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on Microeconomic European Issues |
| By: | Bernard, Josef; Refisch, Martin; Grzelak, Anna; Bański, Jerzy; Deppisch, Larissa; Konopski, Michał; Kostelecký, Tomáš; Kowalski, Mariusz; Klärner, Andreas |
| Abstract: | Recently, the notion of left-behind places and regions has gained ground in academic debates on regional inequality and changing electoral landscapes. This paper proposes an approach to conceptualising and measuring regional "left-behindness" in three Central Eastern European countries that goes beyond a dichotomous division of regions into "left-behind" versus "not left-behind". It understands left-behindness as a multi-dimensional continuum, representing regional disparities in living standards and socio-economic opportunities. Our understanding of left-behind plades is based to a large extent on the current economic conditions of the regions and their dynamics, but goes beyond them to include a wider range of socially relevant aspects of the living conditions, including educational attainment, poverty, and the attractiveness of places to live. The paper proposes an approach to measuring regional left-behindness and explores how it explains voting patterns. Thus, the paper is motivated by the seminal arguments of the 'geography of discontent' debate. Its proponents have argued that rising support for populist, right-wing nationalist-conservative and antisystem parties is often closely linked to spatial patterns of regional inequality. This argument has been repeatedly tested in Western European countries, but has remained under-researched in Central Eastern Europe. Using our approach, we were able to confirm the validity of the "geography of discontent" as a central thesis for all three countries studied. The novelty and added value of this study is that it extends the understanding of left-behindness and voting. Our multidimensional approach to left-behindness allows for a comprehensive interpretation of spatial patterns of populist voting in Central Eastern Europe. The relationship between regional left-behindness and voting behaviour varies in strength across different countries. In Czechia, there are strong associations for the parties ANO and SPD, but not for the KSéCM. In eastern Germany, the association between leftbehindness and support for the AfD is weaker, as is the case in Poland for the PiS. Another contribution of the multidimensional concept of left-behindness is the finding that different dimensions of left-behindness have different electoral effects. There appears to be a systematic influence of economic prosperity and relative expansion, which primarily capturesthe contrast between metropolitan areas and their hinterlands on the one hand, versus the rest of the country on the other-not only in terms of economic prosperity and relative expansion, but also in terms of a significant social status hierarchy. Poverty, however, shows a less stable relationship. |
| Abstract: | Der Begriff der "abgehängten" Orte und Regionen hat in akademischen Debatten über regionale Disparitäten und sich verändernde Wahllandschaften an Bedeutung gewonnen. Dieses Paper schlägt einen Ansatz zur Konzeptualisierung und Messung regionaler Disparitäten in drei mittel- und osteuropäischen Ländern vor, der über eine dichotomische Unterteilung der Regionen in "abgehängt" versus "nicht abgehängt" hinausgeht. "Abgehängtheit" wird als ein mehrdimensionales Kontinuum verstanden, das regionale Disparitäten in Bezug auf Lebensstandards und sozioökonomische Chancen darstellt. Unser Verständnis von "abgehängten" Regionen basiert weitgehend auf den aktuellen wirtschaftlichen Bedingungen der Regionen und deren Dynamik, geht jedoch darüber hinaus und schließt ein breites Spektrum sozial relevanter Aspekte der Lebensbedingungen ein, einschließlich Bildungsniveau und Armut. Das Paper schlägt einen neuen Ansatz zur Messung regionaler Disparitäten vor und untersucht, wie diese Wahlverhalten erklären. Das Paper nimmt Bezug auf die grundlegenden Argumente der Debatte über die "Geographie der Unzufriedenheit". Darin wird argumentiert, dass die zunehmende Unterstützung für populistische, rechtspopulistische national-konservative und Anti-System-Parteien oft eng mit räumlichen Mustern regionaler Disparitäten verbunden ist. Diese These wurde wiederholt in westeuropäischen Ländern getestet, jedoch in Mittel- und Osteuropa noch unzureichend untersucht. Mit unseren Analysen können wir die Gültigkeit der Annahmen der "Geographie der Unzufriedenheit"für alle drei untersuchten Länder im Grundsatz bestätigen. Die Neuheit und der Mehrwert dieses Papers bestehen darin, dass darin das Verständnis von regionalen Disparitäten und Wahlverhalten erweitert wird. Unser multidimensionaler Ansatz zur Messung regionaler Disparitäten ermöglicht eine umfassende Interpretation räumlicher Muster populistischen Wahlverhaltens in Mittel- und Osteuropa. Die Beziehung zwischen regionalem "Abgehängtsein" und Wahlverhalten variiert in ihrer Stärke zwischen den verschiedenen Ländern. In Tschechien bestehen starke Assoziationen zu den Parteien ANO und SPD, jedoch nicht zur KSéCM. In Ostdeutschland ist der Zusammenhang zwischen "Abgehängtsein" und Unterstützung für die AfD schwächer, ebenso wie in Polen für die PiS. Ein weiterer Beitrag des multidimensionalen Konzepts des "Abgehängtseins" ist die Erkenntnis, dass verschiedene Dimensionen unterschiedliche Wahleffekte haben. Es scheint einen systematischen Einfluss von wirtschaftlichem Wohlstand und regionalem Wachstum zu geben, der sich vor allem in Unterschieden zwischen städtischen Gebieten und deren ländlichem Umland einerseits und dem Rest des Landes andererseits zeigt. Der Zusammenhang zwischen Armut und sozialer Exklusion auf der einen Seite und dem Wahlverhalten auf der anderen Seite ist jedoch weniger stabil. |
| Keywords: | Geographie der Unzufriedenheit, politische Geographie, abgehängte Regionen, regionale Disparitäten, Wahlgeographie, Deutschland, Tschechien, Polen, Europäische Union, geography of discontent, political geography, left-behind places, regional disparities, electoral geography, Germany, Czechia, Poland, European Union |
| JEL: | D72 O18 O57 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:jhtiwp:312565 |
| By: | Jeremias Nieminen; Sanni Kiviholma; Ohto Kanninen; Hannu Karhunen |
| Abstract: | We study the effects of lifting labor market testing (LMT) requirements for non-EU workers in Finland utilizing regional variation in occupations exempted from labor market testing. We use individual and firm-level administrative data from 2011–2020 and hand-collected data on local changes in labor market testing rules since 2012. We estimate the effects using a staggered difference-in-differences design. We find that lifting the LMT requirement leads to an increase in the inflow of non-EU workers to treated occupation-regions. A further breakdown of this inflow shows that the effect is mainly driven by non-EU individuals already in Finland. In five years, treatment effect on the annual earnings of natives is -€647 (around 2%) at the occupation-region level and -€1, 121 (around 4%) at the individual level. The observed earnings effects, especially at the occupation-region level, are driven by low-wage and service-oriented occupations. Despite the negative effects on earnings, we observe positive employment effects for some incumbent worker groups at the individual level. Conversely, at the occupation-region level, there is an increase in the number of job seekers in the exempted occupations. At the firm level, we observe an increase in the number of non-EU employees and suggestive evidence of firms expanding in general. |
| Keywords: | labor market testing, immigration, labor supply, wages, shortage list |
| JEL: | J20 J38 J61 J68 |
| Date: | 2024–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:344 |
| By: | Buchner, Martin; Rehm, Miriam |
| Abstract: | This paper aims to understand the health effects of energy poverty in Germany using SOEP panel data from 2010 to 2020. Linear probability models and fixed effects ordered logit models reveal a consistently negative relationship of three expenditures based energy poverty indicators with general health. The association is stronger for the subjective energy poverty metric: members of households unable to keep the home comfortably warm due to financial reasons have an about 3.23 p.p. lower probability of being in at least satisfactory health. Investigating potential channels shows that mental health is consistently negatively linked to our energy poverty metrics, while physical health is weakly associated with energy poverty in Germany, with the exception of doctor visits. Finally, by instrumenting energy poverty with data on energy price indices and matching energy costs to the heating systems used by households, we show that living in a household that experiences a transition to energy poverty due to rising energy prices is also linked to a lower likelihood of being in good health. |
| Abstract: | Dieses Papier untersucht die gesundheitlichen Auswirkungen von Energiearmut in Deutschland auf Basis von Paneldaten des Sozio-oekonomischen Panels (SOEP) für den Zeitraum 2010 bis 2020. Unter Anwendung von Linear-Probability-Modellen sowie Fixed-Effects-Ordered-Logit-Modellen zeigt sich ein robuster negativer Zusammenhang zwischen drei objektiven Indikatoren für Energiearmut und dem allgemeinen Gesundheitszustand. Besonders stark ausgeprägt ist dieser Zusammenhang bei einem subjektiven Indikator: Personen aus Haushalten, die ihre Wohnung aus finanziellen Gründen nicht angemessen warmhalten können, haben eine um 3, 23 Prozentpunkte geringere Wahrscheinlichkeit, sich in (mindestens) zufriedenstellendem Gesundheitszustand zu befinden. Eine weiterführende Analyse möglicher Wirkungsmechanismen deutet darauf hin, dass insbesondere die psychische Gesundheit negativ mit Energiearmut assoziiert ist, während sich für die körperliche Gesundheit nur schwache negative Zusammenhänge zeigen. |
| Keywords: | Energy poverty, health, fixed effects ordered logit models, Germany |
| JEL: | I10 I32 Q41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:315487 |
| By: | Marion Leroutier; Hélène Ollivier |
| Abstract: | This paper shows that even moderate air pollution levels, such as those in Europe, harm the economy by reducing firm performance. Using monthly firm-level data from France, we estimate the causal impact of fine particulate matter (PM2.5) on sales and worker absenteeism. Leveraging exogenous pollution shocks from local wind direction changes, we find that a 10 percent increase in monthly PM2.5 exposure reduces firm sales by 0.4 percent on average over the next two months, with sector-specific variation. Simultaneously, sick leave rises by 1 percent. However, this labor supply reduction explains only a small part of the sales decline. Our evidence suggests that air pollution also reduces worker productivity and dampens local demand. Aligning air quality with WHO guidelines would yield economic benefits on par with the costs of regulation or the health benefits from reduced mortality. |
| Keywords: | cost of air pollution, absenteeism, firm performance. |
| JEL: | Q53 H23 I10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11785 |
| By: | Carsten Creutzburg (Chair for Economic Policy, University of Hamburg); Leo M. Doerr (Chair for Economic Policy, University of Hamburg); Wolfgang Maennig (Chair for Economic Policy, University of Hamburg) |
| Abstract: | This is the first study to employ a national full sample dataset for a socioeconomic analysis of the adoption of electric vehicles (EVs). We use the most recent vehicle registration dataset from the Fed-eral Motor Transport Authority of Germany, which includes the entire underlying population of German vehicle owners. Combining web-scraped data covering all vehicles available in the German market with actual registration data allows a unique analysis of the individual decisions to purchase an EV. Our results suggest that financial incentives are the most relevant factor for EV adoption, with a €1, 000 subsidy in-crease boosting EV choice probability by 1.2 percentage points. Given that EVs currently constitute 12% of newly registered private vehicles in Germany, our model calculates that, in the absence of subsidies, this share would be 1.2%. In contrast, a uniform maximum subsidy of €9, 000 from 2011 to 2023 could have increased the adoption rate to 20%. These results underscore the importance of fin ancial incentives in achieving policy targets for EV adoption and suggest that purchase subsidies exhibit increasing marginal returns. |
| Keywords: | Electric vehicles, Vehicle choice, Financial Incentives, Discrete choice |
| JEL: | Q42 R41 H23 C35 |
| Date: | 2025–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:hce:wpaper:081 |
| By: | Julian Tiedtke |
| Abstract: | This paper examines the impact of automation investments on employment dynamics and workforce composition using administrative data from Portugal. I exploit the lumpiness of automation imports in a difference-in-differences event study design. My results show that automation creates jobs in small firms but leads to job losses in larger ones. This pattern holds across a wide range of firm types, industries and types of automation technologies. Most importantly, automation favors low-educated, routine-blue-collar workers in routine-intensive jobs over highly skilled workers like STEM professionals. These findings challenge the view of automation as inherently skill-biased |
| Keywords: | Automation, Employment, Firm heterogeneity, Deskilling |
| Date: | 2025–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/09 |
| By: | Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valentina Tocchioni (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Maria Veronica Dorgali (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Alice Dominici (IMT School for Advances Studies) |
| Abstract: | Research on the effects of parental separation on children’s socioeconomic outcomes is extensive, yet little is known about how family disruptions impact adherence to vaccination schedules. This study addresses this gap by investigating the association between parental separation and children's vaccination coverage, using a unique dataset on Italian parents born between 1954 and 1983. A multinomial logistic regression model is used to assess the relationship between parental separation and adherence to the vaccination schedule, accounting for the child’s age at the time of parental break-up. Our results show that children who experience parental separation are less likely to receive all recommended vaccinations and are more likely to receive only mandatory vaccines or none at all. The negative effect is particularly pronounced for children who were younger at the time of separation. Given the rising incidence of family disruptions, these findings have important policy implications for improving vaccination uptake. |
| Keywords: | parental separation, pediatric vaccination, Italy |
| JEL: | I14 J12 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:fir:econom:wp2025_01 |
| By: | Bernard, Josef; Refisch, Martin; KosteleckAý, Tomáš; Grzelak, Anna; Konopski, Michał; Klärner, Andreas |
| Abstract: | The concept of left-behind places or regions has skyrocketed in recent years and various empirical studies are using the concept to describe (not only) economically lagging regions. Yet, there is still no settled definition and method of measurement of left-behindness in the social sciences. In the methodological part this working paper presents a plausible conceptualisation and operationalisation of left-behind regions in European Union countries. The operationalization of "left-behindness" is guided by several principles: it is relative to national standards, multidimensional, and both structural and dynamic. Labour market regions are identified as the appropriate spatial unit for analysis. The study uses NUTS3 regions, aggregated for metropolitan areas and adjacent regions, excluding extraterritorial and small countries. A total of 918 regions across 25 countries are analysed using indicators related to economic viability, social structure, and population development from 1993 to 2021. Our empirical analysis highlights how the nature of "left-behindness" varies across Europe, with a particular focus on Central and Eastern Europe. In these regions, left-behindness is closely tied to regional disadvantages, characterized by low economic prosperity, reduced social status, and higher poverty rates. These areas often experience stagnation or shrinkage, with non-metropolitan regions being particularly affected, possibly due to poorer infrastructure. In other parts of Europe, the different dimensions of left-behindness are less coherently associated and do not form clear spatial patterns. In particular, poverty is spatially decoupled from low economic prosperity in many countries. Overall, we identified macro-regional differences of left-behindness manifestation across Europe, shaped by historical, economic, and social factors unique to each region. |
| Abstract: | Das Konzept der "abgehängten" Orte oder Regionen hat in den vergangenen Jahren stark an Bedeutung gewonnen, und verschiedene empirische Studien verwenden das Konzept, um (nicht nur) wirtschaftlich rückständige Regionen zu beschreiben. Dennoch gibt es in den Sozialwissenschaften bislang keine einheitliche Definition und Methode zur Messung von "Abgehängtsein". Im methodischen Teil dieses Thünen Working Papers wird eine neue Konzeptualisierung und Operationalisierung von "abgehängten" Regionen vorgestellt. Die Operationalisierung von "Abgehängtsein" orientiert sich an mehreren Prinzipien: Sie ist relativ zu nationalen Standards, multidimensional und sowohl strukturell als auch dynamisch. Arbeitsmarktregionen werden als geeignete räumliche Einheit für die Analyse festgelegt. Die Studie verwendet dafür NUTS3-Regionen und aggregiert dabei Großstadtregionen und angrenzende Regionen. Insgesamt 918 Regionen in 25 Ländern werden anhand von Indikatoren für die wirtschaftliche Lebensfähigkeit, die Sozialstruktur und die Bevölkerungsentwicklung von 1993 bis 2021 analysiert. Unsere empirische Analyse zeigt, wie "Abgehängtsein" in Europa variiert, wobei der Schwerpunkt auf Mittel- und Osteuropa liegt. In diesen Regionen ist "Abgehängtsein" eng mit regionalen Benachteiligungen verbunden, die durch geringen wirtschaftlichen Wohlstand und höhere Armutsraten gekennzeichnet sind. Diese Gebiete sind häufig von Stagnation oder Schrumpfung betroffen, wobei die nicht-metropolitanen Regionen besonders betroffen sind, was möglicherweise auf eine schlechtere Infrastruktur zurückzuführen ist. In anderen Teilen Europas sind die verschiedenen Dimensionen des "Abgehängtseins" weniger kohärent miteinander verbunden und bilden keine klaren räumlichen Muster. Insbesondere Armut ist in vielen Ländern räumlich von einem geringen wirtschaftlichen Wohlstand entkoppelt. Insgesamt haben wir für Europa regionale Unterschiede in der Ausprägung des "Abgehängtseins" festgestellt, die durch historische, wirtschaftliche und soziale Faktoren geprägt sind und für jede Region einzigartig sind. |
| Keywords: | left-behind regions, European Union, abgehängte Regionen, Europäische Union |
| JEL: | F63 O18 R11 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:jhtiwp:312563 |
| By: | Hamza, Sakar Hasan; Li, Qingna; Khezri, Mohsen |
| Abstract: | Despite the significance of economic freedom in tourism dynamics, especially from a spatial standpoint, its nuanced influence remains unexplored mainly in current research. To fill this gap, our study introduces a novel spatial panel data analysis to investigate how various components of the economic freedom index affect tourist arrivals in 41 European countries from 2005 to 2018. By employing this innovative approach, we uncover the complex interdependencies between economic freedom and tourism and highlight the significance of regional economic characteristics on the tourism sector’s health. Our findings reveal that a one percent increase in GDP per capita of neighboring nations corresponds to a 0.4 percent increase in tourist arrivals to the home country. In comparison, a similar rise in neighboring countries’ prices leads to a 0.4 percent decrease in inbound tourists. Most economic freedom variables, including the Business Freedom Index, Investment Freedom Index, Labor Freedom Index, Trade Freedom Index, and Government Integrity Index, demonstrate statistically significant positive effects. However, a one percent increase in the Monetary Freedom Index of neighboring countries results in a 0.747 percent reduction in homebound tourists. Notably, enhancements in the country’s and neighboring countries’ Investment Freedom Index and Government Integrity Index contribute to increased arrivals. This research contributes to the broader understanding of economic policies’ impact on tourism, offering valuable insights for policymakers aiming to leverage economic freedom for tourism development. The application of a spatial panel data approach marks a significant methodological advancement in tourism studies, opening new avenues for analyzing economic influences on tourism at a regional level. |
| JEL: | J1 |
| Date: | 2025–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127786 |
| By: | Frondel, Manuel; Helmers, Viola; Sommer, Stephan |
| Abstract: | Although there is ample empirical evidence that congestion charges can effectively reduce traffic congestion and its detrimental effects, this instrument has only been implemented in a handful European cities. On the basis of a randomized information experiment that was embedded in a survey across seven European countries, this paper empirically investigates whether information on their (i) effectiveness and (ii) a-posteriori acceptance may increase the public support for congestion charges. Relative to the control group, the results indicate that, on average, this information can raise acceptance by 9.3% and 7.1%, respectively. Moreover, while there is substantial heterogeneity in the acceptance across countries, attributing a concrete price level to the charge uniformly raises acceptance at low charge levels, but lowers it at high levels. Based on these results, we conclude that information campaigns on congestion charges and their benefits for commuters and city-dwellers are essential for fostering public support for this rarely employed transport policy instrument. |
| Abstract: | Trotz zahlreicher Studien die belegen, dass eine Städtemaut die urbane Verkehrsüberlastung und ihre negativen Auswirkungen wirksam verringern kann, wurde dieses Instrument bisher nur in einer Handvoll europäischer Städte eingeführt. Auf Grundlage eines randomisierten Informationsexperiments, das in eine Umfrage in sieben europäischen Ländern eingebettet war, wird in dieser Studie empirisch untersucht, ob Informationen (i) über die Wirksamkeit und (ii) über a-posteriori Akzeptanz von bereits eingeführten Städtemauten die Unterstützung für eine solche Maßnahme beeinflussen können. Die Ergebnisse zeigen, dass die gegebenen Informationen die Akzeptanz unter den Befragten im Durchschnitt um 9, 3 % bzw. 7, 1 % erhöhen. Darüber hinaus ist die Akzeptanz in den einzelnen Ländern zwar unterschiedlich, aber die Zuweisung eines konkreten Preisniveaus für die Gebühr erhöht die Akzeptanz in allen Ländern bei niedrigen Gebühren und senkt sie bei hohen Gebühren. Auf der Grundlage dieser Ergebnisse kommen wir zu dem Schluss, dass Informationskampagnen über Staugebühren und ihre Vorteile für Pendler und Stadtbewohner wesentlich sind, um die öffentliche Unterstützung für dieses selten eingesetzte aber effektive verkehrspolitische Instrument zu fördern. |
| Keywords: | Acceptability, congestion charge, public support, road pricing |
| JEL: | R48 C25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:315484 |
| By: | Sydnee Caldwell (University of California-Berkeley and NBER); Ingrid Haegele (LMU and IAB); J?rg Heining (IAB) |
| Abstract: | We use novel surveys of firms and workers, linked to administrative employer-employee data, to study the prevalence and importance of individual bargaining in wage determination. We show that simple survey questions accurately elicit firms’ bargaining strategies. Using the elicited strategies for 772 German firms, we document that the majority of firms are willing to engage in individual wage bargaining. Labor market factors predict firms’ strategies better than firm characteristics. Survey responses from nearly 10, 000 full-time workers indicate that most worker-firm interactions begin with the worker rejecting the offer and remaining at the incumbent firm. There is substantial heterogeneity in workers’ bargaining behavior, which translates into within-firm wage inequality. Firms that set pay via individual bargaining have a 3 percentage point higher gender wage gap. |
| Keywords: | wage bargaining, employer-employee, Germany, wage inequality, gender wage gap |
| JEL: | D83 J31 J41 J53 L21 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:25-413 |
| By: | Lochner, Benjamin; Merkl, Christian |
| Abstract: | This paper examines how gender-specific application behaviour, firms' hiring practices, and flexibility demands relate to the gender earnings gap, using linked data from the German Job Vacancy Survey and administrative records. Women are less likely than men to apply to high-wage firms with high flexibility requirements, although their hiring chances are similar when they do. We show that compensating differentials for firms' flexibility demands help explain the residual gender earnings gap. Among women, mothers experience the largest earnings penalties relative to men in jobs with high flexibility requirements. |
| Keywords: | Job Search, Application Behaviour, Gender Earnings Gap |
| JEL: | E24 J16 J31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1600 |
| By: | Konstantins Benkovskis (Latvijas Banka); Styliani Christodoulopoulou (European Central Bank); Olegs Tkacevs (Latvijas Banka) |
| Abstract: | This study examines the adoption of digital technologies by Latvian firms, focusing on the factors influencing adoption decisions and the impact of these technologies on firm performance. Using firm-level responses to the digitalisation survey, the paper covers four technologies: broadband internet, webpages, web sales, and EDI sales. The results suggest that larger firms, exporters, and those employing ICT specialists along with a higher-skilled workforce, are more inlined to adopt digital technologies. The provision of relevant training programmes for both ICT and non-ICT staff is essential for fostering technology adoption, particularly for more complex systems like web sales. To assess the impact of digitalisation on firm performance, the study employs a difference- in-differences approach, finding that webpage adoption positively affects turnover and employment, particularly in the manufacturing sector. EDI sales also enhance firm performance, boosting turnover and employment. The study emphasises the need for complementary investments in workforce skills, ICT training, and organisational re-structuring to fully realise the benefits of digital transformation. |
| Keywords: | digital technologies, e-commerce, firm performance |
| JEL: | D22 O14 O33 L25 J23 J24 F14 |
| Date: | 2025–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:ltv:dpaper:202501 |
| By: | Lubica Stiblarova (Faculty of Economics, Technical University of Kosice, Slovak Republic); Anna Tykhonenko (Université Côte d'Azur, CNRS, GREDEG, SKEMA Business School, France) |
| Abstract: | his paper explores the intricate relationship between human capital and foreign direct investment (FDI) across 28 European countries from 2003 to 2022. To address this relationship's complex and often ambiguous nature, a Bayesian shrinkage estimator is utilized to capture significant heterogeneity across different regions. The results indicate that the discouraging role of human capital in FDI is most pronounced in the "Eastern bloc, " where cost-effectiveness serves as the primary driver of investment. In contrast, efficiency-seeking motives prevail in Western Europe, where higher levels of human capital contribute to increased FDI. Sectoral analysis further reveals that the critical transition for attracting FDI occurs not between the secondary and tertiary sectors, as traditionally believed, but between the tertiary and quaternary sectors. In these advanced sectors, quaternary FDI leverages innovation potential through high-skilled labor, underscoring the critical importance of human capital. These findings highlight the nuanced and region-specific dynamics of FDI, emphasizing the need for tailored policies to maximize the benefits of human capital in attracting foreign investment. |
| Keywords: | Human capital, foreign direct investment, regional heterogeneity, multi-speed Europe, Bayesian shrinkage estimator |
| JEL: | C11 F21 I25 O14 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-11 |