Regulation of Labour Markets in the European Union

EU regulation of labour markets under the Social Charter and Protocol to improve 'employment rights' may appear loudable but can prove costly for firms. Mandates will probably make the unskilled more difficult to employ.     

Fiscal Consolidation and Decentralisation: A Tale of Two Tiers*

This paper contributes to the established literature on fiscal consolidations by investigating the distinct behaviour of central and sub‐central tiers of government during general government consolidation attempts. In the light of different degrees of decentralisation across OECD countries, and the different responsibilities devolved to sub‐central tiers, we believe that this approach offers an illuminating insight into the analysis of fiscal consolidations and their success. We show that the involvement of the sub‐central tiers of government is crucial to achieving cuts in expenditure, particularly in relation to the overall size of the government wage bill. In addition, central governments appear to exert a strong influence on the expenditure of sub‐central tiers through their grant allocations, and control of these allocations appears to have a considerable impact upon the overall success of consolidation attempts. Finally, we demonstrate that there is a skewness in cuts towards sub‐central capital expenditure both when central governments cut grant allocations and when sub‐central governments engage in lone consolidation attempts.     

Intensity of R&D competition and the generation of innovations in heterogeneous setting

This paper discusses the role of technological spillovers and technological races in dynamic strategic interactions setup. Two firms invest simultaneously into new products creation and into further development of the quality of these products. Each firm may benefit from the costless technological spillover in case of technological leadership of the other firm. At the same time they cooperate in the joint creation of new products. Three different scenarios emerge: constant technological leadership, the technological leapfrogging and symmetric outcome with or without potential spillovers. R&D is maximal for the first scenario and minimal for the symmetric play under the threat of spillover with endogenous specialization of firms’ activities in cases of constant leadership and leapfrogging. Definition of technological competition intensity as inverse to the technology gap allows to recover inverted-U relationship between those two in a multidimensional context.     

Readying a region: temporally exploring the development of an Australian regional quadruple helix

Understanding how innovation drives regional development has important economic and social outcomes. Models such as Smart Specialisation and the quadruple helix are increasingly adopted given their sensitivity to place-based contexts. But although innovation processes are dynamic and facilitated by individuals’ interactions, our understanding of how these connections are developed and sustained during helix collaboration development remains under-investigated. This research adopts an action research approach, focused on a regional Australian case study, to test a multi-disciplinary conceptual framework exploring key human-centred, micro-processes driving quadruple helix development: trust building; power relationships; regional readiness; and time and sphere centrality. The findings demonstrate the interactive nature of these processes, with trust-building facilitating the deployment of power bases by critical innovation agents which then foments regional readiness for change, subsequently driving the helix spheres towards overlap. These processes were also driven by changing sphere centrality and unique regional temporal structures. Practically, these outcomes offer insights into the human capital dynamics of regional helix collaborations, particularly for identifying the key individuals required to drive their development.     

STRUCTURAL VECTOR AUTOREGRESSIONS: CHECKING IDENTIFYING LONG‐RUN RESTRICTIONS VIA HETEROSKEDASTICITY

Long‐run restrictions have been used extensively for identifying structural shocks in vector autoregressive (VAR) analysis. Such restrictions are typically just‐identifying but can be checked by utilizing changes in volatility. This paper reviews and contrasts the volatility models that have been used for this purpose. Three main approaches have been used, exogenously generated changes in the unconditional residual covariance matrix, changing volatility modelled by a Markov switching mechanism and multivariate generalized autoregressive conditional heteroskedasticity models. Using changes in volatility for checking long‐run identifying restrictions in structural VAR analysis is illustrated by reconsidering models for identifying fundamental components of stock prices.