Induced innovation: an empirical test

A method is developed to empirically test the hypothesis of induced innovation as it has been specified and used in the theoretical literature. A strong and a weak version of the hypothesis is tested using sectorial data from the USA, Canada, Germany, France and the UK. The strong version tests for the exact dependency of the relation between the change in factor-productivities on the one hand and relative prices and actual factor-productivities on the other hand. The weak version only tests for the direction of this dependency. In all countries the weak hypothesis is accepted in all sectors except in ‘electricity, gas, and water’. The strong hypothesis is accepted in about half of all sectors. It is rejected only in sectors, in which the degree to which progress is intentional is low.     

Employment effects of the provision of specific professional skills and techniques in Germany

Based on unique administrative data, which has only recently become available, this paper estimates the employment effects of the most important type of public sector sponsored training in Germany, namely the provision of specific professional skills and techniques (SPST). Using the inflows into unemployment for the year 1993, the empirical analysis uses local linear matching based on the estimated propensity score to estimate the average treatment effect on the treated of SPST programs by elapsed duration of unemployment. The empirical results show a negative lock-in effect for the period right after the beginning of the program and significantly positive treatment effects on employment rates of about 10 percentage points and above a year after the beginning of the program. The general pattern of the estimated treatment effects is quite similar for the three time intervals of elapsed unemployment considered. The positive effects tend to persist almost completely until the end of our evaluation period. The positive effects are stronger in West Germany compared to East Germany.     

Road accident external effects: an empirical assessment

The relationship between the number of road accidents and the volume of traffic is econometrically estimated in this paper. A stratified random sample of 399 road segments covering urban and rural roads in New York State(USA) in 1985 is analysed. No significant externality is detected. On ver high volume urban roads the marginal to average accident rate ratio is 1.06. On all other roads, a ratio of 0.98 is estimated. These findings contrast sharply with those of Vickrey, who estimated a ratio of 1.5 for California freeways in 1962. The results are, however, consistent with the ‘official view’ of both the US and UK highway authorities that no significant accident externality exists.     

The transferability of human capital: some empirical evidence for West Germany

One of the most important topics in the current debate on immigration policy is whether receiving countries should make immigration conditional upon the achievement of formal education by the would-be immigrant in the source country. The answer to this question depends, among other factors, on the transferability of schooling and professional education from the sending to the receiving region. The paper uses German household data of 1978, 1982 and 1989 to evaluate to what extent formal education acquired by the main immigrant groups (Italians, Yugoslavs, Turks) in their countries of origin leads to earnings advantages in Germany. Consistent with earlier research, an assimilation effect is found. The results also show that schooling and professional education lead to earnings advantages. However, income differences between the three immigrant groups can only partially be explained by differences in schooling and professional education. It is found that nonobservable characteristics such as motivation, talent and the dynamics of the migratory chain also play a major role. The results indicate that Germany and other European receiving countries could, in theory, increase their welfare by integrating qualitative restrictions along educational characteristics in their immigration policies. The size of the increase, however, would be limited because of the importance of nonobservable characteristics and declining transferability of human capital as the source composition of immigrants shifts towards less developed countries.     

Production and Employment Impacts of Biotechnology —Input-output Analysis for Germany

Biotechnology is often regarded as a key technology with high potential for far-reaching social, environmental and economic impacts. Among others, the development and diffusion of biotechnology may have considerable economic effects on production and employment. This paper analyses the economic impacts of different prospective diffusion paths of biotechnology in some major application fields for Germany. Bottom-up technology information from the literature, expert judgements and explicit scenario assumptions for various impact factors are combined and integrated in an input-output framework to calculate direct and indirect production and employment effects. The impact on net production and employment differs greatly between the different application sectors and depends on the respective importance of the various impact mechanisms. The indirect economic effects are rather high and exceed the direct economic effects. These findings show the importance of a bottom-up approach as well as the consideration of the indirect economic effects for appropriate analyses of the impact of biotechnology.     

An empirical analysis of intergovernmental tax interaction: the case of business income taxes in Canada

Both federal and provincial governments in Canada levy corporate taxes on businesses in their jurisdictions, which potentially gives rise to horizontal and vertical tax externalities within the federation. Using a simple model of interdependent tax choices, we estimate tax-setting functions for the federal government, Ontario, Quebec, and an aggregate of the remaining eight provinces. We find evidence of significant vertical and horizontal tax interactions. Provincial tax rates respond negatively to the federal tax rate, while at least some provinces increase their tax rates in response to increases in the tax rates of other provinces. JEL Classification: H25, H7
Une analyse empirique de l'interaction fiscale entre gouvernements: le cas des impôts sur les revenus d'affaires au Canada. Au Canada, les gouvernements fédéral et provinciaux collectent des impôts sur le revenu de sociétés sous leur jurisdiction. Voilà qui peut donner lieu à des effets externes horizontaux et verticaux à l'intérieur de la fédération. A l'aide d'un modèle de choix fiscaux interdépendants, les auteurs calibrent les fonctions d'imposition du gouvernement fédéral, des gouvernements du Québec et de l'Ontario, et d'une entité composée des huit autres provinces. On montre que les effets verticaux et horizontaux d'interaction fiscale sont significatifs. Les taux d'imposition des provinces réagissent négativement au taux d'imposition fédéral, mais certaines provinces accroissent leur taux d'imposition en réponse à des accroissements dans les taux d'imposition d'autres provinces.     

Productivity measures and effects from subsidies and trade: an empirical analysis for Japan's forestry

Several techniques have been proposed in the literature to measure productivity. While allowing for inefficiency of the production unit, we provide a methodological comparison of alternative approaches to measure total factor productivity. This article evaluates the effects of unintended policy outcomes such as government subsidies and foreign trade. Empirically, we analyse the forest productivity of timber in Japan by using panel data on 46 regions. The results suggest substantial variation in productivity between these two techniques although average trends are similar. We find that subsidies impede competition since the government is ready to rescue a loss-making firm with subsidies rather than allow it to close. In contrast, trade is shown to have positive effects on productivity.     

Employment effects of foreign acquisition

This paper investigates the employment effects of foreign acquisitions in acquired firms in Swedish manufacturing during the 1990s; a period characterized by a dramatic increase in foreign ownership. We find some evidence of positive employment effects in acquired firms and it seems that the employment of skilled labor increases more than that of less-skilled labor. Our results indicate that the positive employment effects are more pronounced in acquired non-MNEs than in Swedish MNEs. Furthermore, we observe shifts in skill intensities toward higher shares of skilled labor in non-MNEs taken over by foreign MNEs, but not in acquired Swedish MNEs.     

Employment effects of stabilization policies

This paper studies the effects of a stabilization program based on a reduction in the devaluation rate in an optimizing model with capital controls, minimum wages for unskilled labor, an informal sector, and public production of intermediate inputs. Perfect mobility across sectors of the unskilled labor force prevents the emergence of unemployment for that category of labor, but skilled unemployment prevails in equilibrium. The analysis highlights the role of endogenous labor market segmentation in assessing the wage and employment effects of stabilization policies.     

The role of quality standards in innovative service companies: An empirical analysis for Germany

Proceeding from theoretical hypotheses, driving forces for the introduction of the ISO 9000ff series in innovative service companies are analysed. Based on the European Community Innovation Survey (CIS), a probit model is estimated with different explanatory variables based on a sample of innovative German service companies. The first analysis of the role of the quality standard ISO 9000ff in German innovative service companies, based on general hypotheses concerning the role of quality standards, produced elucidating results. Besides sector- and size-specific differences, the use of “risky” technologies positively influences the probability of introducing ISO 9000ff. This quality standard has another twofold impact: First, as expected, it is a quality seal for the customers of the service company, especially in markets with homogeneous products and average qualities. Second, the introduction of ISO 9000ff has impacts on the internal processes of the service companies. In contrast to a conventional product standard, it supports the management in being flexible, especially towards the preferences of the customers and in reaching project deadlines. However, the introduction may also increase the pressure on the employees who are therefore evidently more reluctant about its introduction. Consequently, the empirical results underpin most of the theoretical hypotheses on the role of quality standards in service companies.     

Charitable giving among females and males: an empirical test of the competitive altruism hypothesis

We conduct a real-effort task experiment where subjects’ performance translates into a donation to a charity. In a within-subjects design we vary the visibility of the donation (no/private/public feedback). Confirming previous studies, we find that subjects’ performance increases, that is, they donate more to charity, when their relative performance is made public. In line with the competitive altruism hypothesis, a biology-based explanation for status-seeking behavior, especially male subjects increase performance in the public setting.     

The effects of monetary policy in the Czech Republic: an empirical study

In this paper, we examine the effects of Czech monetary policy on the economy within the vector auto regression (VAR), structural VAR, Bayesian VAR with sign restrictions, and factor-augmented VAR, frameworks. We document a well-functioning transmission mechanism similar to the euro area countries, especially in terms of persistence of monetary policy shocks. Subject to various sensitivity tests, we find that a contractionary monetary policy shock has a negative effect on the degree of economic activity and the price level, both with a peak response after one year or so. Regarding prices at the sectoral level, tradables adjust faster than non-tradables, which is in line with microeconomic evidence on price stickiness. There is no price puzzle, as our data come from a single monetary policy regime. There is a rationale in using the real-time output gap instead of current GDP growth, as using the former results in much more precise estimates. The results indicate a rather persistent appreciation of the domestic currency after a monetary tightening, with a gradual depreciation afterwards.     

An empirical test of the segmented labour market theory for the Netherlands

In this paper an orthodox segmented labour market theory (SLM theory)is tested by means of the data provided by the research project, Quality of Labour 1977 (Zanders et al., 1977). The segmented labour market theory is restricted to the dual labour market approach, although a major extension is taken into account (a primary segment consisting of two tiers). The segments are created by making use of an objectivemethod. Nine quality characteristics of jobs are taken into account. A number of logit estimations are carried out to test the competing theories of human capital and the segmented labour market. The conclusion is that although discrimination in the labour market appears to exist, the SLM theory has to be rejected.     

The effect of cash flow on investment: an empirical test of the balance sheet theory

Using a large data set on investments and accounting information for private firms, we put the balance sheet theory to test. We find that firm cash flow has a positive impact on investment and that the effect is enhanced for firms which are more likely to be financially constrained. We also find that the investment-cash flow sensitivity is significantly larger and more persistent during the first half of our sample period, which includes a severe banking crisis and recession. Our results suggest that financial constraints matter more in periods characterized by adverse economic conditions.     

The effects of land market development on economic growth： an empirical analysis based on Chinese panel data, 1999-2005

Optimized land resources allocation is important for economic growth because land is one of the basic elements for economic development. And urban land resources allocation has had an increasingly important influence since the Chinese socialist market economy system was established. This paper estimates the production function of both the secondary and the tertiary industries of China＇s 31 provinces, autonomous regions and municipalities directly under the central government through an analysis of the panel data of the total output value of the secondary and the tertiary industries, invested capital, invested labor jorces and the land market-jeatured management of the above-mentioned regions during the period of 1999-2005. and examines the positive influence of the above- mentioned factors on regional economic output, This study concludes that urban economic output is positively related with the level of urban land resources market-featured management, since the rate of economic growth of those regions approximates 14. 7% under the condition of urban land market running during the period of 1999-2005.     

An empirical test of monopoly behaviour: an application to the Hardwood case: a comment

A recent article in this journal, Alexander (1988), tests whether the exchange of price information in the 1921 Hardwood case was a means of fixing prices or a way of coping with costly information. Alexander makes two serious errors. Both errors involve the incorrect use of a technique used to measure price-cost margins to determine the extent to which an industry is monopolistic, competitive, or somewhere in between. I reestimate Alexander's model correcting his two errors. In addition, I improve his data set. Alexander's conclusion that the price association was pro-competitive, although drawn incorrectly, is shown to be correct.     

Fiscal dependence on trade taxes and economic development: additional results and a reconciliation of the empirical evidence

Using Brazilian data spanning the period 1910–75,new evidence is presented on the hypothesis that a country's fiscal dependence on trade taxes is inversely related to her level of economic development, at least once the latter passes a certain threshold. Unlike previous studies, this study uses methods which highlight the dynamic and temporal nature of the underlying relationships. The results indicate strong support for the hypothesis and also suggest that the conflicting time-serious evidence can be reconciled.     

The effects of unions on research and development: an empirical analysis using multi-year data

A link between unionization and research and development rates (research and development expenditures divided by output) is tested for in thirteen aggregate Canadian industries. A balanced panel of thirteen industries covering 1968 to 1986 reveals a negative relationship between industry unionization rates and research and development. The results hold when a number of techniques are used to control for unobserved industry heterogeneity and non-linear responses to unionization. In an industry that moves from the 25th to the 75th percentile of unionization, research and development is predicted to fall by about 40 per cent. JEL Classification: J51
Les effets des syndicats sur l'intensité de la recherche et développement: une analyse empirique sur plusieurs années . Ce mémoire examine le lien entre le degré de syndicalisation et les taux de dépenses en recherche et développement en proportion de la production dans treize industries canadiennes. Pour ces treize secteurs industriels, entre 1968 et 1986, il semble qu'il y ait une relation négative entre les taux de syndicalisation et les taux de dépenses en recherche et développement. Ces résultats sont robustesmême quand on utilise des techniques pour tenir compte de l'hétérogéneité des secteurs et des réponses non linéaires à la syndicalisation. Pour une industrie qui voit son taux de syndicalisation passer du 25e au 75e percentile, on prévoit une chute de 40% dans la recherche et développement.