The “sugar rush” from innovation subsidies: a robust political economy perspective

The governments of most advanced countries offer some type of financial subsidy to encourage firm innovation and productivity. This paper analyzes the effects of innovation subsidies using a unique Swedish database that contains firm level data for the period 1997–2011, specifically informa tion on firm subsidies over a broad range of programs. Applying causal treatment effect analysis based on matching and a diff-in-diff approach combined with a qualitative case study of Swedish innovation subsidy programs, we test whether such subsidies have positive effects on firm performance. Our results indicate a lack of positive performance effects in the long run for the majority of firms, albeit there are positive short-run effects on human capital investments and also positive short-term productivity effects for the smallest firms. These findings are interpreted from a robust political economy perspective that reveals that the problems of acquiring correct information and designing appropriate incentives are so complex that the absence of significant positive long-run effects on firm performance for the majority of firms is not surprising.     

Análisis de la histéresis del desempleo en México ante shocks macroeconómicos

This research presents the behavior of the Mexican unemployment rate and shows the dependence with own history and macro variables. The concept of hysteresis or persistence tries to separate this inertia in the unemployment rate and some macroeconomic and endogenous factors. The results show a high inertia in the Mexican labor market, justified by the monetary levels and the dependence of the investment levels, considering the shocks of exports that affect the unemployment in the long term.     

Growing like mushrooms? Sectoral evidence from four large European economies

This paper follows a stream of literature on the empirics of sectoral growth rates, originated by Castaldi and Dosi (Income levels and income growth. Some new cross-country evidence and some interpretative puzzles. LEM Working Paper 2004-18, Sant’Anna School of Advanced Studies, Pisa, Italy, 2004) on two-digit international manufacturing and service sectors, and by Sapio and Thoma’s (The growth of industrial sectors: theoretical insights and empirical evidence from U.S. manufacturing. LEM Working Paper 2006-09, Sant’Anna School of Advanced Studies, Pisa, Italy, 2006) study on four-digit U.S. manufacturing industries. Our aim is to discuss the statistical properties of growth rates in light of a ’mushroom vision’ of growth. In our analysis, we focus on the growth of value added in NACE five-digit sectors in France, Germany, Italy and the United Kingdom between 1995 and 2003. We find that the volatility of sectoral growth rates is negatively correlated with sectoral size, according to a power law, but with steeper slopes than for firms and U.S. sectors. Rescaled sectoral growth rates are well-described by a Laplace distribution in most years. The outcomes of this statistical analysis provide a further empirical foundation to a view of sectoral growth, wherein inter-firm correlations, market concentration, and inter-sectoral feedbacks play a major role.     

Media visibility and corporate social responsibility investment evidence in Spain

Despite the extensive research in both the determinants and the results of corporate social responsibility (CSR), relatively few studies have considered extra-legal institutions as potential determinants of CSR. Our work fills this gap by looking at how media attention affects CSR over a long-term period in a continental European setting. Our results show that media coverage positively affects CSR. Additional scrutiny triggered by media coverage encourages dominant owners to signal their commitment to limiting self-dealing transactions and their orientation toward stakeholders' needs through CSR investments. Additionally, our results reveal that this signaling device offers greater benefits and lower costs in firms where controlling owners show a voting-cash flow wedge. Our results are relevant to different actors such as investors, auditors, and policy makers as they provide solid evidence that media coverage is an important driver of CSR orientation in a continental European setting.     

Home gardens,household nutrition and income in rural farm households in Odisha,India

Home gardens have been an integral part of the recent food-based interventions aimed at stimulating changes in dietary patterns and improving nutrition. However, evidence of their effects on food security, dietary quality, child anthropometry and incomes is limited, particularly among vulnerable populations groups. Using panel data from a sample of approximately 1900 households from vulnerable population groups in Odisha, India, difference-in-differences and other econometric techniques, we analyse the effects of home gardens on food security, dietary quality, child anthropometry and income. On average, home gardens contribute to better household food security, higher dietary quality of men and women but do not contribute to higher children's dietary quality and anthropometry. Also, home gardens increase monthly per adult equivalent incomes by 37% and reduce the prevalence of poverty by 11.7 percentage points. Quantile regression results suggest that home gardens enhance food security and incomes in all quantiles, but richer farmers benefit more than poorer farmers. Overall, home gardens can enhance household food security, dietary quality of men and women, and income gains among vulnerable farming population groups, but they may not suffice to improve child dietary quality and anthropometry.     

Is the US Phillips curve stable? Evidence from Bayesian vector autoregressions*

It has been claimed that the fall in US inflation during the Great Recession was surprisingly small. One possible explanation for this is that the Phillips curve is unstable and that its slope was lower around the Great Recession. We investigate the importance of time-varying parameters using Bayesian vector autoregressions for inflation and unemployment. We find support for time variation in the inflation equation and an unstable Phillips curve that was somewhat flatter between 2005 and 2013. However, conditional forecasts mostly suggest that inflation was not unexpectedly high around the Great Recession, which puts the claim of a “missing disinflation” into question.     

A note of caution on the relation between money growth and inflation

We assess the bivariate relation between money growth and inflation in the euro area and the United States using hybrid time-varying parameter Bayesian VAR models. Model selection based on marginal likelihoods suggests that the relation is statistically unstable across time in both regions. The effect of money growth on inflation weakened notably after the 1980s before strengthening after 2020. There is evidence that this time variation is related to the pace of price changes, as we find that the maximum impact of money growth on inflation is increasing in the trend level of inflation. These results caution against asserting a simple, time-invariant relationship when modeling the joint dynamics of monetary aggregates and consumer prices.