Welfare effects of unbundling under different regulatory regimes in natural gas markets

In this paper, we develop a theoretical model that enriches the literature on the pros and cons of ownership unbundling vis-à-vis lighter unbundling frameworks in the natural gas markets. For each regulatory framework, we compute equilibrium outcomes when an incumbent firm and a new entrant compete à la Cournot in the final gas market. We find that the entrant’s contracting conditions in the upstream market and the transmission tariff are key determinants of the market structure in the downstream gas market (both with ownership and with legal unbundling). We also study how the regulator must optimally set transmission tariffs in each of the two unbundling regimes. We conclude that welfare maximizing tariffs often require free access to the transmission network (in both regulatoy regimes). However, when the regulator aims at promoting the break-even of the regulated transmission system operator, the first-best tariff is unfeasible in both regimes. Hence, we study a more realistic set-up, in which the regulator’s action is constrained by the break-even of the regulated firm (the transmission system operator). In this set-up, we find that, for a given transmission tariff, final prices in the downstream market are always higher with ownership unbundling than with legal unbundling.     

Contractual design and networks performance: empirical evidence from franchising

This article, deals with the links between networks performance and the design of vertical contracts. It provides evidence broadly consistent with the hypothesis that within franchising systems, constraining contracts for the retailers favour a better performance at the network level.     

Fighting terrorism in Africa: evidence from bundling and unbundling institutions

Empirical Economics - This study assesses government mechanisms in the fight against terrorism with particular emphasis on the bundling and unbundling of ten governance dynamics. The empirical...     

Income taxes and entrepreneurial choice: empirical evidence from two German natural experiments

Does tax policy affect entrepreneurial choice? We use two tax reforms in Germany as “natural experiments”. These reforms reduced the marginal income tax rate for entrepreneurs with income above a certain threshold, with the exception of freelance professionals. The two conditions for belonging to the treatment group allow us to apply a “difference-in-difference-in-difference” identification strategy to estimate the effects of the tax rate reductions. We base our analysis on the microcensus, the official representative continuous household survey in Germany. The results indicate that the tax rate reductions increased the probability of choosing self-employment.     

Price transmission and local market power: empirical evidence from the Austrian gasoline market

We analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics (speed and asymmetry of price transmission) using data for a large number of individual gasoline stations in Austria. Specific attention is paid to threshold effects in price adjustment. Our results clearly suggest that the speed of price transmission between the Brent crude oil index and retail diesel prices is higher in a more competitive environment. While evidence on the relationship between local market power and asymmetries in the speed of price adjustment is mixed, our findings regarding asymmetries in price thresholds are clear: in regions where competition from neighbouring rivals is weak and/or consumers’ price elasticity of demand is low (stations located on the highway), positive thresholds significantly exceed negative ones, which corresponds to the ‘rockets and feathers phenomenon’. As expected, we observe that prices are lower in more competitive local markets.     

Natural gas,trade and sustainable growth: empirical evidence from the top gas consumers of the developing world

Natural gas is the key non-renewable source of energy for a low-carbon economy. The research applies heterogeneous panel techniques to investigate the impact of natural gas consumption on economic growth across a panel of top 15 natural gas consumers of the developing world. We establish long-run dynamics with cross-sectional dependence and heterogeneity across the sample countries. The long-run output elasticities suggest that the natural gas consumption and trade variables have significant positive effect on the output in a panel of developing economies. Further, we establish feedback relationship among gas consumption, output and trade in the short-run. Given the significance of natural gas as the low-emission source of energy, we suggest governments and policy advisers of these major natural gas consumers to focus on developing pipeline infrastructure for adequate supply, reforming natural gas sector with a competitive price structure to combat excess demand in individual natural gas market. With trade integration, majority of these countries need to incorporate these initiatives to improve the technologies such as combined cycle power plant technology and value-added chemical production technology to achieve sustainable economic growth.     

Poverty dynamics: empirical evidence for Canada

Abstract. Poverty (low income) dynamics are explored using tax filer data covering the period 1992 to 1996. The distributions of short‐ and long‐term episodes are identified and reveal substantial differences by sex and family type. Entry and exit models explore the relationships between poverty transitions and sex, family status and other personal and situational attributes. Duration effects on exiting and re‐entering poverty are found to be important, and models including past poverty experiences point to strong ‘occurrence dependence’ for poverty entry and incidence. Fixed‐effect panel data models confirm the above and reveal asymmetries in the impacts of household transitions on poverty. JEL Classification: I3 La dynamique de la pauvreté : résultats empiriques pour le Canada. Les auteurs examinent la dynamique de la pauvreté(bas revenus)à l’aide des données disponibles pour les citoyens qui ont soumis leurs rapports d’impôt entre 1992 et 1996. On identifie les distributions d’épisodes (courts et longs) de pauvreté, et celles‐ci révèlent des différences significatives selon le sexe et les attributs familiaux. Les modèles d’entrée et sortie identifient les relations entre le statut de pauvreté, le sexe, le statut familial, et d’autres attributs personnels et situationnels. Il appert que les effets de durée sur les périodes de sortie et de ré‐entrée dans un statut de pauvreté sont importants; les modèles qui prennent en compte les épisodes de pauvreté antérieurs montrent qu’il y a une forte corrélation (occurrence dependence) tant pour le passage au statut de pauvreté que pour l’incidence de tels épisodes. Les résultats des études transversales confirment ces résultats et révèlent des asymétries dans les impacts des transitions dans les ménages sur la pauvreté.     

Aid-growth nexus: empirical evidence from Fiji

Foreign aid to the island economies is a major source for foreign exchange and resource needs. This paper presents an empirical analysis of the relationship between foreign aid and economic growth in the case of Fiji. A neoclassical production function is applied to estimate the aid-growth nexus. Since the data employed are time series for the period 1968 to 1996, the Autoregressive Distributed Lag approach to cointegration is utilized to estimate the models. Components of total aid, such as grant aid, loan aid, technical cooperation, bilateral and multilateral aid flows are also utilized to estimate a disaggregated short-run and long-run relationship between foreign aid and economic growth. The results show that total aid flows and its various forms, i.e. bilateral aid, grant aid and technical cooperation grant aid, has a significant impact on economic growth in Fiji. As for domestic resources, only exports and private investments in two equations show positive contribution to growth.     

Real convergence: empirical evidence for Latin America

This article investigates the real convergence of 17 Latin American countries to the US economy for the period 1950 to 2011. Time series methods are used to test stochastic and β-convergence. These methods include the possibility of one or two structural changes. The results show that when endogenous structural changes are considered several Latin American countries exhibit stochastic convergence. Nevertheless, real convergence to the US is found only for three Latin American countries: Chile, Costa Rica and Trinidad and Tobago, with these countries also presenting evidence of stochastic and β-convergence.     

Corruption and economic growth: New empirical evidence

The nexus between corruption and economic growth has been examined for a long time. Many empirical studies measured corruption by the reversed Transparency International's Perception of Corruption Index (CPI) and ignored that the CPI was not comparable over time. The CPI is comparable over time since the year 2012. We employ new data for 175 countries over the period 2012–2018 and re-examine the nexus between corruption and economic growth. The cumulative long-run effect of corruption on growth is that real per capita GDP decreased by around 17% when the reversed CPI increased by one standard deviation. The effect of corruption on economic growth is especially pronounced in autocracies and transmits to growth by decreasing FDI and increasing inflation.     

Stability analysis and efficiency determinants: empirical evidence

Efficiency determinants analysis is a main contemporary component in the productive efficiency literature. Two-stage data envelopment analysis (DEA) procedure supposed a turning point in the methodology as the significance of a certain exogenous factor can provide policymakers with accurate information for future strategic decisions, but a deeper scrutiny into the importance of each factor remains unsettled. This article provides a novelty theoretical extension and empirical application for the two-stage DEA bootstrap procedure. We define the stability coefficient (SC) whose magnitude reveals the effect of each exogenous factor in the efficiency estimates. We present empirical evidence to examine the hypothesis that the efficiency of the 17 Spanish tourism regions for the average period data 2005–2013 is determined by a group of contextual variables, illustrating how the SCs strengthen knowledge concerning the significance of each potential attractor. The results help us to classify the significant attractors into strong and weak, accordingly enhancing the public or private decision process, and henceforth avoiding the wastefulness of decision-making units spending.     

The spectre of deflation: a review of empirical evidence

Abstract What explains the widespread fear of deflation? This article reviews the history of thought, economic history, and empirical evidence on deflation, with a view to answering this question. It also outlines informally the main effects of deflation in applied monetary models. The main finding is that – for both historical and contemporary deflations – there are many open, empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally.     

Disagreement in inflation expectations: empirical evidence for Colombia

The literature on expectation disagreements in emerging economies is scarce. This paper examines the disagreements in inflation expectations for the Colombian economy during the 2010–2017 period. We combine empirical tests with an analysis of a monthly survey of expectations of financial analysts in Colombia to obtain valuable evidence to formulate guidelines on the expectations modelling in developing economies. The findings indicate that disagreements present inertia and that inflation volatility increases disagreements. However, the central bank’s stance, as established through a press release, can reduce disagreement. Moreover, if central bank communication is clear and there is a credible inflation target, there tend to be fewer disagreements.     

Nanotechnology as general-purpose technology: empirical evidence and implications

Developments in nanotechnology are poised to have a pervasive effect on various industries for years to come and nanotechnology management research is beginning to appear in peer-reviewed management journals. Much of the research on this early, emergent technology is focused on issues of definition and identification of technology type. In this study, we searched the US Patents and Trademarks Office database and used an expert validation methodology to develop a sample of the first 25 years (1980–2004) of nanotechnology patenting activity. We analysed this data for early evidence that nanotechnology is a general-purpose technology (GPT) – a transformative technology characterised by its pervasiveness, improvement over time, and pattern of diffusion. Our findings indicate that nanotechnology patenting activity has been growing in intensity and relative to overall patenting activity, and that it is pervasive across industry and technology sectors. Implications of nanotechnology as a GPT are discussed.     

Export expansion and economic growth: Further empirical evidence

This paper examines the relationship between export expansion and economic growth in a sample of seventy-three developing countries, using data for the period 1960–1978. It shows that in both groups of low- and middle-income countries, export expansion is associated with better economic performance and that an important cause of this association is the favorable impact of exports on total factor productivity. The paper also demonstrates that the effect of commodity composition of exports on the relationship between export expansion and economic growth is substantial in more advanced developing economies.     

Globalization and labor market institutions: International empirical evidence

A widespread concern is that labor market institutions erode in the course of globalization, which, in turn, decreases employment and wages. By using panel data and cross-sectional data, I investigate the influence of globalization on labor market regulation. I use the indicators of labor market institutions by Gwartney et al. (2012) and the KOF indices of globalization. To deal with potential reverse causality, I employ a system GMM panel estimator and use a constructed trade share as proposed by Frankel and Romer (1999) as an instrumental variable for globalization in cross-sectional models. The results do not show that globalization induced labor market deregulation.     

Electoral cycles in perceived corruption: International empirical evidence

I examine whether elections influence perceived corruption in the public sector. Perceived corruption in the public sector is measured by the reversed Transparency International's Perception of Corruption Index (CPI). The dataset includes around 100 democracies over the period 2012–2016, a sample for which the CPI is comparable across countries and over time. The results show that the reversed CPI was about 0.4 points higher in election years than in other years, indicating that perceived corruption in the public sector increased before elections. The effect is especially pronounced before early elections (1.0 points) compared to regular elections (0.4 points). Future research needs to investigate why perceived corruption in the public sector increased before elections.     

Foreign bank ownership and income inequality: empirical evidence

ABSTRACT

Using country-level panel data over 1995–2013 on within-country income inequality and foreign bank presence, this paper establishes a positive relation between the two, running from higher foreign bank presence to income inequality. Given that foreign bank participation increased by 62% over the period 1995 to 2013, our baseline results imply a 5.8% increase in the Gini coefficient on average over this period, ceteris paribus. These results are robust to the inclusion of country and year fixed effects and to the use of restrictions on foreign bank entry in the host countries as an instrumental variable. We show that this positive effect is channelled through the lack of greenfield entry and the associated lower levels of competition.