Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction,with reference to Spain

In this article, we examine whether variations in the level of public capital across Spain's Provinces affected productivity levels over the period 1996 to 2005. The analysis is motivated by contemporary urban economics theory, involving a production function for the competitive sector of the economy (‘industry’) which includes the level of composite services derived from ‘service’ firms under monopolistic competition. The outcome is potentially increasing returns to scale resulting from pecuniary externalities deriving from internal increasing returns in the monopolistic competition sector. We extend the production function by also making (log) labour efficiency a function of (log) total public capital stock and (log) human capital stock, leading to a simple and empirically tractable reduced form linking productivity level to density of employment, human capital and public capital stock. The model is further extended to include technological externalities or spillovers across provinces. Using panel data methodology, we find significant elasticities for total capital stock and for human capital stock, and a significant impact for employment density. The finding that the effect of public capital is significantly different from zero, indicating that it has a direct effect even after controlling for employment density, is contrary to some of the earlier research findings which leave the question of the impact of public capital unresolved.     

Credit growth,current account and financial depth

Exploring the determinants and dynamics of the current account balance is one of the priorities of academic literature and policy circles. Although the effects of structural variables are deeply analysed, a lesser attention has been paid to the impact of financial variables. Drawing on standard empirical current account models and with a large sample of industrial and developing countries, we report a significant deterioration in the current account balance in case of an increase in the credit growth. Moreover, we find that this link is substantially stronger for the developing ones motivating a closer examination. Therefore, we further advance our analysis and show that credit growth causes a stronger impact on the current account balance for lower levels of financial depth. In other words, at the early stages of financial development, acceleration in the credit growth might cause a larger deterioration in the current account balance; thus, it might be suggested that monetary policy and macro-prudential measures aimed at preventing financial excess might be more effective to reduce the external imbalances at the early stages of financial deepening.     

The cyclicality of bank regulation in a general economic framework

This article utilizes a representative agent model to address how the regulation policies for banks should respond to the general economic condition. With the consideration of a self-fulfilling deposit insurance facility with sufficient bank reserve to meet the expected need of liquidity shock, our model suggests a counter-cyclical capital adequacy requirement in a competitive loan market. The exception might occur when the moral hazard problem becomes very unwieldy and the representative individual is rather risk averse. With regard to the closure policy, we find that it is closely related to the individual’s degree of risk aversion. A counter-cyclical closure policy is recommended when the individual is highly risk averse. Otherwise, a pro-cyclical closure policy is preferred.     

Spillovers and absorptive capacity in the decision to innovate of Spanish firms: the role of human capital

This paper investigates whether the existence of knowledge spillovers and the capacity of firms to assimilate them, which we relate with R&D intensity and some human resource management practices, are associated with the decision to innovate of Spanish firms. In order to do this, we employ data from the ‘Central de Balances’ database, which covers both manufacturing and services firms during the period 2003–2007, and use an estimator proposed by Wooldridge [2005. Simple solutions to the initial conditions problem in dynamic nonlinear panel data models with unobserved heterogeneity. Journal of Applied Econometrics 20, no. 1: 39–54] for dynamic random effects discrete choice models. The empirical exercise provides evidence on the positive link between spillovers and the innovative behaviour of companies, not just for the knowledge generated in the same industry, but also for that generated in the same region or by the public sector. Moreover, this link is stronger for those firms with a higher capacity to absorb those spillovers. This ability not only works through firms’ R&D capabilities, but also through factors such as the quality of the labour force, the share of temporary employment and the amount of resources spent in training. In addition to these factors, we find that innovation performance exhibits a high degree of inertia. Further, some other observed firm characteristics, such as size, sales growth, export behaviour, sector capital intensity or financial structure variables, are also found to be relevant determinants of the likelihood of innovation.     

Does R&D,human capital and FDI matter for TFP in OECD countries?

ABSTRACT

This study investigates the interplay between research and development (R&D), human capital (HC), foreign direct investment (FDI) and total factor productivity (TFP) in OECD countries. We divide the sample into two sub-groups; the European and the non-European states so as to account for underlying country heterogeneity. The analysis follows a panel data approach over the period 1995–2015, taking into account the modelling on non-stationarity, long-run relationships and short-run dynamics with a panel VAR. Both R&D and HC have a positive effect on TFP, whilst FDI has a positive and significant effect only in the case of non-European countries. Moreover, the contribution of R&D is higher than that of HC and FDI in all cases. Thus, based on these findings, policymakers should design and implement policies to increase resources invested in R&D, with a consistent ongoing spending review, to attract foreign direct investment, especially for the majority of the European and some of the non-European countries and to improve education system on a more productive innovation and research base.     

Social economy and employment – the case of Sweden

Recent research has shown growing shares of employment in the social economy (or non-profit sector) both in the European Union and in the United States. In the EU, there seems to be growing hopes that the social economy will be capable of contributing to local progress on the unemployment issue in crisis regions. This paper analyses employment in certain entrepreneurial forms, usually considered belonging to the social economy, in Sweden during the 1990s. The results show considerable regional differences of employment in the social economy, but also that its share of the labor market is very limited. The effect of social-economic organizations on employment, therefore, is probably mainly indirect in as much as they function as platforms for cooperation between firms or else as embryos for enterprises by strengthening local entrepreneurship and helping to nurture a deposit of social capital which has visible effects on private business and jobs. However, these effects need more detailed examinations.     

Capital accumulation and ground-rent in Brazil: 1953–2008

The paper measures the size of primary-sector surpluses in the form of ground-rent appropriated by social subjects other than landowners in Brazil, and assesses their weight in supporting the process of capital accumulation during the period 1953–2008. For that purpose, the paper identifies the mechanisms through which state policies channelled a portion of ground-rent to capital, especially in the industrial sector, assessing their individual impact. The paper finds that transferred ground-rent has complemented surplus-value normally available for appropriation by capital and thus helped sustain its process of accumulation throughout most the period analysed here, including the post-1990 ‘neoliberal’ era.     

The Living Wage,Economic Efficiency,and Socio-Economic Wellbeing in a Competitive Market Economy

Conventional economic wisdom views a Living Wage as costly in term of economic efficiency and competitiveness. I argue, based on x-efficiency theory, that higher wages need not cause any economic harm and can, on the contrary, generate higher levels of material wellbeing. Higher wages can be expected to induce x-efficiency and technological change cost offsets. In this context, an effective living wage, one that is above some subsistence minimum, can have a net efficiency effect on the economy. Therefore, a living wage greater than the wage rate generated by the free market cannot be predicted to generate economic harm. With the institutional parameters in place to realize a living wage, the economic pie can be expected to grow to accommodate the living wage.     

中国房市与股市关联度研究

本文从投资回报角度构建了一个房地产空间市场与房地产资本市场关联度的理论模型。该理论模型显示,本期股价与本期房价呈正相关关系,与下期房价呈负相关关系。本文采用系统GMM估计法对深沪两市61家房地产上市公司1996—2007年度的数据进行实证分析,结果发现,房市与股市具有很强关联度,但房市对股市影响大于股市对房市影响。其次,租金变动对房价和股价变动无显著影响。最后,房价波动具有明显序列相关性,而股价波动具有随机游走特征。     

The Power Underpinnings,and Some Distributional Consequences,of Trade and Investment Liberalisation in Canada

Criticism of trade and investment liberalisation (TAIL) in North America has drawn attention to weak economic performance, wage-profit redistribution, social dumping and fiscal pressure on government programmes as evidence that the TAIL regime has failed to deliver on some of its key promises. This criticism has been unable, however, to establish satisfactory conceptual and empirical connections between the dramatic distributional changes witnessed in the TAIL era and the institutional reorganisation of power that the TAIL regime entrenched. This article will undertake a quantitative assessment of the Canadian political economy to see who the main beneficiaries of the TAIL era have been, contrasting returns to labour and to capital in the pre-TAIL and TAIL eras. Employing tools from the capital as power framework, two pictures are painted: the first picture examines broad changes in the distribution of income and the second examines differential business performance. The evidence from this inquiry suggests that although the official purpose of TAIL was to enhance the prosperity of all Canadians, this trade deal actually represented – both in its intentions and consequences – a political-economic transformation written by dominant capital for dominant capital.