POLICY MAKING FOR INDUSTRIAL COMPETITIVENESS IN PORTUGAL - Patterns of change in a traditional bureaucracy

In Portugal the EEC membership represented a major change in Portuguese Administration functioning. This article uses the new institutionalism approach and the concept of path-dependence to analyse the change in the functioning of a central directorate reponsible for industrial policy. It argues that despite the external pressures for change has altered the directorate operations, there are patterns of continuity which are path-dependent. The response to change shows institutional reproduction in traditional features which is partly due to the reluctance to change traditional methods and partly because of the routines, procedures and norms embedded in the culture.     

A proposed method to evaluate the quality of services using Fuzzy sets theory

This paper seeks to provide the services sector with a focus on the assessment of quality and for this purpose, a technique that may able a quantitative approach to evaluating quality is proposed. The use of the fuzzy sets theory to process data was used, thus allowing a more flexible and suitable insight into the characteristics of the service sector. An extension of the technique for order performance by similarity to the ideal solution was used. This informs managers of the distance from the company $\prime $ s current level of quality, if compared to a company of perfect quality by means of an overall evaluation. The same technique was used to detect changes in the level of quality during the period surveyed by using a stratified assessment. Finally, a practical application of the approach proposed is presented.     

Term structure and the estimated monetary policy rule in the Eurozone

In this paper we estimate a standard version of the New Keynesian Monetary (NKM) model augmented with term structure in order to analyze two issues. First, we analyze the effect of introducing an explicit term structure channel in the NKM model on the estimated parameter values of the model, with special emphasis on the interest rate smoothing parameter using data for the Eurozone. Second, we study the ability of the model to reproduce some stylized facts such as highly persistent dynamics, the weak comovement between economic activity and inflation, and the positive, strong comovement between interest rates observed in actual Eurozone data. The Sect. 3 implemented is a classical structural method based on the indirect inference principle. We are grateful to Eduardo Ley, two anonymous referees and seminar participants at the XXXI Simposio de Análisis Económico (Oviedo, Spain) and Bank of Spain for their useful comments. Financial support from Ministerio de Ciencia y Tecnología and Universidad del País Vasco (Spain) and Fundación Séneca through projects SEJ2004-04811/ECON, 9/UPV00035.321-13511/2001 and I02937/PHCS/05, respectively, is gratefully acknowledged. The first author also thanks Fundación Ramón Areces for financial support.     

ASSESSING THE EFFECT OF PUBLIC SUBSIDIES ON FIRM R&D INVESTMENT: A SURVEY

This survey examines the empirical literature on the relationship between public R&D subsidies and private R&D investment over the past five decades. The survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues. We aim to provide further explanations of the possible causes of that heterogeneity. In particular, we emphasise a set of issues that, in our view, are critical to understanding the potential effect of public R&D subsidies on private R&D spending. Special attention is paid to the dynamic aspects and composition of firm R&D, the constraints faced by the firm (such as financial constraints), and the amount and source of public subsidies. None of these issues have been investigated in depth. We formulate a set of research assumptions to guide future empirical research in this field.     

How to measure competition in an economy in transition

This paper attempts to find a robust method of measuring competition when firms' operational activities are subject to frictions. The first part theoretically tests the indicative quality of two competition measures, the price‐cost margin (PCM) and the profit elasticity, in a model of monopolistic competition. The second part studies the empirical performance of the indices for a panel of Ukrainian manufacturing firms. This study offers a new approach to measuring profit elasticity that relies on structural estimation of a production function. The estimation methodology retrieves a productivity index that is adjusted to imperfect competition. The proposed method of measuring profit elasticity is found to be robust to frictions, but the PCM and traditional profit elasticity are biased, especially when the intensity of competition is low. Empirical findings show that competition exhibits a significantly positive correlation with aggregate productivity performance, while its impact on firm productivity is nonlinear.     

Intraday hedging with financial options: the case of electricity

As market intermediaries, electricity suppliers purchase electricity from the wholesale market or self-generate to deliver their customers. However, electricity suppliers are uncertain about how much electricity their residential customers will use at any hour of the day until they actually turn switches on. While demand uncertainty is a common feature of all commodity markets, suppliers generally rely on storage to manage it. Singularly, electricity suppliers are exposed to joint volumetric and price risk on an hourly basis given the physical attributes of electricity. In the literature on electricity markets, few articles compare the efficiency of forward contracts, options and physical assets (i.e. power plants) within intraday hourly hedging portfolios, whereas electricity markets are precisely hourly markets. We analyse portfolios made of forwards, options and/or power plants for specific hourly clusters (9 am, 12 pm, 18 pm, 9 pm) based on electricity market data from 2013 to 2015 from the integrated German–Austrian spot market. Through a VaR model, we prove that intraday hedging with forwards is structurally inefficient compared to financial options and physical assets, no matter the cluster hour. Moreover, our results demonstrate the contribution of ‘out of the money’ options for all hours within volatile spot markets.     

Are the BRIC countries overtaking intermediate countries in the race for international R&D? The case of Spain

The emergence of Brazil, Russia, India and China (BRIC) as international locations for foreign direct investment in R&D is a sign that multinationals are relocating their technological activities to new territories. This trend may weaken the supremacy of the developed countries until now considered leaders in innovation, and may mean the loss of the competitive advantages enjoyed by the countries considered intermediate innovators. This paper examines the situation of Spain as a typical intermediate economy and compares it to its main competitors among the BRICs. Based on eight case studies of subsidiaries with R&D centres in Spain, we conclude that the policies adopted by certain emerging economies to develop their national innovation systems are proving effective and that these countries now pose a threat to intermediate economies. However, the BRICs still lag behind in terms of the security of their institutional framework; this situation leaves intermediate countries in an advantageous position.     

Is the leadership style important in R&D departments in Spanish industrial companies? An empirical analysis

This paper aims to thoroughly look into the effects of the differences between the diverse leadership styles on innovative outputs (intensive, efficient and eco-efficient) in Spanish industrial companies. A questionnaire for the factories was sent and was received between the months of September 2013 and June 2014. A total of 142 valid questionnaires were received. Several regression models were used in the empirical analysis. The results show that charismatic leadership positively induces an intensive innovative output, at the same time as it improves firms’ eco-efficient innovative output. Likewise, the individualised consideration that characterises transformational leadership makes this leadership style produce positive results on the whole group of innovative outputs considered. At the other end of the leadership spectrum, the transactional style causes negative effects on the relationship between innovative activity and innovative outputs, and more specifically, on the efficient innovative output.     

On the smoothness of optimal paths II: some local turnpike results

We study the local turnpike property for two classes of infinite-horizon discrete-time deterministic maximization problems which have common applications, e.g., optimal growth theory. We follow a functional-analytic approach and rely on an implicit function theorem for the space of the sequences which converge to zero. We shall assume the existence of an optimal path which is not necessarily a steady-state. Relying on material developped in Blot and Crettez (Decis Econo Finance 27:1–34, 2004), “On the smoothness of optimal paths” Decis Econ Finance, 21:1–34, 2004), we provide conditions under which a variation in the initial conditions (i.e., capital stock and discount rate) yields an optimal solution which converges toward a reference solution when time becomes infinite. We also provide new results on bounded solutions of difference equations. We gratefully thank the editor, Silvano Holzer, and two anonymous referees for remarks and advices on a previous version of this paper.     

Employment comovements at the sectoral level over the business cycle

This paper implements the technique suggested by Den Haan (J Monet Econ 46:3–30, 2000) to investigate contemporaneous as well as lead and lag correlations among economic data for a range of forecast horizons. The lead/lag approach provides a richer picture of the economic dynamics generating the data and allows one to investigate which variables lead or lag others, and whether the lead or lag pattern is short term or long term in nature. This technique is applied to monthly sectoral level employment data for the USA and shows that among the ten industrial sectors followed by the US Bureau of Labor Statistics, six tend to lead the other four. These six have high correlations indicating that the structural shocks generating the data movements are mostly in common. Among the four lagging industries, some lag by longer intervals than others and some have low correlations with the leading industries. These low correlations may indicate that these industries are partially influenced by structural shocks beyond those generating the six leading industries, but they also may indicate that lagging sectors feature a different transmission mechanism of shocks.