Productivity change and externalities: empirical evidence from Hungary

This paper contributes to the analysis of the impact of externalities on the host country’s total factor productivity by taking into account different dimensions of spillover effects. Namely, engagement in exporting and foreign ownership is generally perceived as being beneficial to individual firms and the economy as a whole. The approach used in the current research accounts for different internal as well as external factors that individual firms face and evaluates the effect on changes in productivity, technology as well as the efficiency of domestic firms. The empirical analysis focuses on Hungary. While the country leads the group of post-socialist countries in the amount of attracted foreign direct investments (FDI) the effect of this policy on the economy remains unclear. The research finds that different externalities play a different role in productivity, technological and efficiency change in different types of firms and sectors of the economy.     

An economic-ecological model of urban growth and urban externalities: empirical evidence from Italy

The importance of urban size for urban sustainability is well known; it plays an important role in the possibility of shaping the quality of urban living conditions. For this reason, it is important to study urban dynamics in connection with the issue of environmental quality. Moreover, awareness of the existence of cyclical patterns in urban dynamics, which we stress in this paper, can be useful for the formulation of environmental policies enabling a steady state equilibrium to be reached in terms of sustainability by flattening out the cyclical waves. A number of more quantitative models for the interpretation of urban growth has been provided; these models are related to the well-known ecological prey-predator model of Lotka–Volterra, and provide a good interpretative framework of the territorial phenomena, characterised by strong feed-back mechanisms. Recently, a pure economic model, linking the per-capita income and the urban rents has been suggested as a possible interpretative model of urban growth which is characterised by two main advantages: (a) its capacity to overcome some of the limits of the previous prey-predator models, like the necessity to apply the concept of an urban carrying capacity; (b) its pure economic feature. The present paper presents the model and the logic behind it and provides an empirical analysis of the model based on the Italian case. An econometric model is presented on the relationship between urban population growth and urban rent, based on a database of 95 Italian cities in time series from 1963 to 1996; the feedback mechanisms between the two variables emerge. This work represents the first attempt to provide an estimate of the prey-predator model based on real data.     

世界各国政府绩效审计变迁:理论和来自各国的经验证据

本文以制度变迁理论为理论基础,结合世界各国经济发展的经验证据,提出并验证绩效审计变迁的五个假说:(1)一国技术水平高低与其是否开展绩效审计成正相关;(2)人均国民收入与绩效审计变迁正相关;(3)高等教育水平与一国政府审计部门开展绩效审计正相关;(4)财政总支出占G D P的百分比重与绩效审计变迁正相关;(5)交通发达程度与一国开展绩效审计正相关。结果假设(1)、(4)和(5)得到证实;假设(2)、(3)被拒绝。     

Effects of government expenditure on private investment: Canadian empirical evidence

The purpose of this study is to investigate the relationship between government expenditures and private investment in Canada during the period 1961 to 2000. To this end, effects of five categories of government expenditures on investment are examined within the cointegration and error-correction framework. The empirical results show that government expenditure on education and health has positive effects whereas government expenditures on capital and infrastructure have negative effects on private investment. The other expenditure categories, including government expenditure on protection of persons and property, expenditure on debt charges, and expenditure on government and social services have no significant effects on private investment.I wish to thank Baldev Raj for his valuable comments on this study which have led to an important improvement in the paper. I would also like to thank my colleagues Tomson Ogwang, Paul Bowles, Jalil Safaei, and an anonymous referee for their comments. However, the usual disclaimer applies.First version Received: May 2002/Final version received:20 May 2004     

Upstream-downstream transactions and watershed externalities: Experimental evidence from Kenya

Where environmental policies or projects seek behavioral change, understanding underlying norms and preferences is essential to securing environmental outcomes. This study models a payment for environmental services intervention in an experimental field laboratory in Nyanza Province, Kenya. Upstream and downstream individuals are paired in a standard investment game, in which the upstream mover's investment represents land use decisions and the downstream mover responds with a choice of compensation payment. The experimental intervention introduces an enforcement treatment on the downstream movers' compensation decisions for a single round. Underlying social preferences and identity appear to shape individual transactions between upstream and downstream individuals. Upstream first movers are sensitive to the removal of the enforcement on their downstream partners in the second round, and make decisions consistent with crowding out of social preferences. The results suggest that environmental interventions may affect resource decisions for individuals who are not themselves direct targets of enforcement.     

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.     

The effects of local government investment on economic growth and employment: evidence from transitional China

Based on the panel data of 28 provinces in the year of 1987-2001,this paper examines the effects of the local government investment on economic growth and employment.The empirical result shows that the local government investment plays a significant positive role in economic growth and emplovment.However,while the proportion of local government investment to GDP had a remarkable rise after 1998.the elasticity of local government investment on economic growth declined,which shows that there is a hig room for raising the efficiency of local government mvestment.Moreover,the empirical examination shows that although local government investment had positive effect on employment,the elasticity had a decrease after 1994 when the tax-sharing system reform was put into practice.This shows that the positive role of local government investment on emplovment is also limited.This paper argues that the role of local governments as investors must be weakened,and local governments of different levels should lessen direct economic intervention and concentrate on public regulation.     

Vertical externalities in tax setting: evidence from gasoline and cigarettes

A common feature of federal systems is that tax bases are joint property. Consequently, state and federal tax setting decisions are interdependent. Our aim here is to put forward a rudimentary theoretical analysis of this phenomenon, and to use the theory as a framework for econometrically estimating the magnitude of the responses. We find that when the federal government increases taxes, there is a significant positive response of state taxes. For example, a 10-cent per gallon increase in the federal tax rate on gasoline leads to a 3.2-cent increase in the state tax rate.     

Information design,externalities, and government interventions

We consider a model of Bayesian persuasion with spillovers. A sender provides information to persuade a receiver to take an action with external effects. We consider how government interventions, including corrective subsidy and tax, affect social welfare. In addition to internalizing externalities, government interventions affect social welfare through an informational channel. Subsidies to the sender's preferred action incentivize the sender to reveal less information, but taxes on the sender's preferred action incentivize the sender to reveal more information. Because of such an informational effect, the optimal subsidy and tax may be different from the size of the externalities. In some cases, social welfare is maximized with no government intervention.     

Vertical versus horizontal tax externalities: An empirical test

We study taxation externalities in federations of benevolent governments. Where different hierarchical government levels tax the same base, one can observe two types of externalities: a horizontal externality, working among governments of the same level and leading to tax rates that are too low compared to the social optimum; and a vertical externality, working between different levels of government and leading to suboptimally high tax rates. Building on the model of Keen and Kotsogiannis [Keen, Michael J., Kotsogiannis, Christos, 2002. Does federalism lead to excessively high taxes? American Economic Review 92 (1) 363–370], we derive a discriminating hypothesis to distinguish vertical and horizontal tax externalities based on measurable variables. This test is applied to a panel data set on local taxes in a sample of Swiss municipalities that feature direct-democratic fiscal decision making, so as to maximize the correspondence with the “benevolent” governments of the theory. We find that vertical externalities dominate – they are thus an observed empirical phenomenon as well as a notable extension to the theory of tax competition.     

Announcements credibility and government securities: evidence from Colombia

This article evaluates the effect of central bank announcements on government securities yields in emerging economy. In particular, based on the Colombian experience, we present empirical evidence to address the effect of credibility scenario in which the central bank announcements are made. The findings denote that credibility performance must be taken into account to verify the impact of monetary policy announcements.     

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.     

Knowledge characteristics and the dynamics of technological alliances in pharmaceuticals: empirical evidence from Europe,US and Japan

The paper investigates the co-evolutionary patterns of the dynamics of technological alliances and of the structure of the knowledge base in the pharmaceutical sector. The main hypothesis under scrutiny is that technological alliances represent a key resource for firms in knowledge intensive sectors to cope with dramatic changes in the knowledge base, marked by the introduction of discontinuities opening up new technological trajectories. Using patent information and data on technological alliances drawn from the CATI-MERIT database, we compare the evidence concerning the so-called triad regions, i.e. United States, Europe and Japan. The empirical results support the existence of a life cycle in biotechnology affecting the pharmaceutical industry. Furthermore, the dynamics of alliances is found to depend on (i) the phase of the biotechnology life cycle, (ii) the strength of the region in biotechnology and (iii) the general features of the economic environment of the region.     

Network externalities in consumer spending on lottery games: evidence from Spain

We use data from two nationally representative Spanish surveys in 2005 and 2006 to investigate spending on lottery games. Estimates from Tobit and double hurdle models of participation in lottery markets and spending on lottery tickets find that frequent participation in one game is not associated with an increased or decreased probability of participating in other games, but is associated with increased spending on other games. Consumer spending on different lottery games exhibits inter-related consumption decisions. Also, the assumptions underlying the double hurdle model, but not the Tobit model, better describe consumer spending on lottery tickets in Spain.     

Young democracies and government debt: evidence from South America

I test the hypothesis that when democracies are young, or still fragile and unconsolidated, government debt tends to increase, presumably because of increased demand for redistribution, or to buy out the electorate, so that democracy becomes acceptable and “the only game in town”. I use a sample of all South American young democracies during the 1970–2007 period and the results, based on dynamic panel time-series analysis, suggest that those young democracies are indeed associated with larger government debt. Furthermore, I test the hypothesis that the outgoing dictatorships of the day bequeathed the young democracies with large government debt. This hypothesis is not confirmed by the analysis. Lastly, there is no evidence that, as those democracies mature over time, government debt tends to decrease. Given how I conduct the exercise, that is, the nature of the sample, the methodology I use and the counterfactuals I run, and also that there are always new episodes of democratisation being experienced by different countries around the world, with some being economically successful and others less so, the results I report are informative of what to expect in terms of government debt during political transitions into democracy when particular institutions are still not in place.     

Budget referendums and government spending: evidence from Swiss cantons

In many Swiss cantons, new government programs must be approved by a referendum of citizens before money can be spent. Referendums seem like a natural way to address citizen-legislator agency problems, yet statistical evidence on how referendums affect spending decisions is almost nonexistent. We estimate regressions for Swiss cantons using panel data from 1980 to 1998 and find that mandatory referendums reduced government spending by 19% for the median canton after controlling for demographics and other determinants of spending.     

Juvenile crime and punishment: evidence from Japan

Over the last decade, juvenile crime has become a serious social problem in Japan. The Juvenile Law was revised in 2001 to impose harsher punishment on juvenile offenders. This revision makes it possible to impose criminal punishment on 14- and 15-year-old criminal offenders, while those offenders aged 16–19 have always faced criminal punishment, both before and after the revision. Using this revision as a natural experiment, this study conducts a difference-in-differences estimation to examine the effect of punishment on juvenile crime. The analysis provides evidence that punishment can deter juvenile crime. In addition, this research examines the criminal behaviour of 13-year-olds, who face no change in punishment, but who soon will in the near future. The results suggest that the revision also had a negative impact on the criminal behaviour of these younger offenders.     

Fiscal decentralization and corporate investment: empirical evidence from China

This paper examines the effect of fiscal decentralization on levels and efficiency of corporate investment. The results indicate that as the extent of local government fiscal decentralization increases, the level of new investment by firms under their jurisdiction rises. Furthermore, fiscal decentralization has an impact on corporate investment by aggravating over-investment rather than alleviating under-investment, leading to a situation whereby fiscal decentralization is negatively associated with investment efficiency at the level of the firm. Finally, the impact of fiscal decentralization on over-investment, under-investment and investment efficiency is not different between state-owned enterprises and non-state-owned enterprises, suggesting that economic leverages are the dominant government intervention measures. The findings imply that fiscal decentralization is another determinant of firm-level investment and corporate investment efficiency, which broadens the existing literature on the economic consequence of fiscal decentralization, resulting in important implications for policy-making.     

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.