The determinants of trade performance: influence of R&D on export flows

A theoretical model is presented, in which supply side differences between countries determine international trade flows. This model is empirically tested at a sectoral level for a group of EU countries, within a framework that focuses on changes through time and differences between countries. The results show that the validity of the theoretical model is limited at sectoral level. However, as expected, we find that the variable representing technological differences is significant and correctly signed for high-technology sectors. The evidence points to the existence of different production functions across countries and to the importance of supply side factors in determining the direction and the terms of trade.     

The effects of education on spouses’ satisfaction in Europe

This article identifies the effects of both own and spouses' education levels on individual economic satisfaction for European households. To that end, it estimates several specifications based on the family collective approach, for each of the 14 EU countries, by using the eight waves of the European Community Household Panel, 1994–2001. After demonstrating that the IV Hausman–Taylor procedure is the selected estimation method in the majority of cases, the empirical results show that male and female income satisfaction significantly increases when the husband achieves higher education qualifications in the majority of European countries. However, the positive effect of the wife's higher education on female income satisfaction only appears in a very limited number of countries. Additionally, increases in individual wage and nonwage incomes generally lead to higher satisfaction levels.     

Economic Growth and Convergence of EU Member States: An Empirical Investigation

The aim of this article is to construct a European production frontier using deterministic methods, and to break down growth and convergence during the period 1980–2001. The results show that EU growth is primarily driven by physical and human capital accumulation, the contribution of which is essential for the cohesion of European countries. We find capital accumulation and efficiency change to be important convergence factors within the EU, while technical change has worked against it. The approach used has also enabled us to analyze the differences in growth performance of Member States and highlight the role of human and public capital, supporting the European cohesion and development policies carried out in this period.     

Does foreign aid promote recipient exports to donor countries?

This paper uses the gravity model of trade to investigate the effect of foreign aid on exports of aid recipients to donor countries. Most of the theoretical work emphasises the possible negative impact of aid on recipient countries’ exports, primarily due to exchange rate appreciation, disregarding possible positive effects of aid in overcoming supply bottlenecks and promoting bilateral trade relations. Using non-stationary panel (cointegration) estimators to control for omitted variable and endogeneity bias, we find that the net effect of aid on recipient countries’ exports is insignificant, both for our sample (of 123 countries) as a whole and for important regional sub-samples. This finding is in line with the small or insignificant macroeconomic impact of aid found in earlier studies and also suggests that exporters in recipient countries are not benefiting from improved trade relations with donors.     

Measurement of export prices and changes in product quality

In this paper, the economic theory of index numbers is applied to the construction of industry-level export price indices and export quality indices. These indices are used to make consistent comparisons of export prices and qualities at the same or different points in time. Evidence of quality change over time was found to be an important phenomenon in explaining the variation of unit value indices over time and across countries for some European Union trade flows. About half of the unit value differences among destination countries can be explained by quality differentials. The quality-corrected price indices are potentially useful in any empirical application in which accurate measures of export prices are needed.The authors wish to thank Bienvenido S. Cortés for valuable discussion at the Forty-Eighth International Atlantic Economic Conference, October 7–10, 1999, Montreal, Canada.     

Are Trade Preferences more Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme

This study examines the effect of the ‘Everything But Arms’ (EBA) trade preferences regime on exports from the African, Caribbean and Pacific countries (ACP) to the European Union (EU). With this aim, an augmented gravity model is estimated for exports from the 79 ACP countries to the EU‐15 for the time period of 1995—2013 using panel data techniques. The results are used to quantify the effect of the eligibility for EBA preferences on the export performance of the ACP least developed countries (LDCs) and to relate it to the impact of official development assistance on exports. In addition to their separate effects, the combined impact of EBA and aid flows is examined. The main results do not provide evidence for an additional positive effect of the EBA agreement on the export performance of the ACP LDCs. However, receiving aid shows a significant and positive effect on exports from EBA‐eligible ACP countries to the EU‐15, supporting an EU development strategy that includes both sorts of assistance, aid and trade preferences.     

Gravity model: An application to trade between regional blocs

The objective of this paper is to evaluate the determinants of bilateral trade flows among 47 countries and, particularly, the effects of preferential agreements between several economic blocs and areas: European Union (EU), North-American Free Trade Area NAFTA), Caribbean Community (CARICOM), Centro-American Common Market (CACM), and other Mediterranean countries (MEDIT). The period under study is from 1980–99. The authors estimate a gravity equation that allows the comparison of the weight of the influence of preferential agreements and also, infers the relevance of other determinants of bilateral trade flows such us geographic proximity, income levels, population, and cultural similarities. The analysis is undertaken for each year of the sample in order to capture the temporal evolution of the impacts on trade of the different variables considered. Using the estimation results as a base, trade potentials resulting from new free trade agreements are calculated.     

Bank presence in firm equity: A diversification based approach

This study analyses the possible reasons for banks deciding to invest in firm equity, based on the fundamentals of the strategic diversification literature. Those fundamentals suggest that it may be in response to the negative evolution of other aspects of banking business, namely, credit business, fixed interest business and services, as well as the bank's level of efficiency. The results confirm the hypotheses that the decision to hold equity in other firms is related to the evolution of the bank's other businesses. However, the results for savings banks differed from those for banks.     

Trade Openness and Income: A Tale of Two Regions

In this paper, we present evidence of the long‐run effect of trade openness on income per worker for two regions that have followed different liberalisation strategies, namely Asia and Latin America. A model that re‐examines these questions is estimated for two panels of Asian and Latin American countries over the 1980–2008 period using a novel empirical approach that accounts for endogeneity as well as for the time series properties of the variables involved. From an econometric point of view, we apply recent panel co‐integration techniques based on factor models that account for two additional elements usually neglected in previous empirical literature: cross‐dependence and structural breaks. The results point to a positive impact of trade openness in both Asia and Latin America although the size is smaller in the second region. We associate this finding with the degree to which trade was managed in both regions of the developing world.     

Drivers of non-profit activity: a cross-country analysis

This paper contributes to the existing debate on the determinants of non-profit activity. The main theories have been centered in (1) the study of the individual behavior of people (donors, non-profit entrepreneurs), (2) one single factor or (3) one single country. To quantify this approach, data for 38 countries have been used, extracted from World Values Survey, United Nations Development Program and Global Entrepreneurship Monitor. A structural modeling approach based in partial least squares (PLS) has been applied. The results provide evidence of the strength of environmental factors such as trust, economic development and social care public expenditures in non-profit activity. The model doesn’t confirm the existence of a positive relationship between entrepreneurship and non-profit activity. Nevertheless, the authors consider that the supply side theories and the idea of spatial production of entrepreneurship are quite consistent and find some signs evidencing a positive relationship between these variables.