Catching Growth Determinants with the Adaptive Lasso

Abstract. This paper uses the adaptive Lasso estimator to determine variables important for economic growth. The adaptive Lasso estimator is a computationally very efficient procedure that simultaneously performs model selection and parameter estimation. The computational cost of this method is negligibly small compared with standard approaches in the growth regressions literature. We apply this method for a regional dataset for the European Union covering the 255 NUTS2 regions in the 27 member states over the period 1995–2005. The results suggest that initial GDP per capita (with an implied convergence speed of about 1.5% per annum), human capital (proxied by the shares of highly and medium educated in the working age population), structural labor market characteristics (the initial unemployment rate and the initial activity rate of the low educated) as well as being a capital region are important for economic growth.     

Firm size, business experience and export intensity in SMEs: A longitudinal approach to complex relationships

The objective of the paper is to test the effect of firm size and business experience on export performance. In fact, despite a growing number of empirical studies, the question of the relationship between these variables is not clearly established. This research aims at contributing to a better understanding of these complex relationships with a special focus on small and medium-sized enterprises (SMEs). The authors develop a general model and test it using a sample of Italian manufacturing firms that spans the 1997–2001 period. Combining a time-series with a cross-sectional analysis, they use an econometric model in order to test the relationships. Their findings provide a strong support for both relationships. The results show that it is not business experience per se which is important but that it is the relative change in experience that truly impacts upon export performance. The model also reveals that industry effects are relevant.     

An international agreement with full participation to tackle the stock of greenhouse gases

Greenhouse gas emissions build up an atmospheric stock which depreciates over time. We identify weakly renegotiation-proof equilibria with full participation in a game of international emission reduction. Treaties are easier to reach for long-lived than for short-lived gases.     

Heilende Düfte

Aroma?le in der Kinderkrankenpflege - S?uglinge und Aromapflege – geht das zusammen? Inwieweit lassen sich ?therische ?le auch bei Babys und Kindern anwenden? Melanie Ullrich und Ulrike Landschütz zeigen M?glichkeiten auf.     

Interest on Reserves and the Flexibility of Monetary Policy in the Euro Area

This paper shows that remunerating required reserves can increase the flexibility of monetary policy. The remuneration at the current policy rate implies constant net marginal interest costs of holding required reserves. This allows the central bank to change the policy rate also within a reserve maintenance period without inducing a problematic reserve shifting on behalf of the banks. In the euro area, required reserves are remunerated at an average rate. Therefore, the way in which reserves are remunerated has to be changed in order to make use of the advantage of a higher flexibility of monetary policy.     

The Fuzzy Front End of New Product Development for Discontinuous Innovations: A Theoretical Model

The fuzzy front end of the new product development (NPD) process, the time and activity prior to an organization's first screen of a new product idea, is the root of success for firms involved with discontinuous new product innovation. Yet understanding the fuzzy front‐end process has been a challenge for academics and organizations alike. While approaches to handling the fuzzy front end have been suggested in the literature, these tend to be relevant largely for incremental new product situations where organizations are aware of and are involved in the NPD process from the project's beginning. For incremental new products, structured problems or opportunities typically are laid out at the organizational level and are directed to individuals for information gathering. In the case of discontinuous innovations, however, we propose that the process works in the opposite direction—that is, that the timing and likelihood of organizational‐level involvement is more likely to be at the discretion of individuals. Such individuals perform a boundary‐spanning function by identifying and by understanding emerging patterns in the environment, with little or no direction from the organization. Often, these same individuals also act as gatekeepers by deciding on the value to the organization of externally derived information, as well as whether such information will be shared. Consequently for discontinuous innovations, information search and related problems/opportunities are unstructured and are at the individual level during the fuzzy front end. As such, the direction of initial decisions about new environmental information tends to be inward, toward the corporate decision‐making level, rather than the other way around. In order to cope with the special and complex nature of decisions made at the fuzzy front end of NPD for discontinuous innovations, this process is detailed as a series of decisions occurring over three proposed interfaces: boundary, gatekeeping, and project. The difference between each interface lies in the nature of the decisions made: At the boundary and gatekeeping interfaces, the primary impetus is individual‐level decision‐making; at the project interface, decisions occur at the organizational level. By articulating these processes in the form of a model, we achieve two objectives: (1) We outline a more detailed and comprehensive approach to understanding the nature of the front‐end decision making process for discontinuous innovations; and (2) we detail specific propositions for future research on each stage of the process.