nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2018‒03‒19
35 papers chosen by
Steve Ross
University of Connecticut

  1. What are the most important factors that influence the changes in London Real Estate Prices? How to quantify them? By Yiyang Gu
  2. Spatial Inequality of Growth between Morocco Regions By SAHIBI, Youness; HAMZAOUI, Moustapha
  3. Aging and House Prices: The Impact of Aging Housing Stock to Housing Market in the Tokyo Metropolitan Area By SHIMIZU, Chihiro; NAKAGAWA, Masayuki
  4. Segregation in Urban Areas: A Literature Review By Demetry, Marcos
  5. The Effect of Zoning on Housing Prices By Ross Kendall; Peter Tulip
  6. Institutions and Innovation: Evidence from Chinese Cities By Chen, Yang; Luan, Fushu; Regis, Paulo José
  7. The spatial sorting of informal dwellers in cities in developing countries: Theory and evidence By Harris Selod; Lara Tobin
  8. The Spatial Diffusion of Knowledge By Kamran Bilir; Christopher Tonetti; Treb Allen
  9. Poor Little Children: The Socio economic Gap in Parental Responses to School Disadvantage By Inés Berniell; Ricardo Estrada
  10. Credit Regimes and the Seeds of Crisis By Nelson Lind
  11. One Money, Many Markets By Giancarlo Corsetti; Joao B. Duarte; Samuel Mann
  12. The Effects of Relative School Starting Age on Educational Outcomes in Finland By Kaila, Martti
  13. Financial Stability as a Public Policy Goal to Increase Local Economic Development: an Empirical Investigation from Italian Labour Market Areas By BARRA, Cristian; ZOTTI, Roberto
  14. "The Development Model of Small-Industry in East Java: A Regional Comparative Study" By Setyo Tri Wahyudi
  15. Social Diversity and Bridging Identity By Maria D. C. Garcia­Alonso; Zaki Wahhaj
  16. Internal Immigrant Mobility in the Early 20th Century: Experimental Evidence from Galveston Immigrants By Aaronson, Daniel; Davis, Jonathan; Schulze, Karl
  17. Social Capital and the Status Externality By Jun-ichi Itaya; Chris Tsoukis
  18. The integration of migrants in OECD regions: A first assessment By Marcos Diaz Ramirez; Thomas Liebig; Cécile Thoreau; Paolo Veneri
  19. Explaining the structure of collaboration networks: from firm-level strategies to global network structure By Johannes van der Pol
  20. Valuing Owner-Occupied Housing: an empirical exercise using the American Community Survey (ACS) Housing files By Bettina H. Aten
  21. Inactivity vs. Youth Employment, at regional level A Case Study: ROMANIA By Antonescu, Daniela; Chisăgiu, Livia
  22. User Integration in New Product Development: Field Insights By Teodora Marinova
  23. The banking systems of Germany, the UK and Spain form a spatial perspective: Lessons learned and what is to be done? By Flögel, Franz; Gärtner, Stefan
  24. Buses, Houses or Cash? Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires By Paolo Avner; Shomik Raj Mehndiratta; Vincent Viguie; Stéphane Hallegatte
  25. Stress Tests and Small Business Lending By Cortes, Kristle Romero; Demyanyk, Yuliya; Li, Lei; Loutskina, Elena; Strahan, Philip E.
  26. ‘Everyone in School’: The Effects of Compulsory Schooling Age on Drop-out and Completion Rates By Erica Raimondi; Loris Vergolini
  27. Regional prices in early twentieth-century Spain: A country-product-dummy approach By Alicia Gómez-Tello; Alfonso Díez-Minguela; Julio Martínez-Galarraga; Daniel A. Tirado-Fabregat
  28. Municipal socialism or municipal capitalism? The performance of local public enterprises in Italy By Nicola Curci; Domenico Depalo; Emilio Vadalà
  29. When does money stick in education? Evidence from a kinked grant rule By Saastamoinen, Antti; Kortelainen, Mika
  30. Decent work inter-regional SAM modelling with employment satellite extension including regional infrastructure scenarios case study 2005 IRSAM By Alarcón-Rivero, Jorge V.; Ernst, Christoph
  31. Appointed Public Officials and Local Favoritism: Evidence from the German States By Thushyanthan Baskaran; Mariana Lopes da Fonseca
  32. European Funds and Firm Dynamics: Estimating Spillovers from Increased Access By João Pereira dos Santos; José Tavares
  33. Credit Conditions and the Effects of Economic Shocks: Amplifications and Asymmetries By Carriero, Andrea; Galvao, Ana Beatriz; Marcellino, Massimiliano
  35. Gender, competitiveness and study choices in high school - evidence from Switzerland By Thomas Buser; Noemi Peter; Stefan C. Wolter

  1. By: Yiyang Gu
    Abstract: In recent years, real estate industry has captured government and public attention around the world. The factors influencing the prices of real estate are diversified and complex. However, due to the limitations and one-sidedness of their respective views, they did not provide enough theoretical basis for the fluctuation of house price and its influential factors. The purpose of this paper is to build a housing price model to make the scientific and objective analysis of London's real estate market trends from the year 1996 to 2016 and proposes some countermeasures to reasonably control house prices. Specifically, the paper analyzes eight factors which affect the house prices from two aspects: housing supply and demand and find out the factor which is of vital importance to the increase of housing price per square meter. The problem of a high level of multicollinearity between them is solved by using principal components analysis.
    Date: 2018–02
  2. By: SAHIBI, Youness; HAMZAOUI, Moustapha
    Abstract: Although significant progress had been made in Morocco, the inter-regional inequalities persist. The aim of this paper is to analyse this spatial inequality and convergence phenomenon in Morocco, using regional data between 2000 and 2007. Thus, relying on methods of spatial data analysis and taken from theoretical and empirical contributions, this paper analyses the role of the sectorial externalities and spatial spillovers in growth. Next, we tested the existence of a convergence process and the conditions for its improvement. The results showed the existence of a growth convergence process in value added and productivity but not in employment. On the other hand, the variables of human capital and infrastructure can significantly reduce regional inequality. Thus, we conclude that the conventional policies based solely on the infrastructure development or education are not sufficient. A more comprehensive approach that integrates these two axes and encourages business development and knowledge transfer is needed.
    Keywords: Spatial Inequality, Growth, Morocco, Convergence
    JEL: J18 R11 R12
    Date: 2017
  3. By: SHIMIZU, Chihiro; NAKAGAWA, Masayuki
    Abstract: Based on an analysis of the housing market, this paper focuses on external diseconomies of aging condominiums. It is possible that the quality of condominium stock deteriorates over time more rapidly than does that of ordinary housing. This deterioration in quality leads to a reduction in the quality of housing services received by residents and, further, this worsening of the residential environment may lead to external diseconomies. We run hedonic models to identify the external diseconomies of aging condominiums on the residential market. The results of our estimated models indicate that such external diseconomies for detached housing occur in areas where detached houses and condominiums coexist, and these exert a downward pressure on prices. Detached housing prices are lowered by around 3.2% for each 1% increase in the proportion of the total building floor area in neighborhoods in which condominiums were built before 1990. In other words, we can state that aging condominiums begin to generate diseconomies in their vicinities around 20 years after they were built.
    Keywords: Aging condominium, External diseconomies, Hedonic approach, Depreciation
    JEL: E31 R21 R31
    Date: 2018–02
  4. By: Demetry, Marcos (The Ratio Institute)
    Abstract: This literature review outlines research on how individual preferences can lead to segregation, even in the absence of discriminatory policy and other constraints. From Schelling’s (1971) Spatial Proximity model comes the theoretical conclusion that moderate preferences for own-group neighbors (e.g. immigrants or natives) may lead to complete segregation between the two groups over time. Schelling’s Bounded Neighborhood model provides the theoretical conclusion that the stable equilibrium reached (e.g. an ‘all immigrant’ or ‘all native’ neighborhood) ultimately depends on the initial distribution of agents and their relative speeds of movement. This is because in the unstable, integrated, equilibrium an apparently insignificant event can set in motion an irreversible process toward segregation by tipping the distribution one way or another. Both models highlight how well-intentioned individual preferences may result in undesirable aggregate outcomes, whereby good intentions and some level tolerance toward others are not enough to prevent the self-segregation mechanism. The review also covers several key empirical applications and limitations in research in this field.
    Keywords: Neighborhoods; Segregation; Schelling model; Urban Area
    JEL: J15 O15 P25 R23
    Date: 2017–12–30
  5. By: Ross Kendall (Reserve Bank of Australia); Peter Tulip (Reserve Bank of Australia)
    Abstract: Zoning regulations provide benefits, but they also restrict housing supply and hence raise prices. This paper quantifies their importance by comparing prices to the marginal costs of supply at different points in time. For detached houses, marginal costs comprise the dwelling structure and the land that other home owners need to forego. Relative to our estimates of these costs, we find that, as of 2016, zoning raised detached house prices 73 per cent above marginal costs in Sydney, 69 per cent in Melbourne, 42 per cent in Brisbane and 54 per cent in Perth. Zoning has also raised the price of apartments well above the marginal cost of supply, especially in Sydney. We emphasise that this is not the amount that housing prices would fall in the absence of zoning. The effect of zoning has increased dramatically over the past two decades, likely due to existing restrictions binding more tightly as demand has risen.
    Keywords: housing; housing prices; land prices; zoning; land use
    JEL: R31 R52
    Date: 2018–03
  6. By: Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); Luan, Fushu (Division of Economics, Xi'an Jiaotong-Liverpool University); Regis, Paulo José (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: We contribute to explore the roles of sub-national leaders and institutional environment in shaping urban innovation in China. We adopt a dynamic production function framework using a panel dataset comprising 280 prefecture cities during 2001-2014. We find that knowledge and education boost local innovative outputs and has positive spillover effects; the externalities of domestic and foreign capital are limited to local investments. Controlling for the basic production inputs, our analysis unveils a clear and significant role of meritocracy with regional dimension in sharpening the competitive advantage of city innovativeness measured by patents applications. Party secretary competition intensity and tenure encourages innovation while city mayor turnover rate has a negative effect. Marketization intensity also positively links with urban innovation. Compared with diversity and specialization, competitive industrial structures bring more creative elements into regional knowledge and idea production.
    Keywords: Innovation, Meritocracy, Institutions, Prefecture-Level City, China
    JEL: H11 R11 O30 P26 C33
    Date: 2018–02–20
  7. By: Harris Selod (The World Bank - The World Bank - The World Bank); Lara Tobin (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We propose a theory of urban land use with endogenous property rights that applies to cities in developing countries. Households compete for where to live in the city and choose the property rights they purchase from a land administration which collects fees in inequitable ways. The model generates predictions regarding the levels and spatial patterns of residential informality in the city. Simulations show that land policies that reduce the size of the informal sector may adversely impact households in the formal sector through induced land price increases. Empirical evidence from a sub-Saharan African city supports the model's assumptions and outcomes.
    Keywords: Land markets,Property rights,Tenure security,Multiple sales
    Date: 2018–01
  8. By: Kamran Bilir (University of Wisconsin - Madison); Christopher Tonetti (Stanford GSB); Treb Allen (Dartmouth College)
    Abstract: How do geography and other barriers to the free flow of information shape agent’s incentive to learn and hence the equilibrium diffusion of knowledge? We analyze this question in the context of statin drug prescriptions by doctors over decades during a period characterized by the invention of new chemical entities and the entry of generics. Using data on the universe of statin prescriptions in the U.S., first we describe statistical patterns of initial drug use and subsequent adoption as a function of doctor characteristics and location. There are clear spatial patterns to the timing and dispersion of adoption. We then develop a micro-founded structural model of learning and diffusion with many doctors per region and many regions. Doctors want to prescribe the right drug to each patient, given a vector of patient characteristics. Doctors are uncertain about the best drug to prescribe for each patient and through learning they increase the probability of providing the proper prescription. In any location, there is a distribution of doctors with different amounts of knowledge. Doctors learn by treating their own patients, but also from other doctors. There is also some randomness in whom a doctor interacts with from whom he or she learns. The ease, efficacy, and probability of learning from other doctors is a function of geography and other observables, like attending a common med school. We perform counterfactual analysis to see how decreases in the barriers to diffusion of knowledge affects effort dedicated to learning and, ultimately, patient outcomes.
    Date: 2017
  9. By: Inés Berniell (CEDLAS-FCE-UNLP.); Ricardo Estrada (CAF-Development Bank of Latin America.)
    Abstract: In this paper, we study how parents react to a widely-used school policy that puts some children at a learning disadvantage. Specifically, we first document that, in line with findings in other countries, younger children in Spain perform significantly worse at school than their older peers and – key to causal interpretation – that for children born in winter this effect is not due to birth seasonality. Furthermore, the age of school entry effect is significantly greater among children from disadvantaged families. To understand why, we analyze detailed data on parental investment and find that college-educated parents increase their time investment and choose schools with better inputs when their children are the youngest at school entry, while non-college-educated parents do not.
    JEL: I20 D10
    Date: 2017–12
  10. By: Nelson Lind (University of California San Diego)
    Abstract: This paper presents a theory of mortgage credit that explains (1) the rise of non-prime lending during the early 2000’s, (2) the simultaneous housing boom, and (3) the subsequent crisis. The theory is built on rational and competitive behavior by lenders in response to asymmetric information about borrower income risk. Two possible credit regimes may arise. In the “screening” regime, lenders ration credit through documentation requirements (screening contracts) and down-payment requirements (separating contracts). In the alternative “pooling” regime, risky borrowers gain access to low-doc low-down mortgages (pooling contracts). Joint housing and mortgage market equilibrium implies a tipping point phenomenon — a fall in income risk can trigger the pooling regime, lead to a sudden fall in documentation requirements, and, due to an indifference condition switching effect, generate a rapid appreciation in home prices. A housing crisis follows this credit-fueled boom once fundamentals revert and the screening regime returns. The theory matches microeconomic evidence on the allocation of credit during the mid-2000’s, explains why mortgage rates fell relative to treasury yields during 2003, and provides a framework to assess policies intended to rule out future housing crises.
    Date: 2017
  11. By: Giancarlo Corsetti (Centre for Macroeconomics (CFM); University of Cambridge); Joao B. Duarte (University of Cambridge; Nova School of Business and Economics); Samuel Mann (Centre for Macroeconomics (CFM); University of Cambridge)
    Abstract: We reconsider the effects of common monetary policy shocks across countries in the euro area, using a data-rich factor model and identifying shocks with high-frequency surprises around policy announcements. We show that the degree of heterogeneity in the response to shocks, while being low in financial variables and output, is significant in consumption, consumer prices and macro variables related to the labour and housing markets. Mirroring country-specific institutional and market differences, we find that home ownership rates are significantly correlated with the strength of the housing channel in monetary policy transmission. We document a high dispersion in the response to shocks of house prices and rents and show that, similar to responses in the US, these variables tend to move in different directions.
    Keywords: Monetary policy, High-frequency identification, Monetary union, Labour market, Housing market
    JEL: E21 E31 E44 E52 E44
    Date: 2018–02
  12. By: Kaila, Martti
    Abstract: In Finland, children start school during the calendar year they turn seven years old. This creates a discontinuous jump in school starting age. I utilize a regression discontinuity design and rich register data to study whether this discontinuous jump in the school starting age affects educational outcomes. I find that the school starting age law generates a significant jump in the school starting age at the turn of the year, which in turn affects educational outcomes. According to my results, those who are born just after new year have on average a 0.15 grade points higher GPA and are significantly more likely to be admitted to and graduate from general upper secondary school. In addition, I study heterogeneity in the results and find that the effect is significantly stronger for females than males. The findings may be taken as a causal effect of relative school starting age. To support this, I show that the density of assignment variable and various background variables evolve continuously in the vicinity of New Year. Theoretical literature offers three potential mechanisms that could explain the effects of school starting age. Firstly, the deviation may arise from the optimal school starting age. Secondly, the gaps may be caused by peer effects and lastly, relatively older children may perform better since they take the exams at an older age. I cannot distinguish between the different channels, and hence my results should be taken as a combined effect of all mechanisms.
    Keywords: economics of education, education and training, relative age effect, Labour markets and education, I21, I28, J13,
    Date: 2017
  13. By: BARRA, Cristian (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy); ZOTTI, Roberto (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)
    Abstract: Financial stability is a prerequisite for sustainable economic development. Assuming that financial stability is a public good, with a negative effect on social welfare and on economic development when risks are not properly controlled, will make regulators ensuring the smooth functioning of the system, promoting regional development and making the health of the financial institutions. This paper contributes to the literature on the relationship between financial stability and growth within the regions of one country, implying that institutional, legal and cultural factors are more adequately controlled and financial markets more accurately bounded. Using a rich sample of Italian banks over the 2001–2012 period, the paper addresses whether different measures of financial distress affect economic development of labour market areas in Italy. Results show that financial stability has a positive effect on local economic development mainly explained by the bank’s return on average assets.
    Keywords: Banks; Local economic development; Financial stability; Labour market areas
    JEL: C20 G21 G28 R11
    Date: 2018–02–22
  14. By: Setyo Tri Wahyudi (Faculty of Economics and Business, Universitas Brawijaya)
    Abstract: "Objective – This study aims to compare the developmental model of small industry in both regions. Methodology/Technique – The economic growth of the northern region is relatively higher compared to their southern counterpart. It is thought that industrial zone policies, which tend to be northern-region oriented, is the trigger for this. Although the development of small industries in the southern region of East Java is quite significant and able to absorb many workforces, it is still unable to boost the economic growth of the region. This research uses a shift share analysis method and a sample of regencies and cities in both regions. Findings – The result of the shift-share analysis model shows that the processing industry and wholesale and retail industry are basic sectors that can enhance the economic growth of both regions. Each industry is significantly shifted to a basic sector. Local governments have established clusters of small and medium businesses, such as earthenware, ceramics, snack, furniture, rattan craft, and stoneware industrial centres. Several other industrial sectors show significant contributions following the implementation of industrial zone policies. This suggests that the establishment of industrial zones is able to boost the region's economy and reduce disparities. However, small industries are low in capital accessibility, skills, and production technology. Therefore, to maintain the sustainability of industrial development, policies implemented by the government should focus on developing small businesses by improving their capital accessibility, skills, and technological proficiencies. Novelty – East Java's economy has shown a significant growth in recent years. Unfortunately, the growth across the region is still irregular. The disparity at the regional level, particularly between the northern and southern regions of East Java, is still prevalent."
    Keywords: Small Industry; Comparative Study; East Java; Development Model; Economics.
    JEL: R11 R58
    Date: 2017–12–09
  15. By: Maria D. C. Garcia­Alonso; Zaki Wahhaj
    Abstract: We investigate within a model of cultural transmission the conditions under which increased social diversity within a population - e.g. due to the inflow of immigrants - raise the potential for conflict as opposed to harmonious social diversity. Drawing on evidence from psychological studies, we develop the concept of 'bridging identity', an individual trait that (i) directly affects utility in culturally diverse social groups but is immaterial in culturally homogeneous social groups; (ii) is fostered (probabilistically) in those born in culturally diverse social groups but not in those born in culturally homogeneous social groups. We find first, increased cultural diversity within a population can lead to more mixed social groups or increased segregation depending on the paceof change. This is in contrast to Schelling's models of residential segregation which would always predict increased segregation. Furthermore, a temporary negative shock to bridging identity can trigger a dynamic process of segregation in the form of outmigration from culturally diverse social groups. But, paradoxically, if the shock is severe enough, its effects are mitigated.
    JEL: D10 J13 J15 A14 Z1
    Date: 2018–02
  16. By: Aaronson, Daniel (Federal Reserve Bank of Chicago); Davis, Jonathan (University of Chicago); Schulze, Karl (Federal Reserve Bank of Chicago)
    Abstract: Between 1907 and 1914, the “Galveston Movement,” a philanthropic effort spearheaded by Jacob Schiff, fostered the immigration of approximately 10,000 Russian Jews through the Port of Galveston, Texas. Upon arrival, households were given train tickets to pre-selected locations west of the Mississippi River where a job awaited. Despite the program’s stated purpose to locate new Russian Jewish immigrants to the Western part of the U.S., we find that almost 90 percent of the prime age male participants ultimately moved east of the Mississippi, typically to large Northeastern and Midwestern cities. We use a standard framework for modeling location decisions to show destination assignments made cities more desirable, but this effect was overwhelmed by the attraction of religious and country of origin enclaves. By contrast, there is no economically or statistically significant effect of a place having a larger base of immigrants from other areas of the world and economic conditions appear to be of secondary importance, especially for participants near the bottom of the skill distribution. Our paper also introduces two novel adjustments for matching historical data – using an objective measure of match quality to fine tune our match scores and a deferred acceptance algorithm to avoid multiple matching.
    Keywords: Immigrants; Moving to Opportunity (MTO)
    JEL: J1 J6 J61
    Date: 2018–02–28
  17. By: Jun-ichi Itaya; Chris Tsoukis
    Abstract: This paper investigates how the presence of social capital affects the externality arising from status-seeking preference as a parable for inefficient antagonistic behavior. It is assumed that the stock of social capital is accumulating through joint social interaction between rational individuals who are forward looking. Using a differential game, we show that although the presence of social capital mitigates the tendency of overconsumption over time, social capital ends up declining to zero. It is also shown that the benefits from social capital enhance the motivation of individuals to accumulate social capital thereby leading to deter overaccumulation and thus possibly improving social welfare.
    Keywords: social capital, status externality, Markov perfect, equilibrium, differential game
    JEL: O40 Q33
    Date: 2017
  18. By: Marcos Diaz Ramirez (OECD); Thomas Liebig (OECD); Cécile Thoreau; Paolo Veneri (OECD)
    Abstract: This paper provides an assessment of the presence of migrants, their characteristics and integration outcomes across OECD regions, based on a new OECD database on immigrant integration at the regional level. It reveals the wide diversity of the presence of migrants within countries, as well as the specific patterns observed in the way migrants locate and integrate in society across regions. For example, migrants tend to be more spatially concentrated in capital-city and metropolitan regions than the native-born population. What is more, highly-educated migrants are more likely to locate in the same regions where the highly-educated natives concentrate, a trend that is not observed for the low-educated foreign-born. Integration outcomes of migrants, relative to the native-born, are measured through a variety of labour market and housing indicators. The paper also provides preliminary findings on public attitudes towards migrants across regions, which suggest that attitudes tend to be more positive in regions with larger shares of foreign-born population.
    Keywords: Integration, Migration, Regions
    JEL: F22 R10
    Date: 2018–03–14
  19. By: Johannes van der Pol
    Abstract: The aim of this paper is to show how firm-level partner selection strategies impact the structure a of collaboration network. The analysis is performed in three stages. A first stage identifies how partners select their collaborators, a second stage shows how these decisions result in clusters, and a final stage studies the global network structure that emerges from the interconnection of these clusters. In order to highlight the importance of the sectors’ influence, the analysis is performed on the French Aerospace and the French Biotech collaboration networks. Results show that the firm-level strategies are the same in both sectors while the resulting global network structure is different (core-periphery structure with small-world characteristics for the aerospace network and no particular structure for the biotech sector). The difference in the global network structure can be explained by sectorial characteristics. These differences define the manner in which knowledge flows through the network.
    Keywords: SNA; Sectoral analysis; Collaboration network; Biotechnology; Aerospace; ERGM; Innovation
    JEL: L25 C23 D85 L14 C20
    Date: 2018
  20. By: Bettina H. Aten (Bureau of Economic Analysis)
    Date: 2018–02
  21. By: Antonescu, Daniela; Chisăgiu, Livia
    Abstract: In Romania and European Union there are recorded unwanted tendencies among young generation that endanger some of the top priorities of the EU Treaty. The main research questions is, the first, what is the evolution of the phenomenon of early leavers, young unemployment, NEET and employment rate at national and regional level, and secondly, what are the economic and social implications? The papers will bring into debate the main evolutions on the labor market recorded by the young generation. This could influence the decision factors regarding socio, economic and demographic impact that could be envisioned. The research method is investigation the Eurostat database and NS and processing data with the help of concentration coefficients, graphs and charts of the most relevant results of data processing. In conclusion, the early leavers, young unemployment and NEET phenomena are the main causes for poor employment and, respectively, a threat for the employability, the productivity and economic growth potential.
    Keywords: inactivity, youth employment, Gini Coefficients
    JEL: J0 J01 J08 J6 J60 J61 J64 J65 J68
    Date: 2016–10–01
  22. By: Teodora Marinova (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration)
    Abstract: The traditional new product development (NPD) process is vertically integrated within a company, resulting in internally developed products by professionals. However, it encounters difficulties to optimally capture all innovation-relevant knowledge, which is distributed also among external actors such as product end users. This paper investigates if the theoretically proposed positive effect of integrating users in NPD on new product success is supported by evidence from the field. The aim is to summarize existing field insights in a conceptual model outlining the paths of influence of user integration in NPD on subsequent new product performance. By reviewing the findings of empirical studies based exclusively on real-field data from various industries, I identify factors that can be assigned to three groups: (i) Stage of the NPD process in which users are integrated, (ii) User-level factors, and (iii) Innovation setting factors. I map the relationships between the different factors in a holistic framework that can serve as guidance for practitioners who consider involving users in their innovation process.
    Keywords: User innovation, user integration, new product development, new product success.
    JEL: M3 O31 O32 O33
    Date: 2018–03
  23. By: Flögel, Franz; Gärtner, Stefan
    Abstract: This paper re-visits the state of decentralised banking in Germany, Spain and the UK. The cross-country comparison we conducted has identified Germany as having the most decentralised banking system, followed by Spain and the UK, as expected. The development of regional and double-purpose banks, i.e. savings and cooperative banks, mainly account for the differences in the degree of centralisation. Whereas no such bank exists in the UK any longer and real savings banks in Spain have almost disappeared, two decentralised banking groups with more than 1,400 savings and cooperative banks dominate business finance in Germany. Our comparison has identified three factors of success contributing to the persistence of decentralised banking: I. Short operational and (especially) functional distance and embeddedness in supportive regional bank associations. Short distances allow banks to capitalise on soft information advantages in lending, whilst banking associations also secure access to advanced banking knowledge for banks headquartered in peripheral regions. II. The development of "real" decentralised universal banking. Here, the time when regional savings and cooperative banks received the right to lend is crucial. Because it took them so long to get permission to offer loans, savings banks in Spain and the UK were latecomers to (business) lending, whereas lending had always been the business of German savings banks. Therefore, savings banks in the UK and Spain were not able to capitalise on soft and local information advantages in short distance lending. III. The interplay of the regional principle (regional market segregation), regional embeddedness and a national system that balances regional disparities. Together, these three factors help to make regional banks sufficiently successful, even in weak regions, and hinder competition between banks, thereby supporting meaningful cooperation in banking associations and relationship lending. Savings banks have never been as important in business lending in the UK and Spain as they are in Germany. Though large commercial banks dominate business lending in both countries, some (partly newly established) banks tend to specialise in lending to small enterprises at shorter distances there. To support short-distance lending, this paper suggests a compensation scheme for screening and monitoring costs. Such a scheme may stimulate banks to shift, or preserve, their lending decision processes to the regional level and reduce the need for standardisation, centralisation and bank mergers in times when interest rates are low.
    Keywords: comparing banking systems,SME finance in the UK,Spain and Germany,decentralised banking
    JEL: D43 E21 G01 G21 G38 R12
    Date: 2018
  24. By: Paolo Avner (The World Bank - The World Bank - The World Bank); Shomik Raj Mehndiratta (The World Bank - The World Bank - The World Bank); Vincent Viguie (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - AgroParisTech - EHESS - École des hautes études en sciences sociales - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Stéphane Hallegatte (The World Bank - The World Bank - The World Bank)
    Date: 2018–01–29
  25. By: Cortes, Kristle Romero (University of New South Wales); Demyanyk, Yuliya (Federal Reserve Bank of Cleveland); Li, Lei (University of Kansas); Loutskina, Elena (University of Virginia); Strahan, Philip E. (National Bureau of Economic Research)
    Abstract: Post-crisis stress tests have altered banks’ credit supply to small business. Banks affected by stress tests reduce credit supply and raise interest rates on small business loans. Banks price the implied increase in capital requirements from stress tests where they have local knowledge, and exit markets where they do not, as quantities fall most in markets where stress-tested banks do not own branches near borrowers, and prices rise mainly where they do. These reductions in supply are concentrated among risky borrowers. Stress tests do not, however, reduce aggregate credit. Small banks increase their share in geographies formerly reliant on stress-tested lenders.
    Keywords: small business lending; stress test; credit supply; large banks;
    JEL: G2
    Date: 2018–03–01
  26. By: Erica Raimondi; Loris Vergolini
    Abstract: In this paper, we analyse the effect of the Berlinguer reform that was implemented in Italy in 1999 and increased the compulsory school from eight to nine years. As a result of the reform, students had to attend school until age 15 instead of age 14 and thus had to attend at least one year of upper secondary school (for students with a regular career). Using data from Italian Labour Force Surveys (LFS) (1993-2010) and following a counterfactual approach, applying counterfactual time series and segmented regressions, we evaluate the effect of the Berlinguer reform on attendance and graduation rates. The results show that the expansion of compulsory schooling leads to staying in school for a larger share of 16-year-olds, especially those who are judged to be more at risk of dropping out: students with less-educated parents and those with parents having a low occupational level. By age 17, however, part of the effect has already vanished, and no effects are found on graduation rates, even among at-risk youths. The compulsory schooling policy may have been more effective in adjusting the legislation to extant student behaviours than in producing relevant changes in educational decisions.
    Keywords: Compulsory schooling, Educational reform, Drop-out, Graduation, Italy
    JEL: D04 I24 I28
    Date: 2017–10
  27. By: Alicia Gómez-Tello (Universitat de València, Spain); Alfonso Díez-Minguela (Universitat de València, Spain); Julio Martínez-Galarraga (Universitat de València, Spain); Daniel A. Tirado-Fabregat (Universitat de València, Spain)
    Abstract: This paper explores regional price variation in early twentieth-century Spain. Using consumer price information from the bulletins published by the Instituto de Reformas Sociales between 1910 and 1920, we build a dataset with a total of 40,581 quotes covering 22 items for each of the 49 provinces. We then estimate provincial price levels following a country-product-dummy (CPD)approach. Our preliminary findings suggest that substantial spatial price variation existed. In line with the Balassa-Samuelson conjecture, it appears that price and productivity levels were somewhat related. Nevertheless, spatial price variation prevails among the less industrialised provinces, and this calls for further research and discussion.
    Keywords: Spain, Prices, Living Standards, Economic Development
    JEL: E01 N00 N9 O11
    Date: 2018–02
  28. By: Nicola Curci (Bank of Italy); Domenico Depalo (Bank of Italy); Emilio Vadalà (Bank of Italy)
    Abstract: This paper evaluates the performance of Italian local public enterprises (LPEs) with respect to their private sector counterparts. We address the following questions: i) do LPEs perform worse than (comparable) private firms?; ii) does the performance gap depend on the ownership structure (the share held by the public) or on the market structure (the degree of competition in the sector)?; iii) which are the main determinants of LPEs' performance in terms of productivity? The main findings – which are robust to the possible endogeneity of the ownership structure – are as follows: i) LPEs perform less well than private companies by about 8 percent in terms of TFP; ii) although both ownership structure and market structure matter, our results suggest that the ownership structure is more important; and iii) the performance gap of LPEs with respect to private firms seems to be driven by over-capitalization rather than by over-employment.
    Keywords: local public firm, firm performance, instrumental variables
    JEL: L33 L25 H42 C26
    Date: 2017–11
  29. By: Saastamoinen, Antti; Kortelainen, Mika
    Abstract: We study the effects of intergovernmental grants on school spending within the Finnish system of high school education funding. The system allocates lump-sum intergovernmental grants to local education organizers using a kinked grant rule. Utilizing the quasi-experimental variation in grants given by the rule, we identify the effects of grants on municipal high school education expenditures. Our results indicate that grants stimulate spending while local tax rates or revenues do not seem to be responsive to grants, thus suggesting the presence of a typical flypaper effect. However, we also consider the possibility that grant responses might be heterogeneous among municipalities. Based on our heterogeneity results, the grant response is positively associated with the share of high school age population, while the higher share of elderly is related to a lower propensity to spend on education out of grant funding. This result is in line with the idea of intergenerational conflict in education spending preferences often presented in education finance literature.
    Keywords: intergovernmental transfers, flypaper effect, heterogeneous spending preferences, regression kink design, Local public economics, I22, H75, H73,
    Date: 2018
  30. By: Alarcón-Rivero, Jorge V.; Ernst, Christoph
    Abstract: This study, prepared under EU funding and on request by the Indonesian government,has the ambition to understand the inter-regional dynamics in terms of economics, but also in terms of employment and Decent Work (DW) dimensions. It tries to showcase, with the help of simulations, on how to combine macro policy instruments more effectively with inter-regional characteristics, i.e. by identifying the most important “within” region activities, main natural resources, strategic or privileged location and how each region relates to the other regions. Its ultimate goal is to provide insight into how to enhance different types of regional programmes and investments of certain main regional sectors and how such investments relate to higher region’s growth and regional employment creation for different types of workers. The study uses the Social Accounting Matrix methodology for ex-ante“decent employment” impact assessment of key sectoral policies in Indonesia. Such approach builds on work developed by the ILO, EMPINVEST, on Dynamic SAM and Inter-Regional SAM and the indicators compiled and analyzed in the case of Indonesia.
    Keywords: 1, 2, 3, 4
    Date: 2017
  31. By: Thushyanthan Baskaran; Mariana Lopes da Fonseca
    Abstract: We study the local favoritism of appointed German state ministers. Matching hand-collected data on ministers’ place of residence to a sample of more than 8,000 west German municipalities during the period 1994–2013, we find that the home municipality of a state minister experiences higher employment growth than control municipalities. Given the institutional context, this effect is ostensibly due to apolitical favoritism (home bias) rather than electoral considerations. We conclude that favoritism may lead to a distortion in the allocation of public resources even in contexts with strong political institutions.
    Keywords: distributive politics, favoritism, employment growth
    JEL: D73 H70
    Date: 2017
  32. By: João Pereira dos Santos (Nova School of Business and Economics); José Tavares (Nova School of Business and Economics and Centre for Economic Policy Research (CEPR))
    Abstract: We take advantage of a quasi-natural experiment to assess the impact of European funds on firm dynamics in regions that, while not having their status changed, saw their neighbours increased access to European funds. Causality is established in a difference-in-differences intention to treat setting, using a rich dataset that considers the universe of Portuguese mainland municipalities from 2003 to 2010, and controlling for socio-economic, political and demographic variables. Our findings suggest a causal impact of between 1 and 2 percent in private sector firms´ entry and net entry rates, while we find no impact on firm exit rates. We consider time and space placebos to assure the reliability of our estimates. Our findings suggest that EU regional funds have a greater impact in times of distress, such as the world economic crisis, as far as entry rates are concerned. The analysis of the cross-section of firm demonstrates it is domestic owned micro firms in the primary and tertiary sectors that are most impacted by regional funds.
    Keywords: quasi-natural experiment, European funds, firm creation; municipalities
    JEL: C21 R10
    Date: 2018–03
  33. By: Carriero, Andrea (Queen Mary University of London); Galvao, Ana Beatriz (University of Warwick); Marcellino, Massimiliano (Bocconi University and CEPR)
    Abstract: In this paper we address three empirical questions related to credit conditions. Do they change the dynamic interactions of economic variables by characterizing different regimes? Do they amplify the effects of economic shocks? Do they generate asymmetries in the effects of economic shocks depending on the size and sign of the shock? To answer these questions, we introduce endogenous regime switching in the parameters of a large Multivariate Autoregressive Index (MAI) model, where all variables react to a set of observable common factors. We develop Bayesian estimation methods and show how to compute responses to common structural shocks. We find that credit conditions do act as a trigger variable for regime changes. Moreover, demand and supply shocks are amplified when they hit the economy during periods of credit stress. Finally, good shocks seem to have more positive effects during stress time, in particular on unemployment.
    Keywords: Credit conditions; Multivariate Autoregressive Index models ; Smooth Transition ; Bayesian VARs ; Large datasets ; Structural Analysis JEL Classification Numbers: E32 ; c11 ; C55 ;
    Date: 2018
  34. By: Armanda Cetrulo; Valeria Cirillo; Dario Guarascio
    Abstract: In the last decades, labour flexibility has been introduced all across Europe with the aim of spurring jobs and productivity. This work explores the link between the use of temporary employment and the propensity to introduce product innovations by firms. The analysis performed at the sectoral level combines information on innovation, economic performance and employment for five major European economies observed over the period 1998-2012. Taking into account the variety of technological patterns, the authors find that industries using temporary employment more intensively are characterized by a weak product innovation propensity. The negative correlation between temporary employment and innovation is stronger in medium and high-tech sectors identified alternatively by Peneder classification and by the concentration of firms’ intangible assets proxing different Schumpeterian regimes of accumulation.
    Date: 2018–03
  35. By: Thomas Buser (University of Amsterdam); Noemi Peter (University of Groningen); Stefan C. Wolter (University of Bern)
    Date: 2018–03

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