilization of resources, and dynamic adjustment of inputs, are predictors of the marginal products of capital and labor. We emphasize that some firm characteristics may reflect compensating differentials rather than constraints and the effect of constraints on the dispersion of marginal products may hence be smaller than has been assumed in the literature. We also show that cross-country differences in the dispersion of marginal products are more due to differences in how the business, institutional and policy environment translates firm characteristics into outcomes than to the differences in firm characteristics per se.
    Keywords: Marginal products,resource allocation,firm-specific factors,economic growth
    JEL: O12 O47 O52 D22 D24
    Date: 2018
  6. By: Efing, Matthias; Hau, Harald; Kampkötter, Patrick; Rochet, Jean-Charles
    Abstract: We show that banker bonuses cannot be understood exclusively as incentive contracts, but also incorporate a significant risk sharing dimension between bank shareholders and bank employees. This contrasts with the conventional view whereby diversified shareholders fully insure risk averse employees. However, financial frictions imply that shareholder value is concave in a bank's cash reserves---making shareholders effectively risk averse. The optimal contract between shareholders and employees then involves some degree of risk sharing. Using extensive payroll data on 1.26 million bank employee years in the Austrian, German, and Swiss banking sectors, we show that the structure of bonus pay within and across banks is compatible with an economically significant risk sharing motive, but difficult to rationalize based on incentive theories of bonus pay only.
    Keywords: Bank compensation; risk sharing; bank risk; operating leverage
    JEL: D22 G20 G21
    Date: 2018–06–26
  7. By: Bellido, Héctor; Marcén, Miriam
    Abstract: This paper studies the effect of the business cycle on the marriage rate, using a panel data of 30 European countries covering 1991 to 2013. We find a negative effect of the business cycle on the marriage rate, pointing to the pro-cyclical behaviour of marriage decisions, which holds after controlling for country-level specific characteristics and family law, and after taking possible endogeneity problems into account. We also analyse this issue considering a wide range of country-level regulations affecting couples (taxation, property division, and reproduction, among others). Supplemental analysis reveals gender differences in the impact of the business cycle on the marital decision, depending on the previous legal marital status of the individuals.
    Keywords: Marriage,unemployment,business cycle
    JEL: J12 J64
    Date: 2018
  8. By: Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin); Hammerschmid, Anna (DIW Berlin); Peters, Michael (DIW Berlin)
    Abstract: We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution.
    Keywords: retirement age, pension reform, labor supply, early retirement, distributional effects, spillover effects, household
    JEL: J14 J18 J22 J26 H31
    Date: 2018–06
  9. By: Brutscher, Philipp-Bastian; Hols, Christopher
    Abstract: Why don't non-financial companies in Europe issue more equity? Using experimental data on firms from Europe, this paper analyses how firms trade-off between debt and external equity financing. It finds that firms are willing to pay a substantial premium on debt when presented with an equity participation as an alternative. Companies are willing to pay an interest rate that is about 8.8pp higher than the cost of equity to obtain a loan instead of external equity. This preference for debt can be explained only partially by the more favourable tax treatment of debt, fear of loss of corporate control and positive growth expectations. This paper discusses what else may explain this striking aspect of firm behaviour in the EU.
    Keywords: capital structure choice,debt premium,behavioural finance
    JEL: D22 G31 G32 G34
    Date: 2018
  10. By: Sauro Mocetti (Bank of Italy); Giacomo Roma (Bank of Italy); Enrico Rubolino (University of Essex)
    Abstract: We exploited two major reforms in the regulation of professional services implemented in Italy since the 2000s in order to examine the impact on the intergenerational transmission of occupations. We built an OECD-style indicator of strictness of regulation for 14 occupations and three different cohorts (i.e. before and after each reform). Then, using a difference-in-differences strategy, we exploited the differential effect of regulation on the occupations considered compared with employees in similar occupations, before and after each reform. We found that the progressive liberalization of professional services affected the allocation of individuals across occupations, leading to a substantial decrease in the propensity to follow the same career as one’s parents. The impact of regulation on the likelihood of being employed in the same occupation as one’s parents is greater in soft sciences and in areas where the demand for professional services is higher; at individual level, it is greater for less able individuals.
    Keywords: regulation, intergenerational mobility, occupational choice
    JEL: J62 J44 J24
    Date: 2018–07
  11. By: David N.F. Bell; David G. Blanchflower
    Abstract: In this paper we build on our earlier work on underemployment using data from the UK. In particular, we explore their well-being based on hours preferences rather than on involuntary part-time work used in the prior literature. We make use of five main measures of well-being: happiness; life satisfaction; whether life is worthwhile; anxiety and depression. The underemployed have higher levels of well-being than the unemployed and disabled but lower levels than any other group of workers, full or part-time. The more that actual hours differ from preferred hours the lower is a worker's well-being. This is true for those who say they want more hours (the underemployed) and those who say they want less (the over employed). We find strong evidence of a rise in depression and anxiety (negative affect) in the years since the onset of austerity in 2010 that is not matched by declines in happiness measures (positive affect). The fear of unemployment obtained from monthly surveys from the EU has also been on the rise since 2015. We find evidence of an especially large rise in anxiety and depression among workers in general and the underemployed in particular. The underemployed don't want to be underemployed.
    JEL: I20 I31 J64
    Date: 2018–07
  12. By: Bijwaard, G.E.;; Tynelius, P.;
    Abstract: Mental disorders have a large impact on invalidity and mortality. Poor mental health is associated with low education, which is also associated with poor health and higher mortality. The association between mental health and mortality may, therefore, be partly explained by the increased incidence of mental problems of the low educated. An important issue is that mental health problems, education attainment and mortality may all depend on the same observed and unobserved individual factors. Such confounding renders both the incidence of mental health problems and education endogenous in the mortality analysis. We account for both the selective incidence of mental health problems and selective educational attainment by using a correlated multistate model for the mental health (hospitalization) process (both admittance an discharge) and mortality with a re-weighting technique (inverse propensity weighting) based on the probability to attain higher education. We use Swedish Military Conscription Data (1951-1960), linked to the administrative Swedish death and National Hospital Discharge registers. We observe the timing of admittance and discharge from mental hospitals, the moment and cause of death and the education level. We estimate the effect of mental hospitalization and education on the morality rate and how the effect of mental hospitalization is moderated by education. Our empirical results indicate a strong effect of both mental hospitalization and education on mortality. Mental hospitalization affects mortality due to external causes of death in particular. Only for the low educated improving education moderates the impact of mental hospitalization on mortality. We also found that ignoring confounding would overestimate the impact of mental hospitalization on mortality. Accounting for confounding in mental hospitalization seems to be more important than accounting for selective educational attainment.
    Keywords: Mental health; Education; Mortality; Timing-of-events; Inverse propensity weighting;
    JEL: C41 I14 I24
    Date: 2018–08
  13. By: Fabian Gaessler; Bronwyn H. Hall; Dietmar Harhoff
    Abstract: A “patent box” is a term for the application of a lower corporate tax rate to the income derived from the ownership of patents. This tax subsidy instrument has been introduced in a number of countries since 2000. Using comprehensive data on patent filings at the European Patent Office, including information on ownership transfers pre- and post-grant, we investigate the impact of the introduction of a patent box on international patent transfers, on the choice of ownership location, and on invention in the relevant country. We find that the impact on transfers is small but present, especially when the tax instrument contains a development condition and for high value patents (those most likely to have generated income), but that invention itself is not affected. This calls into question whether the patent box is an effective instrument for encouraging innovation in a country, rather than simply facilitating the shifting of corporate income to low tax jurisdictions.
    JEL: H25 H32 K34 O34
    Date: 2018–07
  14. By: Germán Gutiérrez; Thomas Philippon
    Abstract: Until the 1990's, US markets were more competitive than European markets. Today, European markets have lower concentration, lower excess profits, and lower regulatory barriers to entry. We document this surprising outcome and propose an explanation using a model of political support. Politicians care about consumer welfare but also enjoy retaining control over industrial policy. We show that politicians from different countries who set up a common regulator will make it more independent and more pro-competition than the national ones it replaces. Our comparative analysis of antitrust policy reveals strong support for this and other predictions of the model. European institutions are more independent than their American counterparts, and they enforce pro-competition policies more strongly than any individual country ever did. Countries with ex-ante weak institutions benefit more from the delegation of antitrust enforcement to the EU level. Our model also explains why political and lobbying expenditures have increased much more in America than in Europe, and using data across industries and across countries, we show that these expenditures explain the relative rise of concentration and market power in the US.
    JEL: D02 D41 D42 D43 D72 E25 K21 L0
    Date: 2018–06
  15. By: Birgitte Ringstad; João Amador; Sónia Cabral
    Abstract: This paper describes the main features of Portuguese international trade of non-tourism services, using a new transaction-level database on services trade merged with detailed balance-sheet data. We find that a few two-way traders with diversified service and geographical portfolios account for a substantial share of exports and imports. Compared with one-way traders, two-way traders are larger, older, more productive and more profitable. We also unveil new evidence on the bi-modality of the distributions of export intensity, with density concentrating on both ends of the distribution. Moreover, considering all margins of firms' services trade and controlling for several firm characteristics, the intensive margins of exports and imports of services are positively related to both productivity and profitability. Regarding the extensive margins, the number of different types of services imported by a firm is also positively associated with its performance.
    JEL: F1 F14 L25
    Date: 2018
  16. By: Daniel A. Dias; Carlos Robalo Marques
    Abstract: Using firm level data, we show that the Portuguese financial crisis had, overall, a cleansing effect on productivity. During the crisis, aggregate productivity gains, both in manufacturing and services, came from relatively higher contributions of entry and exit of firms and from reallocation of resources between surviving firms. At the microlevel, we find that the crisis reduced the probability of survival for high and low productivity firms, but hit low productivity firms disproportionately harder, in line with the cleansing hypothesis. The correlation between productivity and employment growth in manufacturing and services strengthened, but the correlation between productivity and capital growth in the service sector weakened. We attribute this result in part to structural sectoral differences, but mainly to the large negative demand and credit shocks that affected mainly the nontradable services sub-sector. We also find that the probability of exit increased disproportionately for firms operating in more financially dependent industries, but there is no evidence of a scarring effect on productivity stemming from changing credit conditions.
    JEL: D24 E32 L25 O47
    Date: 2018
  17. By: Dirk Broeders; Leo de Haan
    Abstract: Using regulatory data that are free of self-reporting bias for 2007-2016, we decompose investment returns of 455 Dutch pension funds according to their key investment decisions, i.e. asset allocation, market timing and security selection. In extension to existing papers, we also assess the impact of benchmark selection, i.e. the pension funds' choice for proprietary benchmarks instead of standard benchmarks. Over time, asset allocation explains 39 percent of the variation of pension funds' returns, whereas benchmark selection, timing and selection explain 11, 9 and 16 percent, respectively. Across pension funds, asset allocation explains on average only 19 percent of the variation in pension fund returns. This is dominated by benchmark selection explaining 33 percent of cross sectional returns. Over time and across pension funds we document that benchmark selection is more important in driving returns than selection and timing.
    Keywords: Pension funds; Asset allocation; Benchmark selection; Investment performance
    JEL: G11 G23
    Date: 2018–08
  18. By: Dohse, Dirk; Fornahl, Dirk; Vehrke, Julian
    Abstract: Since the mid-1990s German technology policy has experienced a paradigmatic shift from standard grant schemes towards a region-oriented and competition-based R&D policy. Currently, a new policy experiment, the InterClust contest, is under way, trying to simultaneously foster place-based innovation, R&D internationalization and the internationalization of innovative places. The current paper analyses the new policy, relating it to the recent literatures on heterogeneous firms and on cluster-life cycles, and presents results from a firm survey performed in 21 winner regions of InterClust. Findings show that the new funding scheme takes insights from recent theoretical developments into account and addresses important impediments to firm and cluster internationalization. Although it is too early for an overall assessment, it is argued that the long-term impact will critically depend on the inflow of heterogeneous knowledge and the strength of intra-regional mobilization effects.
    Keywords: industrial clusters,knowledge spillovers,technology policy
    JEL: O30 R11
    Date: 2018
  19. By: Kay, Rosemarie; Pahnke, André; Schlepphorst, Susanne
    Abstract: This paper analyzes the impact of family firms' past and future economic viability on the incumbents' decision on the business transfer mode. Using the German IAB Establishment Panel and estimating logistic regression models we show that the decision on the business transfer mode rather depends on the expected future performance than on the past one. Moreover, family businesses that are exclusively managed by their owners are more likely to be planning an intra-family succession. However, ambiguity about the future performance overrides the original intention and induces the incumbents to sell the business.
    Keywords: family businesses,business succession,transfer mode,performance
    JEL: L25 L26 M2
    Date: 2018
    Abstract: Voting turnout is a core element of political democracy as it constitutes the so-called hard evidence of citizens’ engagement in the wider political processes. Thus, increasing voting abstention rates in the developed countries and the emergence of abstract types of political and civic engagement raise concerns over the ways in which participation evolves in modern democracies and the underlying socio-political mechanisms and dynamics that govern its development. Within this context, we analyse the micro-level determinants of voting turnout rates in Greece using ESV data for the 2002-2011 period. In particular, we test for the effects of formal and latent political participation, activism and trust as pointing to either an expressive or instrumental voting decision process. After controlling for the individuals’ socio-demographic and economic profile evidence is found of instrumental voting in Greece. Important policy level implications arise as a result of these findings.
    Keywords: voting turnout; political participation; activism; trust; economic crisis; Greece
    JEL: D72 H11
    Date: 2018–07–27
  21. By: Azzolini, Davide (FBK-IRVAPP); Martini, Alberto (University of Piemonte Orientale); Rettore, Enrico (University of Trento); Romano, Barbara (ASVAPP); Schizzerotto, Antonio (IRVAPP); Vergolini, Loris (IRVAPP)
    Abstract: This paper presents the results of a randomized controlled trial aimed at testing the effectiveness of an innovative intervention of asset building (Percorsi) on high school students' transition to the university. Contrary to most traditional forms of financial aid, the tested intervention is expected to enhance an active involvement of the families and imposes a strong conditionality in the use of the benefits. The experiment, called ACHAB (Affording College with the Help of Asset Building) has been carried out in the province of Torino (Northwest Italy) between 2014 and 2017. For the evaluation purpose, an ad hoc survey has been carried out to collect longitudinal information on enrolment decisions and academic performances (number of exams and persistence) during the first semester and at the beginning of the second year. External data and applicant baseline information were used to perform a multidimensional targeting strategy aimed at identifying the 'target population', i.e. those students who were at risk of giving up their university enrolment decisions because of economic reasons. The experimental results point to the existence of positive and significant effects of the program on university enrolment and sizeable and significant positive effects on academic performance and university persistence. The effects of the program are significantly larger for students coming from vocational schools than for students who completed technical or general secondary schools.
    Keywords: higher education, social inequality, financial aid, asset building, randomized controlled trial
    JEL: C90 D04 I22 I24
    Date: 2018–06
  22. By: Polona Domadenik; Bojan Ivanc; Denis Marinšek
    Abstract: We analyse productivity differences across non-financial Slovenian firms over the period 1994-2015. In particular, we investigate the impact of different factors (including size, ownership, investment activity and industry characteristics) on firms' total factor productivity (TFP), competitiveness and internationalisation. Large corporates appear to have the highest level of TFP, more than 50% above the average, and show stronger TFP growth. Exporting firms also show higher TFP growth than other firms, particularly after the recent crisis. Using a complete database of R&D subsidies over 1998-2015, the paper identifies R&Dintensive firms and investigates the impact of R&D investment on productivity and profitability. It is found that subsidies did not significantly increase firm-level productivity, once size, industry and year effects are taken into account. This could be because, during the recession (2009-2015), subsidies were granted to firms in difficulties.
    JEL: D22 D24 L25
    Date: 2018–03
  23. By: Akerman, Anders (Dept. of Economics, Stockholm University)
    Abstract: This paper proposes a new reason for why the relative demand for skilled workers has increased over past decades. I suggest that increases in market concentration and the rise of superstar firms may be important causes for the rise in demand for skill. I use detailed employer-employee data for the Swedish manufacturing sector between 1997 and 2014 to validate my hypothesis. My analysis demonstrates a strong correlation between firm size and the skilled share of a firm’s worker mix. The slope of this relationship is at its steepest in the right tail of the size distribution. I also, as Autor et al. (2017b), find a substantial rise in market concentration in Swedish manufacturing, both in the aggregate and across sub-sectors. The rise in market concentration is strongly correlated with a rise in the relative usage of skilled workers. Furthermore, a majority of the change in skill usage is due to between-firm variation, a reallocation of production across firms. This supports the notion that market concentration, rather than a general skill upgrading across all firms, has caused the rise in skill demand. Finally, the reallocation of production was most pronounced in industries characterized by large increases in market concentration. I estimate that about a tenth of the rise in the usage of skilled labor in Swedish manufacturing is due to the increasing importance of the largest firms.
    Keywords: Relative Skill Demand; Skill Premium; Market Concentration; Superstar Firms
    JEL: D22 D33 D43 J24 J31 L13 L40
    Date: 2018–07–31
  24. By: Olsthoorn, Mark; Schleich, Joachim; Faure, Corinne
    Abstract: Diffusion of low-energy houses is an important part of energy and climate policy in the European Union (EU) and in individual EU countries. Key barriers to the adoption of low-energy houses include additional construction costs and uncertainty surrounding actual energy and cost savings. In this paper, we econometrically analyze determinants of low-energy house adoption, including time and risk preferences. We rely on original data from a large survey conducted among households in eight EU countries. To our knowledge, this is the first empirical study of low-energy building adoption to rely on a demographically representative sample. Our set of covariates includes parameters of time and risk preferences that were elicited via state-of-the-art incen-tivized multiple price list experiments and via self-assessment scales. We find mixed results for the effects of time discounting on low-energy house adoption. Risk preferences do appear to matter: as risk proneness increases, so does the adoption of zero net or energy plus building (but not passive houses). Consistent with the low-cost hypothesis about environmental attitude and action, we find no results for environmental attitudes and social norms.
    Keywords: passive houses,low-energy houses,adoption,buildings,risk,patience
    Date: 2018

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