Trade liberalization and intersectoral labor movements

This paper examines the impact of trade liberalization episodes on movements of labor across sectors. The aim is to assess empirically whether increased trade openness leads to increased structural change and, if so, to what extent. Results for a set of 25 liberalization episodes suggest weakly negative effects of liberalization on the extent of intersectoral labor shifts at the economy-wide 1-digit level of disaggregation. We do uncover increased sectoral change after liberalization at the 3-digit level within manufacturing, although the estimated effects are statistically weak and small in magnitude. The effects of liberalization on labor shifts differ across individual countries, in a way related to the scope and depth of reforms.     

Agricultural productivity differences and credit market imperfections

This paper presents a simple model to examine the implication of credit market imperfections when considering the huge variation of agricultural labor productivity across countries. The development of credit markets enables more agents to acquire skills to work in non-agricultural sectors. The expansion of the sectors decreases the labor supply to agriculture as well as increases the supply of modern intermediate inputs to agriculture. Agricultural producers accordingly substitute the relatively cheap intermediate inputs for labor to produce a given level of an agricultural good, and, thereby, the output per worker in agriculture is improved. Poor countries with less developed credit markets are, therefore, far less productive in agriculture than rich countries with well-developed credit markets.     

Varieties of entrepreneurship: exploring the institutional foundations of different entrepreneurship types through ‘Varieties-of-Capitalism’ arguments

While entrepreneurship researchers agree that institutions ‘matter’ for entrepreneurship, they also have a rather encompassing understanding of institutions as almost any external factor that influences entrepreneurship. Ultimately, this literature thus comes up with a long list of institutional factors that may explain entrepreneurial differences between countries. But which institutions are most influential? How do these institutions relate to different types of entrepreneurship? And to what extent are institutions complementary to each other in the way they sustain different entrepreneurship types? The literature on ‘Varieties-of-Capitalism’ (VoC) offers a parsimonious theoretical framework to address these questions. Based on the VoC literature, we theoretically derive a consistent set of institutional indicators that can explain differences in entrepreneurship types between countries. Based on principal component and cluster analyses, we illustrate how 21 Western developed economies cluster around four distinct institutional settings. Furthermore, we use simple OLS regressions to show how these institutional constellations are related to different types of entrepreneurship. We conclude that four different ‘Varieties of Entrepreneurship’ can be identified across the Western world. The main implication of our findings is that a ‘perfect’ institutional constellation, equally facilitating different types of entrepreneurship, does not exist. Policy-makers seeking to stimulate entrepreneurship are thus faced with the trade-off of targeting policy reforms to that entrepreneurship type they intend to promote—at the expense of other types of entrepreneurship and the broader societal consequences such reforms will have.     

The effect of trade and political institutions on economic institutions

This study examines the relationship between trade and the quality of economic institutions under different political institutions. It uses panel data of 138 countries from 1984 to 2010 and employs instrumental variables and identification through heteroscedasticity to mitigate the problem of endogeneity. The findings suggest that the effect of trade on economic institutions reduces significantly in the presence of extractive political institutions. The findings indicate that ‘trade’ is not a sufficient tool for improving economic institutions; rather, trade policies need to be embedded in distinct political institutions to trigger the substantive improvement of economic institutions.     

国际贸易、技术变动对我国工业部门劳动收入份额的影响

文章较为系统地分析了国际贸易、技术进步等因素对中国工业部门劳动收入份额的影响。研究显示在1999～2009年期间,我国工业部门的劳动收入份额总体上呈现出缓慢下降的趋势,工业部门劳动收入份额变动主要是行业内部劳动力再配置的结果;利用中国工业部门21个细分行业的面板数据,通过系统广义矩方法对国际贸易、技术变革对行业劳动收入份额的影响进行计量分析表明,国际贸易具有较为显著的提高我国工业部门行业劳动份额的效应,而技术进步则存在显著降低工业行业劳动份额的效应,这与我国工业部门在研究期内的技术进步具有劳动节约型特征有关。     

Unionized Labour Market,Unemployment Allowances,Productive Public Expenditure And Endogenous Growth

An endogenous growth model with unionised labour market is developed to analyse the interaction between the tax financed productive public expenditure policy and the unemployment benefit policy. We consider both ‘Efficient Bargaining’ model and ‘Right to Manage’ model; and analyse properties of balanced growth rate maximising income tax policy as well as effects of unionisation. This growth rate maximising income tax rate exceeds the competitive output share of the public input in the presence of an unemployment benefit scheme. The growth effect of unionisation in the ‘Efficient Bargaining’ model and in the ‘Right to Manage’ model are different.     

Income shares,secular stagnation and the long-run distribution of wealth

Four alarming stylized facts have recently emerged in the United States: (a) a decline in the labor share of income; (b) a decline in labor productivity; (c) an increase in the top 1% wealth share and (d) an increase in the capital-income ratio. In Capital in the XXI Century, Thomas Piketty's argument is that the r > g inequality determines an increase in the capital-income ratio; if the elasticity of substitution in production is above one, the profit share rises. We provide a contrasting explanation that draws from the Post Keynesian approach to differential saving propensities between classes and the Classical-Marxian theory of induced technical change. In a simple model of “capitalists” and “workers,” we show that institutional changes that lower the labor share—declining unionization, increasing monopsony power in the labor market, the global ‘race to the bottom' in unit labor costs or the exhaustion of path-breaking scientific discoveries—can reduce labor productivity growth because of the lessened incentives to innovate to save on labor costs. A falling labor share reduces workers' total savings, and wealth concentrates in the capitalists' hands. A higher profit share and wealth share both put pressure on accumulation: but the long-run growth rate, which is anchored to labor productivity growth, has fallen. To restore balanced growth, the capital-income ratio must rise, independent of the elasticity of substitution. These tendencies are not inevitable: taxation can be used to implement any wealth distribution targeted by policymakers, while worker-crushing institutional arrangements can also in principle be reversed through policy. Neither change appears likely given the current institutional and global policy climate.     

On the origins of comparative advantage

This paper proposes a simple theory of international trade with endogenous productivity differences across countries. The core of our analysis lies in the determinants of the division of labor. We consider a world economy comprising two large countries, with a continuum of goods and one factor of production, labor. Each good is characterized by its complexity, defined as the number of tasks that must be performed to produce one unit. There are increasing returns to scale in the performance of each task, which creates gains from specialization, and uncertainty in the enforcement of each contract, which create transaction costs. The trade-off between these two forces pins down the size of productive teams across sectors in each country. Under free trade, the country where teams are larger specializes in the more complex goods. In our model, it is the country where the product of institutional quality and human per worker capital is larger. Hence, better institutions and more educated workers are complementary sources of comparative advantage in the more complex industries.     

The Economic Impacts of Turkish Accession to the European Union

Half a century has passed and Turkey is no further toward achieving EU membership. Under the mandate of the Barcelona Declaration, EU–Turkish industrial tariffs will be abolished, whilst agro‐food protectionism remains largely intact. Consequently, the direct impacts from a hypothetical EU accession scenario will be concentrated in agro‐food sectors, whilst their share of economic output in Turkey implies ‘secondary’ macro impacts. To this end, a computable general equilibrium (CGE) framework is employed to quantitatively reassess full Turkish accession. Unlike previous CGE studies, agriculture, fishing and food sectors are disaggregated, whilst significant advancements to the ‘standard’ model code are incorporated to capture the vagaries of agricultural factor, input and product markets. In addition, a realistic ‘baseline’ scenario is constructed including ‘up to date’ trade and domestic agricultural policy reforms prior to Turkish entry to the EU. The results show that trade‐led gains in Turkey are moderated due to tariff liberalisation prior to EU entry, whilst Turkey receives significant budgetary transfers from the CAP budget, which are ‘mirrored’ as EU‐27 costs. With additional migration effects, Turkish (EU‐27) production possibilities fall (rise), whilst real income per capita rises (falls).     

Drivers of training participation in low skilled jobs: the role of ‘voice’, technology,innovation and labor shortages in German companies

This article investigates the role of ‘voice’, technology, innovation (of products, services, or processes) and labor shortages in the training participation of low skilled workers in German companies. By building on the key findings of previous research, hypotheses on drivers of training participation are derived from filter theory and the concept of social embeddedness. Regression and cluster analysis based on the German IAB Establishment Panel (wave 2011) show evidence that training participation is shaped by ‘voice’‐related institutional company characteristics such as employee representation or formalized HR practices. Both characteristics often cluster together. Regression analyses confirm that companies in this cluster train a higher share of their low‐skilled workforce. The share is particularly high when companies in this cluster face labor shortages. Apart from that, advanced technology and recent innovations at the company level are not related to higher rates of training participation among low skilled workers.     

Path dependence,change and the emergence of the first joint-stock companies

This paper presents a model of path dependence and change and focuses on the gaining of new institutional knowledge. The main thesis is that in ‘extraordinary’ historical situations the possibility of change increases as a result of external pressure and successful adaptation to it. The model is tested applying it to the case study of seventeenth-century United Provinces (Dutch Republic). Such a situation existed in the sixteenth–seventeenth-century United Provinces, due to their uprising against Spanish rule. Because there existed no strong central authority, the decision-makers had to develop new institutions in order to successfully capture the lucrative spice trade from their enemies. The solution was the joint-stock company, which, through the phases of a continuous decision-making procedure, developed into the ‘permanent’ Dutch East India Company (VOC) in parallel also to the development of the Amsterdam Stock Exchange.     

The double-edged sword of legitimacy in base-of-the-pyramid markets

As compared to developed countries, a much higher proportion of entrepreneurs within base-of-the-pyramid (BOP) markets operate unregistered businesses. Prior research has suggested that the primary cause of such informal activity in these settings is the general failure of ‘weak’ institutions to provide sufficient resources to warrant formalization. We attempt to extend such thinking by deconstructing the discrete and inter-related effects of formal business registration on the level of resources obtained by entrepreneurs from financial, labor, and legal institutions within BOP markets. Using a multi-method approach involving 299 entrepreneurs within Guatemala City, our results suggest that being seen as a ‘legitimate’, registered business can actually lead to both increased resource provision and resource appropriation. More specifically, adhering to the norms and rules prescribed by regulatory institutions within weak legal environments can convey positive signals of stability and profitability that both attract the desired attention from formal institutional actors, as well as unwanted attention from criminals.     

中国制造业贸易的要素含量研究

本文应用贸易要素含量的研究方法,系统分析了1992-2002年中国的制造业贸易。研究发现,中国是低级技能劳动要素的丰裕国家,是资本和高级技能劳动要素的稀缺国家。相较于资本,中国更缺人才。不同产业部门之间,各类劳动要素分布存在巨大差异。10年间,中国所有要素禀赋都有较大改善,技术进步、贸易政策和存量积累三个因素对比较优势的变迁施加了不同的影响。其中,贸易结构日益向着密集出口低级技能劳动要素,同时更加依赖进口高级技能劳动要素和资本要素的方向演变,值得密切关注。     

Researching the entrepreneurial behaviour of new and existing ventures in European agriculture

This study analyzes differences existing between new and established agri-entrepreneurs as well as differences in relation to their counterparts in non-agricultural ventures. This study uses the resource-based view and institutional economics as conceptual frameworks and focuses on the analysis of the resources and capabilities; entrepreneurial orientation (risk-taking, proactiveness and innovativeness); and legitimation affecting the entrepreneurial process. The literature points out that the specific characteristics of the sector (strong family links and institutional support) can condition the entrepreneurship process. Thus, hypotheses are developed to test these relationships. We use random effects models to test our hypotheses with the Global Entrepreneurship Monitor (GEM) for 20 European countries. Results show that agri-entrepreneurs have weaker entrepreneurial capabilities than other sectors. However, new entrants into the agricultural sector are not less entrepreneurial in relation to other sectors. On the other hand, established agri-entrepreneurs are less proactive than other sectors. Results suggest that new entrants into agriculture are more entrepreneurially oriented than established ones. Our study contributes to the entrepreneurship literature by contextualizing the entrepreneurship process and providing valuable insights for policy-makers to enhance farmers’ entrepreneurial skills and entrepreneurial orientation.     

Wealth Distribution,Elasticity of Substitution and Piketty: An ‘Anti‐Dual’ Pasinetti Economy

This paper studies the dynamics of wealth distribution between workers and capitalists in a neoclassical growth model with differential saving rates. It shows that if capitalists are thriftier than workers and the factors elasticity of substitution is high enough to ensure endogenous growth, capitalists’ share of total wealth asymptotically tends to one. It is also proved that a tax on capital income shifts the long run distribution of wealth in workers’ favor, and that the capitalists’ share of total wealth is a decreasing function of the tax rate. The results of the paper are compared to Piketty's ‘fundamental laws’ of capitalism.     

The Performance Impact of Informal and Formal Institutional Differences in Cross-Border Alliances

This study addresses the simultaneous and diverse effects of differences in informal and formal institutions on cross-border alliances’ financial performance. We utilize data from 405 microfinance institutions (MFIs), based in 74 developing countries, that have alliances with partners from developed countries. We find that the impact of informal institutional differences between MFIs and their cross-border partners is sigmoid-shaped, with performance first increasing, then declining, before improving again as informal institutional differences grow large. By contrast, formal institutional differences appear to be detrimental to MFIs’ performance. Consistent with our prediction, we find that MFIs’ cross-border experience moderates both formal and informal institutional effects.     

结构变化、行业劳动份额对中国初次分配的影响

利用企业层面的数据,从行业视角对中国的劳动份额及其变化进行实证研究。结果发现:与当前普遍认为劳动份额持续下降的看法不同,近年来中国劳动份额处于上升态势,这说明初次分配的恶化态势正得以改善,但是劳动份额仍然偏低,劳动者在初次分配中仍然处于不利地位;总体劳动份额的波动主要来源于行业内劳动份额的波动,两者表现为"齐升齐降",只是波动幅度有差异而已。对劳动份额波动的进一步分解表明,对于总体劳动份额的变化,行业内效应贡献了82.83%,而结构效应仅仅贡献了17.17%。     

Calling Baumol: What telephones can tell us about the allocation of entrepreneurial talent in the face of radical institutional changes

In his seminal contribution, Baumol (1990) proposes that the direction of entrepreneurial effort towards its productive (e.g., start-up activity) or unproductive (e.g., rent-seeking) use in a society depends on institutions or the “rules of the game”. We focus on an important micro-foundation of Baumol's theory namely that certain individuals change the direction of entrepreneurial efforts with institutional change. Our research contrasts with previous work on the role of institutions, which mostly focuses on the aggregate macro-level, while not observing individual behavior. We analyze who decides to start a venture in East Germany after the fall of the Berlin Wall and find that many individuals who demonstrated commitment to the anti-entrepreneurial communist regime in the GDR were active in launching new ventures soon after German re-unification. We argue that commitment to communism among post-communist entrepreneurs reflects rent-seeking. Once institutions change radically, entrepreneurial efforts are directed towards start-up activity. We rely on the German Socio-Economic Panel Study (SOEP) that includes information on whether East German respondents had a telephone before German re-unification, which was one of the most sought-after rewards for commitment to the regime. We find that telephone owners had a higher propensity of becoming successful firm founders. Telephone owners were also more likely to have an entrepreneurship-prone personality profile and value orientation. Our results confirm Baumol's theory and suggest that alertness to entrepreneurial arbitrage opportunities is guiding the redirection of entrepreneurial effort in the face of drastic institutional change.Executive summaryThere is a large body of literature on the effect of institutions on entrepreneurship. A good share of this literature is rooted in the seminal contribution by Baumol (1990) who argues that the shape of institutions determines whether people direct entrepreneurial effort to productive, unproductive or destructive entrepreneurial activities. Despite the fact that Baumol‘s main argument is at the individual micro-level, most of the literature focuses only on the macro-level implications of his theory. In contrast to most previous studies, we are not focusing on the aggregate level of entrepreneurship but explore the micro-foundations of Baumol's theory and analyze how (drastic) institutional change affects the entrepreneurial choice at the individual level.In our discussion of Baumol's work, we also introduce Kirzner's concept of individual alertness to arbitrage opportunities which he originally formulated for market economies. We extend Kirzner's insights on the role of alertness to other institutional contexts (e.g., socialism) and forms of arbitrage (e.g., engagement in socialist organizations) other than start-up activity, and highlight the role of institutional change in shaping processes of opportunity formation.It is important to understand how individuals allocate their entrepreneurial effort in times of major historical shocks and institutional changes for several reasons. First, since entrepreneurship is an important driver of economic growth and development, it is crucial to understand how institutional change affects entrepreneurial behavior at the individual level for designing policy measures targeted at increasing the entrepreneurial propensity of people. Second, the share of people with an entrepreneurial talent in a society is an enormous resource to cope with socio-economic change. Third, it is also important to understand the micro-foundations of Baumol's work as vast empirical evidence on the impact of institutions on entrepreneurial activities that is available at the macro-level relies on the validity of the micro-foundations.We find that people who demonstrated commitment to one of the most anti-entrepreneurial institutional regimes in history—communism—were more likely to start a firm after transition to a market economy. Our analysis is based on the case of East Germany that saw a sudden shift from an anti-entrepreneurial communist regime that did not reward start-up activities towards an entrepreneurship-facilitating market economy after the fall of the Berlin Wall. Those people who were actively committed to the regime as evidenced by material rewards obtained in the GDR were more likely to become (successful) self-employed after the fall of the Berlin Wall. We also observe that people with an entrepreneurship-prone personality profile and those who put a strong emphasis on entrepreneurial values were more likely to have obtained material rewards in communism that indicate a strong commitment to the system.We argue that applying and extending Baumol's and also Kirzner's ideas helps understanding this puzzling phenomenon. In essence, regime commitment can be seen as a form of rent-seeking activity, which is a classic example of unproductive entrepreneurial activity discussed by Baumol. Rent-seeking in the context of communism could be expressed, for example, in enthusiastic engagement in public organizations (e.g., party councils, youth organizations, state-owned enterprises) in exchange for specific material rewards. Their pronounced alertness to new arbitrage opportunities may have enabled these same individuals to switch to start-up activity once this option became available to them and if it was more profitable than rent-seeking.We contribute to the literature by supporting the idea that the institutional framework conditions determine the type of entrepreneurial activity to which entrepreneurially talented people devote their efforts. So far, this claim found support mainly in aggregated macro-level data. Another important insight from our analysis is that entrepreneurs are flexible and agile economic agents who are alert to arbitrage opportunities and able to promptly adapt themselves to even radical changes, such as the shock transition from a socialist command economy to a market economy. Alertness to opportunities in a market economy context could hardly be learned in an anti-entrepreneurial context. Hence, an immediate re-allocation of entrepreneurial efforts indicates that alertness to arbitrage opportunities emerging in a market economy does not necessarily require experience in a market economy context.Our assessment also suggests that institutional change is shaping subjective processes of opportunity formation. Hence, the debate on whether opportunities are ‘out there’ or they have to be created should take into consideration how institutions and institutional change set the boundaries for opportunities. In particular, identifying and pursuing new opportunities brought about by institutional change could represent a specific form of “entrepreneurship talent.”     

北京市出口贸易与经济增长关系的实证研究

通过对改革开放以来北京市出口贸易与经济增长关系的实证分析,得出的基本结论是,经济体制改革和对外开放两因素对经济增长都具有显著的促进作用(前者的产出弹性为0.635,后者为0.110),其中非国有化程度的提高对经济增长的作用较大;同时,北京市的经济增长方式仍以要素投入为主,其中主要是劳动的投入。     

THE DOUBLE ROLE OF SKILLED LABOR,NEW TECHNOLOGIES AND WAGE INEQUALITY

We examine the relationship between the supply of skilled labor, technological change and relative wages. In accounting for the role of skilled labor in both production activities and productivity‐ enhancing ‘support’ activities we derive the following results. First, an increase in the supply of skilled labor raises the employment share of non‐production labor within firms, without lowering relative wages. Second, new technologies raise wage inequality only in so far as they give incentives to firms to reallocate skilled labor towards non‐production activities. In contrast, skill‐biased technological change of the sort usually considered in the literature does not affect wage inequality.