Firm size and productivity from occupational choices

Small Business Economics - We model the distributions of firm sizes and of firms’ total factor productivity (TFP) as outcomes of a market equilibrium from the occupational decisions of...     

Fiscal consolidation in Europe: has it worked?

The aim of this article is to shed some light on the issue of fiscal austerity within Europe. We focus specifically on the 2008Q1–2014Q4 period, and on the effect of shocks to government expenditure and taxes on unemployment, controlling for other macro factors. We find that expenditure contractions may be detrimental for employment.     

A SIMPLIFIED MODEL FOR SOCIAL WELFARE ANALYSIS: AN APPLICATION TO SPAIN, 1973–74 TO 1980–81

Most of the literature on income distribution has concentrated on inequality. In this paper we introduce a concern for efficiency in a social welfare model. We propose a simple but useful specification which combines three features: (i) the selection of measurement instruments in the relative and the absolute case on the grounds of their properties for applied work; (ii) a procedure to make welfare comparisons across households with different needs, in a model in which equivalence scales depend only on house-hold size; and (iii) the use of household specific statistical price indices to make intertemporal comparisons in real terms. The methodology is applied to the study of the role of prices and demographic effects in the evolution of the standard of living in Spain from 1973–74 to 1980–81.     

Regional Trade Agreements and the Pattern of Trade: A Networks Approach

This paper uses a complex network approach for the analysis trade effects from regional trade agreements on world trade flows. We use bilateral trade data to compute the network community structure for every year between 1970 and 2000. We compare this to null community structures that emerge from various models based on regional and geographical classifications, the implementation of RTA's and gravity models of trade. Our results show that RTA formation appears to have a cyclical pattern on the world trade network community structure. We document periods where bilateral trade flows and the structure of the world trade network are consistent with those predicted by formation of RTAs. These cycles occur in 1980–86 and 1990–96. At the same time, we document periods in which the pattern in the world trade network is not explained by RTA formation. Two periods, 1986–90 and 1997–2000, show a pattern of bilateral trade flows that moves away from the prediction that results from assuming RTA formation as the driving force in the determination of the world trade network structure. Factors contributing to the latter parts of the cycle during our sample period include formation of regional trade networks in East Asia that account for a significant portion of world trade but are not formalised by RTAs in force.     

Sustainable banking in Latin American developing countries: Leading to (mutual) prosperity

This article examines multinational banks’ (MNBs) approaches to corporate social responsibility (CSR) in developing countries’ subsidiaries, particularly in Latin America. Building on in-depth case studies of two MNBs that are based in Europe and market leaders in Latin America, we analyze their CSR motivations and outcomes in host countries. We examine institutional environments by applying the national business system framework, and we suggest missing categories in its financial and educational dimensions. We theorize how institutional necessity determines MNBs' CSR in developing countries. Finally, we examine the CSR outcomes in Latin America, where banks’ responsible conduct has led to major improvements in educational levels and financial inclusion. These improvements alleviate poverty and enhance both country's social wellbeing and MNBs’ legitimacy, leading to mutual prosperity.     

The practice of sport and its influence on social values and behaviour education

‘Non-health effects’ of sports practice, as life satisfaction or non-cognitive education, are being adopted as aim in academic journals in several fields. This paper tries to contribute to this literature by focusing on the links between youth sports and the formation of values and social skills. To do this, we have made a survey, in which more than 5000 Spanish students were involved. They were asked about their sport activity, leisure preferences and socio-economic and family characteristics. We analyse separately athletes and non-athletes using Heckman’s two-step method. Therefore, we split the sample based on the likelihood of practising sports initially predicted by a probit analysis. Then, we separately estimate the non-cognitive educational outcomes of each group of individuals. The results of the first step show significant differences in gender, socio-economic and academic performance. In the second step, segregating the sample provides a number of highly significant effects: The cases of household income and videogames frequency play, among others. So, we have detected a different effect of increasing family income on the educational results (positive in the athlete and negative in the non-athlete group). In addition, a more substantial negative effect was observed in time devoted to videogames in the sample of athletes. These results can be used to implement educational policy measures, such as the promotion of sport in schools, or implementing awareness campaigns about responsible engagement in leisure time activities.     

Pareto-improving Immigration in an Economy with Equilibrium Unemployment

A dynamic two-country labour matching economy is presented. Workers decide whether to search in their native country or look for a job abroad (bearing an additional cost). The number of vacancies posted by firms in each country depends on the average characteristics of the workers searching inside that country. Wages are determined in an individual Nash bargain. We show the existence of multiple steady-state equilibria: one no-migration equilibrium and two migration equilibria. The multiplicity of equilibria is due to a self-fulfilling prophecy phenomenon linking average wages and incentives to migrate. The equilibria are Pareto-ranked, with migration-equilibria dominating no-migration.     

Anti-Discrimination Laws: Undermining Our Rights

The purpose of this article is to argue in favor of a private employer??s right to discriminate amongst job applicants on any basis he chooses, and this certainly includes unlawful characteristics such as race, sex, national origin, sexual preference, religion, etc. John Locke and many after him have argued that people have natural rights to life, liberty, and property or the pursuit of happiness. In this view, law should be confined to protecting these rights and be limited to prohibiting other people from transgressing those rights. The law should not hinder an employer??s ability to discriminate, any more than it should compel people to marry against their wishes. These laws generally emerge from a moral perspective that people think should be imposed on everyone else. But those who don??t welcome those morals are in effect being coerced to abide by them against their will; this is unethical. Finally, it will be argued that the free market has mechanisms by which discrimination will, be rendered powerless to harm its victims.     

Services for the underserved: unintended well-being

There is a lack of research on service consumption practices of Base of the Pyramid consumers. This study contributes to the Transformative Service Research agenda by understanding stigmatized service consumption practices and their effect on the well-being of these consumers; this has not been fully addressed until now. Additionally, it is shown that understanding the relations among consumers, communities, and informal service offerings results in the design of services with unintentional positive effects on well-being at individual, collective, and relational levels. Findings show that informal service offerings are non-discriminatory, hassle-free, jargon-free, and reputation-based. These findings pave the way to further explore such complex contexts to better understand the impact of service design on the well-being of such consumers. Positive practices can be adopted by any service industry that intends to serve that segment through the intentional redesign of offerings that are engaging, inclusive, and simple and acknowledge social standing.     

On the contribution of eco-innovation features to a circular economy: A microlevel quantitative approach

The circular economy (CE) and eco-innovation (EI) are two concepts deemed instrumental in achieving a sustainable transition. They have been proposed in the academic literature and by practitioners and have acquired very high public policy relevance, being endorsed by policymakers and ultimately leading to regulations supporting them. It has been argued that both concepts are compatible and interrelated and that EI is instrumental in achieving the CE. However, little is known about how different EI features contribute to the CE at the microlevel. This article tries to cover this gap. Its aim is to assess and quantify the causal relationship between different EI features and the CE with the help of a unique dataset of small- and medium-sized firms in Spain and an econometric analysis. Our results show that only systemic EIs contribute to a global CE, whereas other EI types such as component additions or small changes in existing production processes could even be barriers to high levels of circularity. It is found out that technological novelty is not relevant for reaching the CE. The results support the understanding of how EIs enable a transition to the CE. Care should be taken not to promote incremental EIs that do not only achieve low (or no) circularity but that effectively lock-in the economic system in solutions that entail a barrier to the achievement of high-level circularity.