Patterns and determinants of international fragmentation of production: Evidence from outward processing trade between the EU and Central Eastern European countries

Patterns and Determinants of International Fragmentation of Production: Evidence from Outward Processing Trade between the EU and Central Eastern European Countries. — In this paper we investigate a specific form of international fragmentation of production, that is, the form giving rise to international trade for reasons of processing. Data on textile and apparel trade between EU countries and Central European countries show that the magnitude of trade for reasons of processing greatly overshadows that of final trade. The industry appears to be affected by a process of international fragmentation whose understanding requires a new definition of the concept of comparative advantage. Our analysis suggests that this fragmentation is activated by labor cost differentials as well as by reasons of geographic and cultural proximity.     

On Lipschitz continuity of the iterated function system in a stochastic optimal growth model

This paper provides qualitative properties of the iterated function system (IFS) generated by the optimal policy function for a class of stochastic one-sector optimal growth models. We obtain, explicitly in terms of the primitives of the model (i) a compact interval (not including the zero stock) in which the support of the invariant distribution of output must lie, and (ii) a Lipschitz property of the iterated function system on this interval. As applications, we are able to present parameter configurations under which (a) the support of the invariant distribution of the IFS is a generalized Cantor set, and (b) the invariant distribution is singular.     

Swimming upstream throughout the turmoil: Evidence on firm growth during the great recession

Economic downturns significantly impact on industry and firm dynamics. During a slowdown, increased competitive pressure makes less efficient firms more likely to exit (the cleansing hypothesis). However, evidence on Italian manufacturing firms during the Great Recession contrasts with this view. In fact, a not negligible subset of firms grew considerably during the crisis, increasing intra-industry heterogeneity. In this paper, we study these swimming upstream firms (SUFs) and we obtain two results. First, SUFs exhibit a high capability accumulation profile (innovation, intangibles investments and internationalization). Second, the impact of endogenous capability accumulation does not vanish after controlling for exogenous factors.     

Tracing neoliberalism in Italy: intellectual and political connections

Neoliberalism was a powerful ideology and ‘thought collective’ between the two World Wars and after WWII. The paper aims to enquire into the channels through which neoliberalism dwelled in Italian intellectual, economic and political history, from the early 1920s to the mid-1970s, unveiling the role of public intellectuals like Einaudi, and hardly unknown think-tanks like Ceses.     

Correction to: Mis-measurement of inequality: a critical reflection and new insights

Journal of Economic Interaction and Coordination - In the original publication of the article, caption of Figure 3 on the third page of Sect. 4.1 was incorrectly published as.     

Is the emperor wearing new clothes? A social assessment of the European Union 2007–2013 financial framework

ABSTRACT

Over the years, European leaders have proudly waved a social flag as one of the European Union’s (EU) constituent and differentiating elements. This commitment is assessed here through the social footprint of the European 2007–2013 multiannual financial framework among the EU countries and, worldwide, using an extended multiregional input–output model. The focus is on the quantity and the quality of income and jobs generated. We find that well-known differences among its northern, southern and eastern regions threaten the EU’s intentions for high social standards, enabling first- and second-class winners. Core EU countries account for the most of the Funds and, thus, most of the positive economic and social impacts, mainly through spillovers from peripheral regions. Beyond the EU borders, Funds expenditures induce capital compensation boosts in emerging countries not balanced by a similar labor compensation impulse. Indeed, China captures the bulk of low-skilled and temporary employment.     

The value added by government venture capital funds compared with independent venture capital funds

Government venture capital (GVC) funds have been a common policy initiative in European countries to overcome funding gaps in the promotion of early-stage ventures. In this work, we focus on the performance of such government funds. We compare the importance for the firm's development of post-investment, valueadded activities by GVC firms and independent venture capital (IVC) firms.We use a unique data set based on the results of a survey addressed to young high-techVC-backed firms from seven European countries. The survey gauged the importance of the contribution by the first lead investor in a variety of activity areas, as assessed by the investee companies. Attention was paid to potential adverse effects of the post-investment engagement of investors.Using a composite indicator of the value added, we find no statistically significant difference between the two types of investors. However, the profiles of value added differ across investor types, and, in particular, the contributions of IVC funds prove to be significantly higher than those of GVC funds in a number of areas, including the development of the business idea, professionalisation and exit orientation.     

One-dimensional maps with two discontinuity points and three linear branches: mathematical lessons for understanding the dynamics of financial markets

We develop a simple financial market model with heterogeneous interacting speculators. The dynamics of our model is driven by a one-dimensional discontinuous piecewise linear map, having two discontinuity points and three linear branches. On the one hand, we study this map analytically and numerically to advance our knowledge about such dynamical systems. In particular, not much is known about discontinuous maps involving three branches. On the other hand, we seek to improve our understanding of the functioning of financial markets. We find, for instance, that such maps can generate complex bull and bear market dynamics.     

RISK MEASURES: RATIONALITY AND DIVERSIFICATION

When there is uncertainty about interest rates (typically due to either illiquidity or defaultability of zero coupon bonds) the cash‐additivity assumption on risk measures becomes problematic. When this assumption is weakened, to cash‐subadditivity for example, the equivalence between convexity and the diversification principle no longer holds. In fact, this principle only implies (and it is implied by) quasiconvexity. For this reason, in this paper quasiconvex risk measures are studied. We provide a dual characterization of quasiconvex cash‐subadditive risk measures and we establish necessary and sufficient conditions for their law invariance. As a byproduct, we obtain an alternative characterization of the actuarial mean value premium principle.     

Capital accumulation and growth: a new look at the empirical evidence

Using annual data for 75 countries in the period 1960–2000, we present evidence of a positive relationship between investment as a share of gross domestic product (GDP) and the long‐run growth rate of GDP per worker. This result is robust for our full sample and for the subsample of non‐OECD countries, but not for the subsample of OECD countries. Our analysis controls for time‐invariant country‐specific heterogeneity in growth rates, and for a range of time‐varying control variables. We also address endogeneity issues, and allow for heterogeneity across countries in model parameters and for cross‐section dependence. Copyright © 2010 John Wiley & Sons, Ltd.