Labour market effects of public capital stock: evidence for the Spanish private sector

This paper provides a new rationale for the positive effect of public capital stock on employment and wages. We show that higher levels of public capital reduce wages along the wage equation and enhance employment due to the resulting larger elasticity of labour demand with respect to wages. The estimation of a structural model for the Spanish private sector reveals that this wage channel is empirically relevant. We use the estimated parameters to simulate the recent incidence of the ratio of public to private capital stock on the private sector economic performance. We find (i) sizeable effects on employment, capital stock and gross domestic product, and (ii) that the wage channel is particularly important for employment.     

FDI对中国国内投资影响的实证分析

在开放条件下,FDI会对东道国国内投资产生强有力的影响,这种影响体现在FDI对东道国国内投资产生挤出效应或者挤入效应。本文对1987—2001年FDI对中国国内投资的影响进行了检验,结果表明:在最近的15年间,FDI对国内投资总体上存在显著的挤入效应;对大多数省份的投资也存在挤入效应,但在东部沿海省份挤出效应和中性效应则占一定的主导地位;FDI对不同地区投资的影响程度也存在明显的差异,呈现出由东向西渐次减弱的状态。     

Crowding-in and crowding-out effects of public investments in the Portuguese economy

This study analyses the effects of public and private investment on Portuguese GDP in the period 1960–2013. After a review of the literature based on works developed in the context of VAR analyses, an alternative econometric strategy is proposed. We opt for ADL models using the methodology of Krolzig-Hendry-Doornik. We estimate direct effects of public and private investments on themselves and also a system of simultaneous equations and calculate the multipliers of the exogenous variables, represented by the current external transfers, the short-run nominal interest rate and public debt ratio. Additionally, we tested a model with the first three equations of the system, using beyond those variables the real exchange rate as an exogenous variable. The results point to the existence of a complementarity between private investment and public investment rather than any idea of substitutability. We find that public debt has important negative effects on public and private investments and consequently on output. Public investment has positive effects on output and on private investment. The appreciation of the real exchange rate has an important and long-lasting negative effect upon output, confirming the presence of a mechanism associated with a Dutch-disease phenomenon in the Portuguese economy.     

Rates of return to public and private capital: new estimates using nonlinear Euler equations

Results obtained by Otto and Voss show that public investment undertaken in Australia over recent decades satisfies conditions for intertemporal efficiency. This paper confirms this result, although lower output elasticities and rates of return to private and public capital are obtained. The reason for these results is that the earlier work is extended by estimating the parameter related to the elasticity of intertemporal substitution that was earlier restricted to a specific value. In fact, it is shown here that it is possible to obtain an economically reasonable (and statistically significant) estimate of this parameter by assuming that the stochastic discount factor for the representative firm is the same as for the representative consumer and equal to a gross real interest rate.     

Private finance for public goods: social impact bonds

Social impact bonds (SIBs) attract private investment to social programs by paying a market rate of return if predefined outcome targets are met. SIBs monetize benefits of social interventions and tie pay to performance, limiting governmental control once the contract is designed. Despite policy enthusiasm across the globe, SIBs have failed to attract private market investors without substantial additional guarantees. SIBs raise questions about government’s ability to ensure broader public values. Using literature on contracting, performance management, and public private partnerships, this exploratory analysis focuses on institutional design, transaction costs, and performance measurement, outlining the opportunities and concerns SIBs present.     

The dynamic impact of macroeconomic factors on initial public offerings: evidence from time-series analysis

This article examines the explanatory power and the dynamic impact of macroeconomic conditions on Initial Public Offering (IPO) activities in US during the period from 1970 to 2005. Applying time-series econometric techniques, we find the existence of long-run equilibrium relationships between IPO activities and selected macroeconomic variables. Stock market performance and volatility are shown to play the most important role in the timing of IPOs. The Fed funds rate and the 10 year US Treasury Bond (TB) yield play a comparable role in determining the amount of proceeds raised in the IPOs. There also exist different short-run dynamic adjustment mechanisms between IPOs and macroeconomic factors towards the long run equilibrium path and they are mostly completed within the period of 6 months to 1 year. The results have some useful implications for forecasting IPO activities.     

我国不同资本来源对经济的影响研究

在对不同来源资本对经济的影响中,大多数文献集中于其中的某一项资本来源或是从生产要素这个角度考虑对经济的影响.而本文将其中的资本因素按照不同来源进行划分,实证分析不同的资本来源对我国经济发展的具体影响程度.实证结果表明,从各种不同资金来源对GDP的贡献看来,自筹和其他投资与GDP的线性关系是最显著的而且贡献度是最大的;对于全国GDP而言,国家投资对GDP贡献为正值,不同的是国内贷款对全国GDP的贡献显示的是负值.     

The dynamic impact of intellectual capital on firm value: evidence from China

We examine the dynamic relationship between intellectual capital (measured by human capital and organizational capital) and firm value of Chinese listed firms. We do causality identification using system GMM and IV estimation, and find no significant relation between human capital and firm value, but organizational capital positively affects firm value with a lag. Our findings are robust to firms with different property rights, of different sizes, or in different industries, with the only exception of capital-intensive firms, in which human capital has a significant influence on firm value. The results imply that the improvement of organizational system plays a more important role in raising the value of a firm in a typical developing country, like China.     

The political economy of public goods: Some evidence from India

We are interested in how public goods get allocated by a centralized state. We use data on public goods and social structure from parliamentary constituencies in rural India to understand the allocation of these goods over the 1970s and 1980s. National policies and political agendas during this period emphasized universal access to basic amenities and financed a rapid expansion in rural infrastructure. We find evidence of considerable equalization in many of these facilities, reflecting perhaps the importance of these commitments. Among the historically disadvantaged social groups, those that mobilized themselves politically gained relative to the others. Measures of social heterogeneity that have been emphasized in the recent empirical literature on public goods are relevant but not overwhelming in their importance.     

The impact of information technology on the relationship between the public and the private realms

This paper is based on the hypothesis that public and private 'space' is becoming blurred and ambiguous and that a series of factors linked to the spread of information technology (IT) could be influencing this phenomenon. Moreover, this paper argues that the demise of the 'public realm' represents a serous threat to democracy flourishing in a pluralistic society. For polic-makers the potential adverse impact of IT on the relationship between public and private space should be of concern. The author believes there needs to be serious evaluation leading to a new set of govermance decisions on the wider social repercussion of IT.     

Investments and uncertainty revisited: the case of the US economy

This article examines the relationship between investments and uncertainty for the US economy, as the latter is approximated by consumer sentiment, purchasing managers’ prospects and economic policy uncertainty. Contrary to the existing literature, we provide evidence that this relationship is time varying. The time variation is attributed to the observed temporal replacement effect between private and public investments. Furthermore, we show that there are two distinct correlation regimes in this relationship and unless we concentrate on them, we cannot fully unravel the real link between uncertainty and investments. Finally, we examine whether the use of the two correlation regimes provides better forecasts for investments compared to the use of the uncertainty indices alone. The forecasting exercise reveals that the use of correlation regimes provides statistically superior out-of-sample forecasts.     

The public and private provision of pure public goods and the distortionary effects of income taxation: a political economy approach

Abstract .  A pure public good is provided by the government and the voluntary contributions of two types of households. The government finances its contribution by means of income taxation. The latter has distortionary effects. A third type of household never makes contributions. We analyse the effects of changes in the income tax rate on (a) the provision of the public good, (b) the private contributions of the households, and (c) changes in the distribution of income and welfare between contributing and non-contributing households. We derive a simple and testable condition under which the lowering of the income tax entails a Pareto improvement.     

The overprovision anomaly of private public good supply

It is well known that private provision of a public good may lead to a higher supply than that in some Pareto optimal allocation. The traditional view attributes this overprovision anomaly to a specific kind of preferences. The present paper, however, shows that preferences do not play a decisive role. Assuming normality, overprovision will occur only if the distribution of income is extremely skewed and Pareto optimal allocations are not within the set of cost-share equilibria.     

Privatization and capital formation in developing countries: an empirical analysis

The spur for privatization and its impact on economic performance have been analysed from many perspectives, including microeconomics, macroeconomics, and institutional economics. Previous research has focused on efficiency reasons for privatization at the level of the firm, and the relative performance of state‐owned enterprises and privately owned firms. This article investigates the macroeconomic facet of privatization with particular attention paid to the relation between privatization and capital formation in developing countries. Our study uses recent World Bank data on privatization for 105 countries over the time period 1988–2003. We explore the impact of privatization on capital formation by conducting two‐stage least squares and ordinary least squares estimations within three time frames. Our findings indicate that the effect of privatization on capital formation varies across regions and time frames. In general, privatization is neutral with regard to investment.     

Social preferences and public economics: Mechanism design when social preferences depend on incentives

Social preferences such as altruism, reciprocity, intrinsic motivation and a desire to uphold ethical norms are essential to good government, often facilitating socially desirable allocations that would be unattainable by incentives that appeal solely to self-interest. But experimental and other evidence indicates that conventional economic incentives and social preferences may be either complements or substitutes, explicit incentives crowding in or crowding out social preferences. We investigate the design of optimal incentives to contribute to a public good under these effects would make either more or less use of explicit incentives, by comparison to a naive planner who assumes they are absent.     

Forms of Explanation; Rethinking the Questions in Social Theory

The aim of this study is to investigate whether the so-called crowding in effects of complementarity or the crowding out effects of substitution occurred between public investment and private investment in Brazil from 1982 to 2013. This will be carried out through a theoretical debate on the investment general dynamics and an econometric analysis of vector error correction (VEC) model for the Brazilian case. The trajectory of the Brazilian economy and the empirical results show the presence of crowding in between public and private investments in the period, in accordance with the Post-Keynesian approaches. The crowding in is justified by the effects on demand via the Keynesian multiplier and via the expansion of the domestic market (particularly provided by infrastructure) and by the effects on the supply of private capital through the reduction of production costs, the increase in productivity, and through structural changes facilitated by public policy. Complementarity with regard to both the investments of the public administration and of federal government-owned/controlled enterprises is confirmed. Furthermore, a significant causal relationship is observed between public investment and the output of industrial manufacturing, which, from the structuralist perspective, is a sector that is considered a driving force of the economy. The special contributions of this paper are its time series for public investment and the variety of models that show crowding in between public and private investment.     

The impact of public and semi-public information on cotton futures market

This study estimated the impact of all major public and semi-public reports on the cotton futures market from 1995 through 2012. The estimation was based on the event study approach with the events measured by the release of five major reports: Export Sales, Crop Progress, World Agricultural Supply and Demand Estimates (WASDE) and Prospective Plantings (public reports from US Department of Agriculture) and Cotton This Month (semi-public report from International Cotton Advisory Committee). The best-fitting IGARCH(1,1)-t model that accounted for the day-of-week, seasonality and stock levels was used to measure the report effects on daily nearby cotton close-to-close futures returns. Prospective Plantings and WASDE reports appeared to be the most important sources of information in the cotton markets moving the conditional standard deviation of returns by an average of 14.4 and 9.6 percentage points, respectively. However, significant market reaction was not found for the other three reports. Our analysis revealed that, in the presence of clustering, ignoring the impact of other reports would have resulted in about 18% overestimation of WASDE impact.     

The impact of religiosity on self- assessments of health and happiness: evidence from the US Southwest

Using an age stratified random sample from an ongoing population-based study of Mexican Americans 45 years of age or older living in the Southwest this study fexamines the relationship between religiosity and self-rated indices of physical health, subjective health status and happiness. After estimating a set of binary logit models and controlling for individual characteristics such as age and gender, findings indicate that religiously involved respondents have a lower probability of reporting a health problem than those less or not involved. Further, those respondents who attend religious services regularly are more likely to assess themselves healthier and happier than those reporting sporadic or no attendance. However, when the religious variable is factored into six constructs, as the frequency of religious attendance increases the happiness measure initially increases to an inflection point then it continues to increase but at a slower rate. This result is consistent with the argument that those individuals who, on average, attend religious services once a week appear to reap the greatest incremental rewards in terms of assessments of subjective health and overall happiness.     

The impact from changes in stock market valuations on investment: new economy versus old economy

This paper investigates whether there is a different impact from changes in ‘new’ and ‘old’ economy stock valuations on private investment for seven OECD economies. A vector autoregressive model is estimated for each individual country, using quarterly data over the period 1990–2000. It is found that the impact from changes in valuations of new economy stocks to investment is roughly the same in North America and in the United Kingdom as in continental Europe. By contrast, the impact from changes in old economy stock valuations on investment is, in general, larger in North America and in the United Kingdom than in continental Europe. Finally, the results suggest that in continental Europe the impact on investment from changes in the valuation of new economy stocks is bigger than for old economy stocks, whereas for North America and the United Kingdom, the impact is more similar.