Disentangling economic crisis effects from environmental regulation effects: Implications for sustainable development

With climate change becoming more severe, policy makers must impose environmental regulations that will lead firms to adopt sustainable corporate models. According to the Porter hypothesis, environmental regulation can favour the implementation of business strategies that improve economic and environmental performances. In this study, we examine how one such form of regulation, the European Union Emission Trading Scheme (EU ETS), impacts firm performance, and we subsequently widen the examination beyond the regulation to evaluate an economic crisis which could potentially confound regulation effects. We estimate a panel model with time- and firm-fixed effects for different subsamples that disentangle the effect of the EU ETS policy from the 2008 economic crisis. The results indicate that the EU ETS policy in its third phase can activate the Porter hypothesis and is effective in fuelling the implementation of sustainable corporate models by firms. However, we also find that the economic crisis neutralises the effects of the regulation on firm performance, precluding the triggering of the Porter hypothesis in severely affected firms.     

Globalisation,industrial diversification and productivity growth in large European R&D companies

This paper aims to assess the impact of both geographic and industrial diversification of economic activities on the productivity performance of large European R&D Multinational Enterprises (MNEs). Based on the worldwide subsidiaries of these firms, we measure the performance of the firms according to their level of industrial diversification and globalisation that we proxy with the presence and importance of subsidiaries in the EU, North America and Asia–Pacific regions. The sample consists of large R&D firms that represent about 80 % of total European R&D. In general, the results indicate a positive impact from globalisation on firms’ R&D productivity, especially in the US, while a negative impact for industrial diversification is found.     

‘Breaking the ICE’: workplace democracy in a modernized social Europe

The EU seeks to improve its labour market performance through implementing the Lisbon and European Employment Strategies which encourage the modernization of work organization through the development of partnership with the assistance of an ‘appropriate’ regulatory framework. Key aspects of this latter framework concern workers' rights regarding information, consultation and participation in corporate governance. European labour laws, introduced in the 1970s, sought to strengthen employers' consultation with their workforce and, more recently, the changing economic, technological and organizational environment has returned issues related to workplace democracy to the top of the social policy agenda. Here we evaluate the significance of the new Directive on Information and Consultation with Employees (ICE) within the context of this planned modernization of European social policy. In doing so, we re-examine the historical development of workers' consultation laws in Europe and assess the economic rationale for regulating workplace social dialogue in an enlarged Social Europe.     

Adjusted indicators of quality and equity for monitoring the education systems over time. Insights on EU15 countries from PISA surveys

In this work, we investigate how European countries belonging to EU15 are performing in terms of the quality and equity of their educational systems. To do so, we jointly analysed student competencies in mathematics and reading using data collected in four different waves (2006, 2009, 2012, 2015) by the Program for International Student Assessment (PISA) run by the Organisation for Economic Cooperation and Development (OECD). The aim of this analysis is twofold: (i) to assess the associations between students' competencies inmathematics and reading and their socioeconomic status and to investigate how this relationship varies across countries over time; (ii) to present a batch of adjusted indicators relevant to the investigation of educational performance over time in terms of quality (average student competencies) and equity (low association between student achievement and their socioeconomic backgrounds). We fitted a mixed-effect (multilevel) regression model with a bivariate latent structure and random intercepts and slopes to assess the effect of socioeconomic and cultural background on student competencies across countries over time and to assess the performance trajectories of EU15 countries with respect to European Commission benchmarks. We present and discuss our main findings and their implications in terms of the policies of EU15 countries.     

European Periphery Crises,International Financial Markets,and Democracy

This article analyzes the origin and causes of the recent economic and financial crises, mainly for the countries located in the periphery of the European Union (EU), as well as their evolution and transformation into social, political, and institutional crises. After explaining the differential impact of the crises on EU economies, we analyze how the economic policies developed thus far not only are unable to resolve the current crisis pattern but also actually entail a risk to the present democratic models by transferring the legitimate control over governments from citizens and democratic parliaments to unelected, nonrepresentative international financial markets.     

R&D subsidies and productivity in eastern European countries

This paper shows that R&D subsidy policies at the European Union (EU) and national levels stimulated labor productivity in Central and Eastern European countries (CEEC) in the years after their entry to the EU. However, the average impact of national funding on labor productivity was higher for countries in the Western control group than in the CEEC sample. EU R&D subsidies compensated the CEEC in part for the greater innovation impact of Western economies. Although they crowded out some R&D subsidies by local governments at the country level, the EU subsidies crowded in many national and local subsidies at the firm level. Local/regional state innovation aid to enterprises encouraged no increase in labor productivity in all but one of the sample CEEC countries. These impacts are assessed in a sequential structural econometric model estimated using Eurostat’s collection of Community Innovation Surveys covering the years 2006–2014.     

Economic cohesion and development of the European Union's regions and member states - A methodological proposal to measure and identify the degree of regional economic cohesion

The EU cohesion policy seeks to mitigate imbalances between countries and regions and enhance greater economic development of the whole Union. However, notwithstanding its efforts and certain progress on this issue, territorial disparities still represent an open challenge for the European Union, which requires improving the cohesion policy, particularly regarding its measurement, in order to allocate resources more efficiently.This article aims to propose an innovative methodology to measure and identify the degree of cohesion of both EU NUTS-2 regions and member states in economic terms. To this end we first selected the main indicators which would better explain GDP per capita growth by applying factor analysis; and second, we measure the degree of cohesion as the relationship between economic development and its potential attributable to the inequalities detected in the selected set of indicators. To ensure the robustness of this research, we compared the results obtained by applying the Gini, Atkinson, and Theil indexes. Finally, the Economic Cohesion Index (ECI) has been elaborated in order to identify regions that, regardless of their economic development, still present a very low level of cohesion within the group in which it is compared.The main findings indicate that the 27 EU countries are quite cohesive. On the contrary, from the regional perspective, the study shows important imbalances between economic development and its potential that mainly affect the regions of Greece, Spain, and Italy, where Greece is the leading country among less developed regions and Spain and Italy among more developed.     

Greece in the European Union: policy lessons from two decades of membership

This paper examines the first two decades of Greece’s experience as a member of the European Union (EU). In evaluating the Greek experience within the EU, we derive three fundamental policy lessons that apply both to similar small peripheral countries now entering the EU and to the EU itself in terms of facilitating their integration in a large economic area. First, small peripheral countries that enter the EU must address the structural deficiencies of their economies before entry in order to minimize the impact of increased competition after the removal of trade protection, and follow domestic policies that maintain and promote their comparative advantage within the EU. Second, the Convergence Criteria have proven to be a successful mechanism for countries with a poor historical policy record to achieve macroeconomic stability, as shown by the case of Greece. Third, common EU policies can be very helpful in facilitating structural reforms in small peripheral economies. However, these policies must be continuously evaluated and improved so that their effectiveness is maximized.     

Prospects for an ordoliberal reform of the European Union

This article discusses the prospects for an ordoliberal reform of the European Union in order to tackle its multiple crises. It shows what an ordoliberal European Union would have to look like and examines the constraints its implementation faces. Three reasons are identified that make an ordoliberal reform of the EU at present unlikely. First, in the EU's most powerful member state, Germany, where ordoliberalism has its origins, economic policy adheres increasingly less to this strain of economic thinking. Second, given the primacy of European integration in domestic politics, Germany values European unity higher than economic principles. Third, once Brexit is complete Germany will lack influential allies for an ordoliberal reshaping of the EU.     

Benchmarking institutional variety in the eurozone: An empirical investigation

The European debt crisis has shown that the future of the European Union (EU) depends on the willingness of each member country to implement responsible policies, avoid moral hazard and uncooperative attitudes, and ensure stability and soundness. However, the European institutional variety means that each member country reacts differently to shocks and policies, follows a different path of recovery, and adapts to common institutions, including the common currency, in different ways. Helping countries to converge toward a situation that guarantees well-being, stability, and development at the national and community level is the goal of the European benchmark. This benchmark is a framework inspired by European treaties that, through the distance-to-frontier score methodology, aims to measure member countries’ performance and identify inefficiencies and negative externalities within the economic, social, and political institutions of each member country. The paper presents an empirical investigation of the European benchmark. Based on the results obtained, all countries can improve their performance, and none of them can be considered a model for the others. However, the Mediterranean and post-communist countries have more challenges to face and therefore need to make greater efforts.