Human capital mobility patterns in the European Union and the financial crisis

This paper provides new evidence on the quantification of economic losses and/or gains from skilled human capital mobility in terms of GDP and productivity in several EU countries during and after the Great Recession. We construct two novel indicators to quantify and compare the economic effects of human capital mobility across EU countries in 2008, 2012, and 2016. Through hierarchical clustering, we created groups of countries to perform a non-parametric MANOVA. The results suggest the existence of three groups of countries aggregated by similar economic and mobility patterns. The differences between these groups are significant and allow us to delineate the countries’ gains and losses.

     

Equity-settled share-based payments and their (strategic) use under asymmetric information

Share-based payments are of widespread use in today's economy. Consulting firms are increasingly accepting equity compensation for their services (particularly from startups) and many governments provide fiscal incentives to support this choice. Likewise, profit-sharing licensing is an on-trend business practice by innovative firms and patent holders when transferring their technology to interested adopters. This paper unveils strategic considerations according to which an agent/seller designs its optimal policy in regard to the equity share to request in exchange for its service, technology, or trademark. The model assumes a fringe of interested users/customers differentiated by both the support they need from the seller and the value of the underlying relationship; and also holding an informational disadvantage on their own type. Given the seller's cost configuration, equilibrium outcomes entail entering a profit-sharing relationship either with the high-type customers only or with all customers. Yet, in this case, equity-based payment claims are —for rent extraction purposes— common (i.e., not differentiated) across types.     

Co‐integration Rank Determination in Partial Systems Using Information Criteria

We investigate the asymptotic and finite sample properties of the most widely used information criteria for co‐integration rank determination in ‘partial’ systems, i.e. in co‐integrated vector autoregressive (VAR) models where a sub‐set of variables of interest is modelled conditional on another sub‐set of variables. The asymptotic properties of the Akaike information criterion (AIC), the Bayesian information criterion (BIC) and the Hannan–Quinn information criterion (HQC) are established, and consistency of BIC and HQC is proved. Notably, the consistency of BIC and HQC is robust to violations of weak exogeneity of the conditioning variables with respect to the co‐integration parameters. More precisely, BIC and HQC recover the true co‐integration rank from the partial system analysis also when the conditional model does not convey all information about the co‐integration parameters. This result opens up interesting possibilities for practitioners who can now determine the co‐integration rank in partial systems without being concerned about the weak exogeneity of the conditioning variables. A Monte Carlo experiment based on a large dimensional data generating process shows that BIC and HQC applied in partial systems perform reasonably well in small samples and comparatively better than ‘traditional’ methods for co‐integration rank determination. We further show the usefulness of our approach and the benefits of the conditional system analysis in two empirical illustrations, both based on the estimation of VAR systems on US quarterly data. Overall, our analysis shows the gains of combining information criteria with partial system analysis.     

The Role of the Judiciary in the Public Decision‐Making Process

Empirical work on the relationship between political corruption and the design of public institutions suggests that the structure of judiciaries is an important determinant of corruption. This study develops a simple political economic model to investigate the role of judicial oversight in the policy‐making process for corruption deterrence, focusing on two dimensions of quality of the judiciary, namely efficiency and integrity. Our analysis explicitly accounts for the possibility that, while being independent of the political authority, the judiciary itself may be vulnerable to pressure from special interests. We study endogenous policy‐making under complete information and provide general conditions for the existence of deterrence (zero‐bribe) equilibria. In particular we show that preserving the independence of judiciaries in corrupt societies proves crucial to the existence of corruption‐deterrence effects.     

Modelling the impact of alternative pricing policies on an urban multimodal traffic corridor

This paper investigates the effects of alternative or joint schemes of road pricing and parking pricing to verify if private behaviour in operating parking facilities, road tolling and transit systems can lead to profitable results in the private sector and for public welfare. The evaluation is carried out using an idealised urban multimodal traffic corridor with some numerical examples that show the effects of different pricing policies. A Deterministic User Equilibrium assignment procedure is used to calculate certain performance indicators such as user travel costs, social costs and private profit. The results show that the system is highly sensitive to pricing policy and that a proper joint pricing of park-and-ride facilities, city centre parking and road tolls can be developed to simultaneously attain good private and social benefits.     

Quantitative methods for the economic valuation of a cultural tourism destination: case study of the Pisa Charterhouse

Quality & Quantity - This paper aims to provide an economic valuation of the Pisa Charterhouse, a renowned monastic complex built in the fourteenth century, located in the Tuscany region of...     

Finance, governments, and trade

We study how financial transactions may respond to exogenous variation in trade opportunities not only directly, but also through policy channels. In more open economies, governments may find it more difficult to fund and enforce public policies that substitute private financial transactions, and more appealing to deregulate financial markets. We propose a simple theoretical model of such policy-mediated relationships between trade and financial development. Empirically, we document in a country panel dataset that, before the 2007–2008 crisis, financial market volumes were robustly and negatively related to the share of government consumption in GDP in regressions that also include indicators of financial regulation and trade openness, and we seek support for a causal interpretation of this result in instrumental variable specifications.     

The social process of internet appropriation: Living in a digitally advanced country benefits less well-educated Europeans

We generalize and extend the sequential model proposed by the resources and appropriation theory to explain the digital divide in the European Union plus the United Kingdom (EU27+UK). We measure the theoretical constructs of the model with data provided by the EU and test the theoretical predictions using a partial least squares structural equation model. We find support for the hypothesized relationships but find that the effects vary depending on the digital development level of countries. While education overall is the primary determinant of the social production of digital inequalities, a country's digital development level is crucial for less well-educated Europeans. These findings have theoretical and practical implications: (1) they call into question the homogeneity of the effect of causal relationships and the assumption that individuals differ only in terms of motivation, access, and digital skills, and (2) they indicate that socially disadvantaged Europeans benefit from living in more digitally developed countries.