Job growth in early transition: Comparing two paths*

Small start‐up firms are the engine of job creation in early transition. We ask about differences in their growth across two different transition economies: Estonia, which experienced rapid destruction of pre‐existing firms, and the Czech Republic, which reduced the old sector gradually. We find that the majority of job growth corresponds to within‐industry reallocation. The within‐industry growth of small start‐up firms is similar in the two countries, in line with the convergence to Western industry firm‐size distributions. We also find similar patterns in the evolution of wage differentials between start‐ups and old firms and small differences in the extent of low‐wage employment in start‐ups across the two transition paths. JEL Classifications: J2, J3, J4, L1, O1, P2.     

The European high-speed train network: Predicted effects on accessibility patterns

The principal aim of this paper is to evaluate the impact of the future European high-speed train network on accessibility, by reducing time distance between places and modifying their relative location. We compare the current situation with that foreseen for the year 2010, according to the Outline Plan of the European High-Speed Train Network, in order to analyse which areas will most benefit from construction and improvement of the infrastructure. It is hypothesized that the high-speed train will certainly bring the peripheral regions closer to the central ones, but will also increase imbalances between the main cities and their hinterlands. A weighted average distance indicator is applied for this purpose. This measure identifies the spatial distribution of accessibility in the area of study, emphasizing the infrastructure effects, and locates accessibility changes at the European level. A Geographic Information System (GIS) has been used to carry out this study.     

The future of social security

We analyze the effect of the projected demographic transition on the political support for social security, and equilibrium outcomes. Embedding a probabilistic-voting setup of electoral competition in the standard OLG model with capital accumulation, we find that intergenerational transfers arise in the absence of altruism, commitment, or trigger strategies. Closed-form solutions predict population ageing to lead to higher social security tax rates, a rising share of pensions in GDP, but eventually lower social security benefits per retiree. The response of equilibrium tax rates to demographic shocks reduces old-age consumption risk. Calibrated to match features of the U.S. economy, the model suggests that, in response to the projected demographic transition, social security tax rates will gradually increase to 16%. Other policies that distort labor supply will become less important; labor supply therefore will rise, in contrast with frequently voiced fears.     

AN EVALUATION OF PROCESS‐ORIENTED SUPPLY CHAIN MANAGEMENT FRAMEWORKS

Supply chain management (SCM) is implemented by integrating corporate functions using business processes within and across companies. Several process‐oriented frameworks for SCM have been proposed but only two of these provide sufficient detail to enable implementation. We evaluate the Supply‐Chain Operations Reference (SCOR) framework and The Global Supply Chain Forum (GSCF) framework using four criteria and identify their relative strengths and weaknesses.     

Short-term wholesale funding and systemic risk: A global CoVaR approach

We use the CoVaR approach to identify the main factors behind systemic risk in a set of large international banks. We find that short-term wholesale funding is a key determinant in triggering systemic risk episodes. In contrast, we find weaker evidence that either size or leverage contributes to systemic risk within the class of large international banks. We also show that asymmetries based on the sign of bank returns play an important role in capturing the sensitivity of system-wide risk to individual bank returns. Since short-term wholesale funding emerges as the most relevant systemic factor, our results support the Basel Committee’s proposal to introduce a net stable funding ratio, penalizing excessive exposure to liquidity risk.     

Media visibility and corporate social responsibility investment evidence in Spain

Despite the extensive research in both the determinants and the results of corporate social responsibility (CSR), relatively few studies have considered extra-legal institutions as potential determinants of CSR. Our work fills this gap by looking at how media attention affects CSR over a long-term period in a continental European setting. Our results show that media coverage positively affects CSR. Additional scrutiny triggered by media coverage encourages dominant owners to signal their commitment to limiting self-dealing transactions and their orientation toward stakeholders' needs through CSR investments. Additionally, our results reveal that this signaling device offers greater benefits and lower costs in firms where controlling owners show a voting-cash flow wedge. Our results are relevant to different actors such as investors, auditors, and policy makers as they provide solid evidence that media coverage is an important driver of CSR orientation in a continental European setting.     

Tourist accommodation,consumption and platforms

The expansion of mediated accommodation on peer to peer (P2P) platforms, such as Airbnb, has generated extensive economic impact and structural changes in all the destinations involved. This study proposes an innovative analysis which estimates the economic impact associated with the expenditure of tourists staying in traditional hotel establishments in comparison to the impact of those staying in tourist housing mediated through P2P platforms. This research analyses fieldwork based on 1343 surveys carried out in the city of Granada, one of the main tourist destinations in Spain. Through the application of the input–output methodology we found that tourists staying in tourist housing mediated through P2P platforms generate a greater impact as a consequence of longer average stays and more heterogeneously distributed consumption. Their average expenditure is similar to that of tourists in hotels, but the indirect impact generated is greater. Consequently, we can better comprehend the economic impact associated with these platforms and their real effect. Public planners have to consider this information as part of the regulation and restriction of this activity.     

Well-being and the Great Recession in Spain

This letter assesses the impact of the Great Recession on well-being in Spanish provinces using two alternative composite indicators of objective well-being that include somewhat different dimensions. Whereas the crisis notably eroded economic well-being, its impact on overall well-being – which in addition to economic dimensions also includes non-economic ones – was imperceptible. This result points to the need to carefully define and assess well-being in empirical analyses.     

FOREIGN DIRECT INVESTMENT: THE KNOWLEDGE‐CAPITAL MODEL AND A SMALL COUNTRY CASE

This research looks at how foreign direct investment (FDI) in a small open economy compares with that of larger countries. I apply several specifications of the knowledge‐capital model to unique FDI data from the isolated country of Iceland, allowing for comparison with previous analysis of larger and similarly open economies. Using this together with other techniques, I seek to explain investment determinants by geography, economic size and skilled labor availability. The results of these analysis show that popular specifications do not accurately predict the effects for a small country case.     

Pass-through in dollarized countries: should Ecuador abandon the US dollar?

In this article, we examine the convenience of dollarization for Ecuador today. As Ecuador is strongly integrated financially and commercially with the United States, the exchange rate pass-through should be zero. However, we sustain that rising rates of imports from trade partners other than the United States and subsequent real effective exchange rate depreciations are causing the pass-through to move away from zero. Here, in the framework of the Vector Error Correction Model, we analyse the impulse response function and variance decomposition of the inflation variable. We show that the developing economy of Ecuador is importing inflation from its main trading partners, most of them emerging countries with appreciated currencies. We argue that if Ecuador recovered both its monetary and exchange rate instruments, it would be able to fight against inflation. We believe such an analysis could be extended to other countries with pegged exchange rate regimes.