Transit migration

Unauthorized international migration to the advanced countries has become increasingly more costly and indirect. The hazardous land and sea routes that pass through one or more transit countries offer liquidity‐constrained individuals an opportunity to economize on the pecuniary cost of migration as well as to work along the way to pay for the next leg of the journey. This paper analyzes the optimal behavior of transit migrants and examines its implications for the effectiveness of immigration control measures of the transit and final‐destination countries in deterring unauthorized migration. Strengthening of border controls at the final destination is shown to increase the relative effectiveness of internal enforcement measures of the transit countries, while tougher internal enforcement in the transit countries increases the relative effectiveness of border controls at the final destination.     

An extended matrix of economic growth and corresponding dynamic system

This paper considers an extended matrix of growth and corresponding dynamic system. The aim of this consideration is to define and analyse different cases of interdependences based on the extended matrix of growth. The system on the basis of the extended matrix of growth is built on the general structure of sectors growth. This generalized structure is expressed by the direct and indirect growth rates among sectors and exogenous factors. The main characteristic of this system is that it can be formulated and examined under various conditions. This is because of the fact that growth is characteristic of all economic processes, and the extended matrix of growth has the capability of including and expressing the structural and dynamic aspects of the interdependence of processes. In this sense the extended matrix of growth is used to examine various systems of interdependence.     

Misspecified Recovery

Asset prices contain information about the probability distribution of future states and the stochastic discounting of those states as used by investors. To better understand the challenge in distinguishing investors' beliefs from risk‐adjusted discounting, we use Perron–Frobenius Theory to isolate a positive martingale component of the stochastic discount factor process. This component recovers a probability measure that absorbs long‐term risk adjustments. When the martingale is not degenerate, surmising that this recovered probability captures investors' beliefs distorts inference about risk‐return tradeoffs. Stochastic discount factors in many structural models of asset prices have empirically relevant martingale components.     

Cost efficiency of Slovenian water distribution utilities: an application of stochastic frontier methods

This study estimates cost inefficiency and economies of scale of Slovenian water distribution utilities over the 1997–2003 period by employing several different stochastic frontier methods. The results indicate that significant cost inefficiencies are present in the utilities. An introduction of incentive-based price regulation scheme might help resolve this problem. However, the inefficiency scores obtained from different cost frontier models are not found to be robust. The levels of inefficiency estimates as well as the rankings depend on the econometric specification of the model. The established lack of robustness can be at least partly explained by different ability of the models to separate unobserved heterogeneity from inefficiency. Newly proposed true fixed effects model (Greene, J Econom 126:269–303, 2005; J Prod Anal 23(1):7–32, 2005) appears to perform better than the conventional panel data models with respect to distinguishing between unobserved heterogeneity and inefficiency. On the other hand, different models produce fairly robust results with respect to estimates of economies of output density, customer density and economies of scale. The optimal size of a company is found to closely corresponds to the sample median. Economies of scale are found in small-sized utilities, while large companies exhibit diseconomies of scale.

The Effect of Terrorist Incidents on Capital Flows

Previous work has shown that terrorism has significant negative impact on countries' economies. We explore this relationship in more detail. Using an unbalanced panel of more than 160 countries for up to 25 years and the Global Terrorism Database (GTD) we show a decrease in foreign direct investment (FDI) as a consequence of terrorism. We also find evidence that FDI flows are more sensitive to terrorism than either portfolio investments or external debt flows. Finally, we test the hypothesis that terrorism has negative spill‐over effects on FDI flows into neighboring countries and find evidence that cultural, but not geographical, closeness matters.     

The impact of China's imports on European Union industrial employment

As the EU's biggest supplier of imported goods and a second trading partner, China has become an increasingly important actor on the global economic scene. This paper reports new evidence through analyzing whether the EU labour market is affected by exposure to imports from China. Drawing on a panel dataset of 27 EU countries, over the 2003–2013 period, and using the pooled mean group estimator, the results show that imports from China have a negative effect on industrial employment. This result holds separately for the all analyzed categories: all products, manufactured products as well as for the sub‐groups.     

WILL THE “TRUE” LABOR SHARE STAND UP? AN APPLIED SURVEY ON LABOR SHARE MEASURES

Labor's share of income is a key variable in economics. It plays a leading role in analysis of (in)equality, globalization, technical change, growth theories, etc. Notwithstanding this broad application, there are many different definitions of the labor share. Understanding and synthesizing those differences is the purpose of this applied survey. Empirical measures may vary reflecting the allocation of income components that cannot be directly ascribed to capital or labor. We examine the alternative assumptions made in the literature in this regard and quantify and motivate the resulting discrepancies. Focusing (mostly) on US data, we show that different measures can have very distinct properties in terms of the observed stochastic trends, shares of short‐, medium‐, and long‐run variation and volatilities, persistence and mean‐reversion properties, and susceptibility to structural breaks. For instance, while “short‐run” properties of the surveyed labor share measures are relatively consistent across all definitions (and countercyclical), their “medium‐” and “long‐run” trends may diverge substantially (and are procyclical). To substantiate our analysis, we document the implications of discrepancies in the empirical labor share definition for growth accounting, analyzing the effect of technology shocks, and for estimating inflation dynamics.     

Sources of productivity differentials in manufacturing in post-transition urban South-East Europe

The paper analyses the effects of urbanization and localisation economies on manufacturing firms’ productivity across urban landscapes in post-transition South-East European (SEE) countries. Fixed-effects panel data estimations on a large sample of firms show that the factors accounting for productivity advantages of manufacturing firms in urban post-transition SEE are related to the firms and to the environment in which these firms operate. Firms located in diversified cities benefit from a productivity premium generated in this type of agglomeration, while no evidence was found that the relative specialization across industries has any effect on firm productivity levels.     

Enforcement Activity in Consumer Protection Regulation in Croatia

The law regulating consumer protection in the Republic of Croatia began its intensive development through the process of harmonization of Croatian legislation with EU law. Apart from the approximation of Croatian legislation with the acquis, in the pre-accession process, Croatia also undertook obligations to introduce and develop corresponding mechanisms for the efficient enforcement of consumer protection in practice. The development of consumer protection policy was recognized as a priority area in Croatia, and even before full membership, the process of implementing new directives in the area of consumer protection ran almost in parallel to and at the same pace as that of the Member States. Alongside the harmonization of its legislation with the EU consumer acquis, Croatia started developing a regulatory enforcement structure, including a whole series of mechanisms to achieve individual and collective protection of consumer rights. Among other things, the satisfactory development of regulatory enforcement activities in consumer protection was one of the preconditions for the successful completion of the accession negotiations and for signing the accession treaty. At the same time, the article suggests that in the area of both the individual and collective realization of consumer protection, there is a need for further progress through, on the one hand, developing administrative capacities and enhancing access to justice, as well as developing a system of out-of-court settlement of consumer disputes on the other.