The effect of innovation policy on SMEs’ employment and wages in Argentina

This article evaluates the effect of the Argentinean Support Program for Organizational Change on employment and wages. The program aimed at increasing small and medium-sized enterprises’ competitiveness by co-financing technical assistance to support process and product innovation activities. Although employment is not usually the main objective of these types of programs, they are always implemented assuming that they create—or at least do not destroy—employment opportunities. We use a unique data set with information for the population of firms in Argentina from 1996 to 2008 to test this important assumption. Using a combination of fixed effects and matching, we find that both process and product innovation support increased employment and wages, with a higher impact on employment. In addition, we find that product innovation support had a larger effect on wages than process innovation support.     

Oil shocks and external balances

We provide estimates of the effects of demand and supply shocks in the global crude oil market on several measures of oil exporters' and oil importers' external balances, including the oil trade balance, the non-oil trade balance, the current account, capital gains, and changes in net foreign assets (NFA). First, we show that the effect of oil demand and supply shocks on the merchandise trade balance and the current account, which depending on the source of the shock can be large, depends critically on the response of the non-oil trade balance. Our results provide evidence of an intermediate degree of international financial integration. Second, we document the presence of large and systematic valuation effects in response to these shocks. Valuation effects overall tend to cushion the effect of oil demand and supply shocks on the NFA positions of oil exporters and oil importers. Third, we quantify the overall importance of global business cycle demand shocks as well as oil-market specific demand and supply shocks for external balances.     

Medical practice and malpractice litigation in an evolutionary context

We model the interactions between the behaviors of physicians and patients, subject to clinical and legal risks, by means of evolutionary game theory. We propose an original game in which patients may sue their physician for medical malpractice, and physicians have to choose between two alternative treatments, with different levels of benefits and risks. The safer treatment is also the less effective, therefore its provision corresponds, under the assumptions of our model, to practicing negative defensive medicine. We study the Nash equilibria, test their stability in the replicator dynamics, and analyze their welfare properties. We find that the accuracy of the judicial system plays an important role, with possible counter-intuitive effects related to legal reforms. If the court is not sufficiently accurate, defensive medicine can be favored, paradoxically, by an increase in the probability that defensive physicians are sanctioned by the court. A similar outcome can be generated also by an increase in the compensation paid to patients by physicians, when sanctioned for medical malpractice.     

Psychological drivers in the adoption of morally controversial innovations: the moderating role of ethical self‐identity

The present article conceptualizes morally controversial innovations as a category of innovations that raise ethical issues due to their potentially undesirable long‐term consequences on society or the natural environment. Then, it analyzes the case of biofuel crops by applying an extended version of the theory of planned behavior, which includes moral norm (i.e. the personal convictions of what is wrong or right for society) and ethical self‐identity (i.e. the extent to which one perceives himself/herself as an ethical person). The obtained results show that attitude and subjective norms are positively related to farmers' intention to grow biofuel crops. Yet the intention of those farmers with a higher ethical self‐identity is also influenced by perceived behavioral control and moral norm. In particular, moral norm negatively affects their intention to grow biofuel crops, thus restraining the adoption of this innovation. Implications for theory, as well as for policymakers interested in promoting the diffusion of morally controversial innovations, are discussed.     

An empirical test of the regional innovation paradox: can smart specialisation overcome the paradox in Central and Eastern Europe?

The regional innovation paradox is the greater need of lagging regions to invest in innovation and their relatively lower capacity to absorb funding compared to more advanced regions. Using data on regional public spending, industry composition and economic performance, we test empirically whether there is a differential impact of European funding on regional economic growth between Eastern and Western European regions. We conclude that the paradox is proven and consider the extent to which smart specialisation strategies may help to improve the quality of governance of regional innovation systems.     

An econometric test of the self-employment model: The case of Italy

In this paper the authors put forward their attempt to test a self-employment model using an Italian data set which collects information about 78 Italian provinces (out of 95) over the period of 1985–1988. The self-employment model is introduced as a useful way to explain the formation of new small firms and subsequently previous econometric studies based on this model are discussed and compared.Once the empirical definitions of the variables are clarified, the econometric specification is introduced in Section 4 and results are discussed in Section 5 and 6.The general outcome of the estimates backs to a certain extent the self-employment approach which has already been tested with good results both in the U.K. and in the U.S. As far as the income choice is concerned, it turns out to be important in explaining the birth of new small firms. With regard to the role of job-losses, they also turn out to be significantly correlated with the high rates of firm formation.On the other hand, the discussion reported in Section 5 underlines the importance of other environmental factors which were not included in the original specification of Section 4. In particular, if the numerosity of the existing small firms is taken into account, self-employment relationships lose some of their significance. p]The laborer asks what he thinks the entrepreneur will be able to pay, and in any case will not accept less than he can get from some other entrepreneur, or by turning entrepreneur himself. In the same way the entrepreneur offers to any laborer what he thinks he must in order to secure his services, and in any case not more than he thinks the laborer will actually be worth to him, keeping in mind what he can get by turning laborer himself.Knight, 1921, p. 273     

An Italian forerunner of modern cost allocation concepts: Lorenzo De Minico and the logic of the 'flows of services'

This article provides an analysis of the thoughts of an Italian academic who lived in the first half of the twentieth century, Lorenzo De Minico, in particular it regards his approach to the allocation of common costs. De Minico's main concern was with the conventional, subjective allocation methods proposed by Italian practitioners and academics of his time. He valiantly searched for a methodological approach based on using causality as the basis for linking costs to cost objects. The most interesting finding of De Minico was the concept of 'flows of services' and his commitment to offering a convincing answer to the problem of general or common cost apportionment that went beyond 'traditional' criteria. De Minico's 'flows of services' referred to the outputs of resources consumed in indirect services. These indirect costs can be considered easily 'directly attributable' only if it is possible to measure the connected 'flows of services'. The article shows that the concept developed by De Minico in early twentieth century of Italy confirms the idea that some theoretical frameworks for a causal allocation of common costs were in existence many decades before information technology made such systems a practical proposition.     

The identification of liquidity effects in the EMS: Italy 1991–1992

We study the impact of liquidity shocks in Italy in the 1991–1992 period, when the lira belonged to the narrow ERM band with no exchange controls. We conduct our analysis by constructing (not simply assuming) predetermined measures of liquidity supply shocks, taking into account the institutional features of the money market and the reserve requirements' average computation system. We find that the supply of liquidity did significantly affect short-term interest rates; however, in contrast to earlier periods, most of the interest rate variations were attributable to foreign-exchange-related factors, as predicted by the asymmetric view of the ERM.