Technological Intensity of Government Demand and Innovation
Viktor Slavtchev, Simon Wiederhold
Abstract
Governments purchase everything from airplanes to zucchini. This paper investigates whether the technological intensity of government demand affects corporate R&D activities. In a quality-ladder model of endogenous growth, we show that an increase in the share of government purchases in high-tech industries increases the rewards for innovation, and stimulates private-sector R&D at the aggregate level. We test this prediction using administrative data on federal procurement performed in US states. Both panel fixed effects and instrumental variable estimations provide results in line with the model. Our findings bring public procurement within the realm of the innovation policy debate.
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What Drives Banking Sector Fragility in the Eurozone? Evidence from Stock Market Data
Stefan Eichler, Karol Sobanski
Journal of Common Market Studies,
No. 4,
2012
Abstract
This article explores the determinants of banking sector fragility in the eurozone. For this purpose, a stock-market-based banking sector fragility indicator is calculated for eight member countries from 1999 to 2009 using the Merton model (1974). Using a panel framework, it is found that the macroeconomic environment, the structure of the banking sector and the intensity of banking regulation all have an effect on banking sector fragility in the eurozone.
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The Structural Determinants of the US Competitiveness in the Last Decades: A 'Trade-Revealing' Analysis
Massimo Del Gatto, Filippo di Mauro, Joseph Gruber, Benjamin Mandel
ECB Working Paper,
No. 1443,
2012
Abstract
We analyze the decline in the U.S. share of world merchandise exports against the backdrop of a model-based measure of competitiveness. We preliminarily use constant market share analysis and gravity estimations to show that the majority of the decline in export shares can be associated with a declining share of world income, suggesting that the dismal performance of the U.S. market share is not a sufficient statistic for competitiveness. We then derive a computable measure of country-sector specific real marginal costs (i.e. competitiveness) which, insofar it is inferred from actual trade ows, is referred to as 'revealed'. Brought to the data, this measure reveals that most U.S. manufacturing industries are losing momentum relative to their main competitors, as we find U.S. revealed marginal costs to grow by more than 38% on average. At the sectoral level, the "Machinery" industry is the most critical.
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The Internationalization of Science and Its Influence on Academic Entrepreneurship
S. Krabel, D. S. Siegel, Viktor Slavtchev
Journal of Technology Transfer,
No. 2,
2012
Abstract
We examine whether scientists employed in foreign countries and foreign-educated native researchers are more “entrepreneurial” than their “domestic” counterparts. We conjecture that foreign-born and foreign-educated scientists possess broader scientific skills and social capital, which increases their likelihood that they will start their own companies. To test this hypothesis we analyze comprehensive data from researchers at the Max Planck Society in Germany. Our findings provide strong support for the conjecture that academic entrepreneurship can be stimulated by facilitating the mobility of scientists across countries.
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The Impact of Banking and Sovereign Debt Crisis Risk in the Eurozone on the Euro/US Dollar Exchange Rate
Stefan Eichler
Applied Financial Economics,
No. 15,
2012
Abstract
I study the impact of financial crisis risk in the eurozone on the euro/US dollar exchange rate. Using daily data from 3 July 2006 to 30 September 2010, I find that the euro depreciates against the US dollar when banking or sovereign debt crisis risk increases in the eurozone. While the external value of the euro is more sensitive to changes in sovereign debt crisis risk in vulnerable member countries than in stable member countries, the impact of banking crisis risk is similar for both country blocs. Moreover, rising default risk of medium and large eurozone banks leads to a depreciation of the euro while small banks’ default risk has no significant impact, showing the relevance of systemically important banks with regards to the exchange rate.
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The Distorting Impact of Capital Controls
Makram El-Shagi
German Economic Review,
No. 1,
2012
Abstract
This paper uses panel data to show that capital controls have a significant impact on international interest rate differentials. Various types of controls can be distinguished within the data. The analysis shows that the aforementioned effects of capital controls on interest rates are especially strong in the case of capital import controls on portfolio capital; the implementation of these controls has been suggested in the wake of the Asian Crisis to prevent further crises. The results presented herein contradict the hypothesis that capital controls can achieve a restructuring of the maturity of capital inflows without a distortion in international capital allocation.
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Protect and Survive? Did Capital Controls Help Shield Emerging Markets from the Crisis?
Makram El-Shagi
Economics Bulletin,
No. 1,
2012
Abstract
Using a new dataset on capital market regulation, we analyze whether capital controls helped protect emerging markets from the real economic consequences of the 2009 financial and economic crisis. The impact of the crisis is measured by the 2009 forecast error of a panel state space model, which analyzes the business cycle dynamics of 63 middle-income countries. We find that neither capital controls in general nor controls that were specifically targeted to derivatives (that played a crucial role during the crisis) helped shield economies. However, banking regulation that limits the exposure of banks to global risks has been highly successful.
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Towards Unrestricted Public Use Business Microdata: The Synthetic Longitudinal Business Database
John M. Abowd, Ron S. Jarmin, Satkartar K. Kinney, Javier Miranda, Jerome P. Reiter, Arnold P. Reznek
International Statistical Review,
No. 3,
2011
Abstract
In most countries, national statistical agencies do not release establishment-level business microdata, because doing so represents too large a risk to establishments’ confidentiality. One approach with the potential for overcoming these risks is to release synthetic data; that is, the released establishment data are simulated from statistical models designed to mimic the distributions of the underlying real microdata. In this article, we describe an application of this strategy to create a public use file for the Longitudinal Business Database, an annual economic census of establishments in the United States comprising more than 20 million records dating back to 1976. The U.S. Bureau of the Census and the Internal Revenue Service recently approved the release of these synthetic microdata for public use, making the synthetic Longitudinal Business Database the first-ever business microdata set publicly released in the United States. We describe how we created the synthetic data, evaluated analytical validity, and assessed disclosure risk.
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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe
Marina Grusevaja, Toralf Pusch
Abstract
Structural Funds are the main instrument of the EU cohesion policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently, the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries, we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results, reference is
made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.
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Labor Demand During the Crisis: What Happened in Germany?
Claudia M. Buch
IZA. Discussion Paper No. 6074,
2011
Abstract
In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms’ labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these
estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.
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