The management function of entrepreneurs and countries’ productivity growth

This article examines the determinants of the equilibrium number of entrepreneurs and the level of productivity in economies where individuals make occupational choices between being self-employed or working as an employee. The results of the theoretical model explain some observed empirical regularities, such as the negative association between productivity and self-employment rates in cross-country data. The article also derives and empirically tests an unexplored relationship between entrepreneurship and economic growth, in the form of a positive association between productivity growth in t and the proportion of the self-employed in t???1, providing a new perspective on cross-country productivity convergence over time.     

Assessment of the effect of the financial crisis on agents’ expectations through symbolic regression

Agents’ perceptions on the state of the economy can be affected during economic crises. Tendency surveys are the main source of agents’ expectations. The main objective of this study is to assess the impact of the 2008 financial crisis on agents’ expectations. With this aim, we evaluate the capacity of survey-based expectations to anticipate economic growth in the United States, Japan, Germany and the United Kingdom. We propose a symbolic regression (SR) via genetic programming approach to derive mathematical functional forms that link survey-based expectations to GDP growth. By combining the main SR-generated indicators, we generate estimates of the evolution of GDP. Finally, we analyse the effect of the crisis on the formation of expectations, and we find an improvement in the capacity of agents’ expectations to anticipate economic growth after the crisis in all countries except Germany.     

On the assessment of the performance in earnings management for the banking industry: the case of China’s banks

Earnings management is popular in the banking industry. Earnings can be manipulated by discretionary loan loss provisions (DLLP). Analysing the trajectories of banks’ DLLP (i.e. their change in DLLP over time) is an effective way to assess the performance in earnings management for the banking industry, but seems not to have been addressed in the earnings management literature. In this study, we analyse the trajectories of DLLP with the yearly data from 2007 through 2012 for four types of banks in China. The results have indicated that state-owned banks, policy banks and city commercial banks seem to manage earnings well. Cautionary notes about bank risks are provided.     

The effect of city size on the urban income distribution through time: 1950–70

In the literature on the urban income distribution two important questions have been ignored. First is the question of the appropriateness of hypotheses testing on samples of SMSAs with broad ranges of populations sizes. The second question is the stability of the effects of city size and other determinants on the urban income distribution through time. This stability is crucial to the propriety of drawing policy implications from previous studies which have employed data from only a single point in time. This study finds that hypotheses tests are sensitive to the size classes of cities being examined, and hence the results of hypotheses tested for SMSAs with broad ranges of population may be misleading. The present analysis also reveals that significant structural changes have taken place in the standard linear model over time, and therefore inferences regarding the future from past studies should be viewed with caution.     

On the nature and role of financial systems in Keynes’s entrepreneurial economies

In his debate with Bertil Ohlin, Keynes observed that entrepreneurs, when deciding to invest, have to be sure they will access the amount of finance necessary to initiate the investment process and that they will be able, when the time comes, to fund their debts in ways that are adequate to the profile of assets they are purchasing. In this statement, Keynes outlines the functions of financial systems in Entrepreneurial Economies, the type of economies he hypothesizes we live in. In entrepreneurial economies, investing firms have to be able to get hold of the necessary amount of means of payment required to purchase or order investment goods and to build balance sheets where in- and outflows of cash are broadly matched within reasonable margins of safety. This means that financial systems’ primary role in Keynesian economics is not to allocate savings or capital but to allocate liquidity and to allow investors to build liquid balance sheets. The article develops this proposition, presenting Keynes's basic concepts on the matter and showing how modern financial systems perform their role.     

On the joint effect of technological and management innovations on performance: increasing or diminishing returns?

Most studies on innovation are aimed at covering technological innovation, neglecting other modes of innovation based on non-technological drivers. The latter, referred to as management innovation, consists of the implementation of new management practices, processes or organisational tasks. This work advances knowledge on the topic by exploring the joint effect of simultaneously introducing technological and management innovations on performance. Based on an analysis of 12,563 Spanish firms drawn from CIS data, our findings suggest that firms frequently pursue the simultaneous or joint introduction of both technological and management innovations and that integration impacts positively on a firm’s performance, evidencing an inverted U-shape that suggest positive but diminishing returns. A theoretical framework using the capability-based view embraces the emerging conversation on management innovation issues and its relationship with the well-researched technological one.     

Determinants of bank’s interest margin in the aftermath of the crisis: the effect of interest rates and the yield curve slope

Empirical Economics - This paper analyses the determinants of net interest margin, focusing on the impact of interest rates and the slope of the yield curve, using a broad panel of data from 32...     

The true effect of students’ employment on the duration of studies

We examine the effect of the first-degree students’ employment on the prolongation of their studies. When employing a popular instrumental variable, the regional unemployment rate, we find a negative impact of students’ employment on duration of studies. Then, adding a predetermined IV – the individual’s employment prior to the beginning of academic studies – turns the estimate positive. Furthermore, we find that the relationship between the extent of students’ employment and duration of their studies depends on their age: among the younger students (aged 22–26), the extent of employment has no effect on the duration of studies, while among the older students, the effect is positive and statistically significant.     

The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital*

In this paper, we address the determinants of clean energy inventions by 946 large firms. We use a new set of large firms’ patent portfolios and we broaden and deepen existing literature on this issue in two main ways: first, we conduct our study directly at the firm level and not at the industry or national levels and second, we do not focus on a single industry but encompass all industrial sectors. Drawing on firm (internal and external) knowledge and knowledge accumulation, we show there is a robust positive association between the (past) knowledge accumulated capital related to clean technologies and the number of inventions produced in that field, even after controlling for industry and nation fixed effects and other factors. The same relation works for (past) knowledge-accumulated capital in other (non-clean) technologies. However, the relation’s impact on the number of clean inventions produced is much lower. The magnitudes of our coefficient are in line with that obtained previously on firms in the auto-industry or at the sectoral level.     

Assessing the effect of educational programs on public schools’ performance

This paper provides evidence on the effectiveness in the implementation of an educational program which offered public schools in Catalonia (Spain) the opportunity to improve the quality of educational provision. We employ a difference-in-differences approach on rich balanced panel data of public schools. The results confirm that the program did effectively improve students’ achievement and reduce absenteeism, albeit not for all modules and school types or across all years. Our results highlight that it is important to condition the delivery of resources upon specific academic goals depending on the characteristics of the treated population. Additionally, program results suggest the need to enhance educational program design in order to get better evaluation feedback.

Abbreviations: DoE: Department of Education; EU: European Union; PMQCE: Projecte per a la Millora de la Qualitat dels Centres Educatius; DiD: Differences-in-Differences; SFDC: Schools Facing Disadvantaged Conditions; OECD: Organization for Economic Co-operation and Development; REA: Regional Educational Authority     

International spillovers of ECB’s unconventional monetary policy: the effect on Central Europe

We examine how unconventional monetary policy of the European Central Bank (ECB) influences macroeconomic stability in three Central European economies. We estimate various panel vector autoregressions (PVARs) using monthly data from 2008 to 2014. Using the shadow policy rate and central bank assets as measures of unconventional policies, we find that output growth and inflation in Central Europe temporarily increase following an expansionary unconventional monetary policy shock by the ECB. Using both impulse responses and variance decompositions, we find that the effect of unconventional policies on output growth is much stronger than the effect on inflation.     

Board of directors’ quality and firms’ debt financing: the moderating effect of insider ownership – evidence from Omani firms

This study aims to examine the direct effects of board of directors’ quality and insider ownership on firms’ capital structure and the moderating effect of insider ownership on the relationship between board of directors’ quality and firms’ capital structure. The sample of this study consists of the time period 2005–2011. The final sample consists of 535 firm-year observations of public nonfinancial firms listed on the Muscat Securities Market (MSM). The hypotheses are tested using a random effects model. The results reveal that the coefficient sign on the board of directors’ quality is as predicted, but the coefficient sign is insignificant. Further, the results show that insider ownership is positively associated with leverage at the significant level of 10%, suggesting that the inside substantial shareholders employ higher leverage. With regard to the moderating effect of insider ownership, the findings show that the effect of the board of directors’ quality-leverage relationship becomes negative and stronger with increasing insider ownership.     

Modelling the effect of national culture on countries’ innovation performances: A conditional full frontier approach

This paper provides empirical evidence of the link between countries’ cultural factors and innovation performance. By defining innovation process in a knowledge production framework it uses conditional and unconditional Data Envelopment Analysis (DEA) models together with data from the European Innovation Scoreboard for the year 2007 and Hofstede’s cultural indexes. In this way it models and measures the effect of cultural values on 25 European countries’ innovation efficiency levels. The empirical results reveal that national culture can impact countries’ innovation performance. Specifically, we find significant negative effects on countries’ innovation efficiency levels for countries with higher power distance and uncertainty avoidance values.     

Learning through games? Evaluating the learning effect of a policy exercise on European climate policy

One of the arguments for the use of simulation-gaming approaches in policy appraisal has consistently been their potential to stimulate learning. Yet few studies seek to ascertain the learning effects of these methods in a systematic manner; on the whole, participants' learning from interactive appraisal processes remains both under-conceptualised and under-evaluated. This paper seeks to contribute to filling this gap by developing a typology of learning effects (cognitive, relational, and normative) that can be expected from policy games. We subsequently present a set of tools for measuring them and test our approach on the case of a policy exercise on burden sharing in future European climate policy involving policy-makers and experts.On the basis of our measurements, we found limited evidence for learning from the policy exercise, mostly in the cognitive and the relational domain. In this context, the use of concept maps is an interesting methodological innovation. Employed as pre- and post-measurements, they proved a useful tool for tracing conceptual change through the exercise among participants. The paper concludes with a plea for more systematic assessment of the learning effects of interactive appraisal exercises, with a view to enabling a deeper discussion on the benefits and limitations of these methods.     

Illuminating the need for ecological knowledge in economic valuation of mangroves under different management regimes — a critique

This is a commentary on a paper by Gilbert and Janssen (Gilbert, A.J., Janssen, R., 1998. Ecol. Econ. 25, 323–346) that deals with valuation of management alternatives for the Pagbilao mangroves, Philippines. Our main critique focuses on the undervaluation of fisheries as well as the inability to quantify the value of ecological services and internalize aquaculture's environmental costs. In addition, the sustainability criteria set up for the aquaculture management alternatives is open to debate. These weaknesses affect the result of Gilbert and Janssen's analysis so that the value of the unexploited mangrove forest is underestimated, and the value and sustainability of converting the forest into aquaculture ponds are overestimated. If applied to decision-making, the erroneous results from this partial cost–benefit analysis may have dire consequences for the mangroves and coastal communities of Pagbilao.     

Marcelo Diamand’s contributions to economic theory through the lens of the classical Keynesian approach: a formal representation of unbalanced productive structures

Abstract:

We examine both conceptually and in formal terms the contributions by the structuralist economist Marcelo Diamand, which all revolve around the notion of unbalanced productive structure, and its implications on income distribution, the general price level, and output dynamics in Latin American countries, with a special focus on Argentina. We argue that Diamand’s work provides a very useful framework to understand why institutionally and historically determined real wage and real exchange rates can, on the one hand, explain the relatively low productivity of the industrial sector and, on the other hand, cause devaluations to be both inflationary and contractionary, as has been the case in many Latin American countries that attempted to initiate an industrialization process by import substitution.     

The persistence of firms’ knowledge base: a quantile approach to Italian data

The paper investigates the patterns of persistence of innovation and of the properties of firms’ knowledge base (KB) across a sample of Italian firms in the period 1998–2006. The analysis draws upon a theoretical representation of knowledge as a collective good, stemming from the recombination of knowledge bits that are fragmented and dispersed across economic agents. On this basis, we derived properties of the KB like the coherence, the cognitive distance and the variety, and investigated their patterns of persistence over time. The empirical analysis is implemented by exploring the autocorrelation structure of such properties within a quantile regression framework. The results suggest that the properties of knowledge are featured by somewhat peculiar patterns as compared with knowledge stock, and that such evidence is also heterogeneous across firms in different quantiles.     

Building the minimum wage: the distributional impact of Germany’s first sectoral minimum wage on wages and hours across different wage bargaining regimes

The first minimum wage in Germany was introduced in 1997 for blue-collar workers in sub-sectors of the construction industry. In the setting of a natural experiment, blue-collar workers in neighboring 4-digit industries and white-collar workers are used as control groups for differences-in-differences-in-differences estimation based on linked employer–employee data. Estimation results reveal a sizable positive impact on mean wages in East Germany, but no significant effect in West Germany. Size and significance of effects are neither homogeneous across wage regimes (individual vs. collective contracts) nor across the distribution. The patterns suggest a compression in the lower part of the wage distribution and spillover effects to wages where the minimum is not binding, even in West Germany, where the bite of the MW was low. No effects on hours of work or substitution between workers of different qualification levels are found.     

The effect of parental background along the sons’ earnings distribution: does one pattern fit for all?

This article sheds light on the differences in the mechanisms generating intergenerational inequality in the four largest Euro Area economies (Spain, Italy, Germany and France) looking at the association between parental background and sons’ earnings along the sons’ distribution. We find that in all countries returns to parental background increase along the sons’ earnings distribution and the probability of ending up in high deciles is significantly correlated with parental background. However, although these findings lend support to the existence of a common mechanism, substantial differences in returns’ steepness question the one-pattern-fits-all story.