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on European Economics |
| By: | Sebnem Kalemli-Ozcan; Elias Papaioannou; José-Luis Peydró |
| Abstract: | Although recent research shows that the euro has spurred cross-border financial integration, the exact mechanisms remain unknown. We investigate the underlying channels of the euro's effect on financial integration using data on bilateral banking linkages among twenty industrial countries in the past thirty years. We also construct a dataset that records the timing of legislative-regulatory harmonization policies in financial services across the European Union. We find that the euro's impact on financial integration is primarily driven by eliminating the currency risk. Legislative-regulatory convergence explains part of the total effect, whereas trade has no role in explaining the euro's positive effect on integration. |
| JEL: | F10 F15 F30 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15034&r=eec |
| By: | Frauke Skudelny (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper adds to the literature on wealth effects on consumption by disentangling financial wealth effects from housing wealth effects for the euro area. We use two macro-datasets for our estimations, one on the aggregate euro area for the period 1980-2006, and one on the individual euro area countries from1995-2006, using panel data techniques. The impact of all wealth variables on euro area consumption is significant and positive in most specifications for both datasets. The marginal propensity to consume (MPC) out of financial wealth is roughly in line with the literature, with 2.4 to 3.6 cents per euro of financial wealth spent on consumption according to the estimations with euro area aggregate data. However, the panel estimation yields somewhat lower results (0.6 to 1.1 cents). The MPC out of nominal housing wealth lies between 0.7 to 0.9 cents per euro for both datasets. When specifying housing wealth in real terms, i.e. when taking out the effect of volatile house prices, we find similar effects in the times series estimation while the MPC is larger in the panel estimation (2.5 cents). JEL Classification: E21 |
| Keywords: | Housing wealth, financial wealth, consumption, euro area. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:200901057&r=eec |
| By: | Elisabetta Marzano (Department of Economic Studies, Parthenope University of Naples) |
| Keywords: | - |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:prt:wpaper:7_2008&r=eec |
| By: | Jaap W.B. Bos; P.C. van Santen; P. Schilp |
| Abstract: | We examine the reallocation of profits in the European and US banking sectors in the period of 1995 to 2004. Specifically, we ask whether the restructuring of both industries has contributed to an efficient reallocation of assets. Using a revised decomposition framework, we find that US banks are more flexible in the reallocation of profits than their European counterparts. In the US, efficient banks that appropriate assets decrease industry profitability, as expected in a market characterized by a sufficiently high level of competition. In addition, economies of scale are exploited more in the US than in Europe. Regulatory reforms in the EU, in particular in response to the current crisis, should therefore foster a more closely integrated European market. |
| Keywords: | market structure, efficiency, restructuring, stochastic frontier, banking |
| JEL: | O47 O30 D24 C24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0912&r=eec |
| By: | Emanuele BACCHIOCCHI; Massimo FLORIO; Marco GAMBARO |
| Abstract: | We study the impact on consumers of privatization and liberalization in the telecommunication sector for 15 EU Countries. Policy reforms are summarized by the OECD regulatory indicators (REGREF), that considers the extent of privatization, vertical disintegration, and market entry. After controlling for other country variables, we first test the impact of ownership and regulatory changes on productivity and consumer prices. In a second step, we consider the Eurobarometer data on consumers’ satisfaction about quality and prices of the telecommunication service. The analysis confirms the importance of market entry regulation in reducing prices and increasing productivity performances, but minimize the role played by privatization per se. The latter and liberalization of the telecommunication market play a role in explaining the consumers’ satisfaction about prices and quality of the service, but country fixed effects are more important. Overall, our findings offer only mixed evidence, and somehow contradict, the hypothesis of welfare dominance of a unique reform paradigm in the telecom industry. |
| Keywords: | Telecom industry liberalization, privatization, impact on European consumers |
| JEL: | L32 L33 L96 |
| Date: | 2008–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2008-10&r=eec |
| By: | Chiara DEL BO; Massimo FLORIO |
| Abstract: | In this paper we examine the return of public investment in the EU regions. We consider different forms of infrastructure capital by examining the relationship between a set of infrastructure indicators and economic performance at the NUTS2 level with an empirical model derived from the production-function approach. From a social planner’s perspective, we want to see which form of infrastructure investment has higher returns, considering structural differences in regions. The main contribution of this paper is to consider the impact of different types of infrastructure on growth, disaggregated at the regional level in the European Union, with an explicit focus on the New Member States, and correcting for spatial dependence and heterogeneity issues. We find that the highest rates of return are associated mainly with TLC, quality and accessibility of the region’s transportation network, while endowment of traditional road and railway infrastructure has a positive but slightly lower impact. We also contribute to the debate on convergence, finding that the β-convergence hypothesis holds also when the model encompasses several controls. |
| Keywords: | Infrastructure capital, regional growth, convergence, spatial econometrics. |
| JEL: | H54 O11 E62 R11 |
| Date: | 2008–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2008-37&r=eec |
| By: | Friedrich Schneider |
| Abstract: | In order to guarantee a further successful functioning of the enlarged European Union a Federal European Constitution is proposed. Six basic elements of a future European federal constitution are developed: the European commission should be turned into an European government and the European legislation should consist of a two chamber system with full responsibility over all federal items. Three further key elements are the subsidiarity principle, federalism and the secession right, which are best suited to limiting the domain of the central European authority to which certain tasks are given, such as defense, foreign and environmental policy. Another important feature is direct democracy, which provides the possibility for European voters to participate actively in the political decision making, to break political and interest group cartels, and to prevent an unwanted shifting of responsibilities from EU member states to the European federal level. |
| JEL: | D72 D78 H7 H11 |
| Date: | 2009–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:83&r=eec |
| By: | Ingo Fender (Bank for International Settlements (BIS), Monetary and Economic Department, Centralbahnplatz 2, 4002 Basel, Switzerland.); Martin Scheicher (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper investigates the market pricing of subprime mortgage risk on the basis of data for the ABX.HE family of indices, which have become a key barometer of mortgage market conditions during the recent financial crisis. After an introduction into ABX index mechanics and a discussion of historical pricing patterns, we use regression analysis to establish the relationship between observed index returns and macroeco-nomic news as well as market based proxies of default risk, interest rates, liquidity and risk appetite. The results imply that declining risk appetite and heightened concerns about market illiquidity - likely due in part to significant short positioning activity - have provided a sizeable contribution to the observed collapse in ABX prices since the summer of 2007. In particular, while fundamental factors, such as indicators of housing market activity, have continued to exert an important influence on the subordinated ABX indices, those backed by AA and AAA exposures have tended to react more to the general deterioration of the financial market environment. This provides further support for the inappropriateness of pricing models that do not sufficiently account for factors such as risk appetite and liquidity risk, particularly in periods of heightened market pressure. In addition, as related risk premia can be captured by unconstrained investors, ABX pricing patterns appear to lend support to government measures aimed at taking troubled assets off banks’ balance sheets - such as the US Troubled Asset Relief Program (TARP) in its original form. JEL Classification: E43, G12, G13, G14. |
| Keywords: | ABX index, mortgage-backed securities, pricing, risk premia. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:200901056&r=eec |
| By: | Alex Bryson; John Forth; Patrice Laroche |
| Abstract: | Using nationally representative workplace surveys we examine the relationship between unionization and workplace financial performance in Britain and France. We find that union bargaining is detrimental to workplace performance in Britain and that this effect is larger when unionization is endogenized. In France, union bargaining is associated with poorer workplace performance but the effect disappears once unionization is treated as endogenous. However, high levels of union density do have a negative impact on workplace performance in France. In Britain the union effect does not rise with union density. |
| Keywords: | Trade union, firm performance, France, Britain |
| JEL: | J51 L25 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0920&r=eec |
| By: | Orietta DESSY; Marco GAMBARO |
| Abstract: | After three decades of decreasing admissions, cinema attendance in Europe showed a significant rise during the nineties despite the competition of several audiovisual media. This growth in ticket sales must be compared with the declining share of exhibition in total film revenues. In this period exhibition started to be for movies the first window of a complex multi release strategy that includes home video, various form of pay television and finally free tv. Exhibition is still very important to signal the quality of a movie revealing through the tickets sold the consumer preferences, but its role in overall revenues of film industry has been declining from a share of 50% in 1980 to a share of 15-20% in 2000 at least for Hollywood productions. There are different explanations in literature for this growth ranging from a different approach in film production to a spillover effect due to the rising production costs, till the renovation work and improved condition in movie theatres. In this paper we try to test the role of multiplex. While usually multiplex is analysed in supply side since it can reduce the cost of exhibition through scale economies in several function, we focus on demand side. The positive role of multiplex is related to the risk reduction of the audience and the improved condition of new theatres. The possible negative role is related to the competition of big multiplex chains towards traditional theatres that can be moved out of market thus reducing eventually theatres density and overall supply. We explore the movie demand evolution in Europe with a data set of 15 countries from 1989 to 2003. We estimate with a panel approach a simple demand function of film exhibition with yearly tickets per inhabitant as dependent variable where as expected price coefficient is negative and income coefficient is positive. Multiplex diffusion, indicated as the percentage of multiplex seats over total seats, appears to be moderately positive and is 1% significant. The results are robust to different model specification. As we can see from Table 1, gdp pro-capita is significant with the expected positive sign showing an elasticity of 0.37, thus movies cannot be identified as a luxury good. Price is significant, with an elasticity of -0.26. The demand seem to be quite inelastic respect to price and the value is lower than what is found in some other studies conducted at a national level. Multiplex has a positive impact on the demand for cinema, with an elasticity of 0.07. The coefficient.Is rather small but the effect is net once considered the rise in total supply captured by the variable seatpop that has a strong positive value confirming that competition in exhibition work in geographical limited markets and that the availability of theatres influence positively the demand. The elasticity value of 0.5 suggest anyway that marginal capacity expansion display diminuishing returns.Contrary to the view of many theatre owners, multiplexes do not simply get market share from traditional theatres but contribute to an overall demand growth due probably to the service innovation they propose.We measured the effect of other demographic factor like the share of young people or the literacy level but we found them not significant and therefore we exclude them from the final equations.In future works we plan to include some measures of substitute consumption like television or DVD. |
| Keywords: | Consumer economics, industry studies, performing arts |
| JEL: | D12 L92 |
| Date: | 2008–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2008-25&r=eec |
| By: | Kwok Tong Soo; Ching-Fu Chen |
| Abstract: | This paper estimates the efficiency of students in English universities using Data Envelopment Analysis (DEA) and a new dataset which is able to capture the behaviour of university students. Taking as the output the classification of a university degree, we use as inputs teaching hours and quality, entry qualifications, and the effort level. We find that university students differ in terms of the efficiency with which they use inputs in producing good degrees. In a second stage, we explore the determinants of the efficiency of university students using a truncated regression model. Higher student efficiency is found to be positively and significantly related to university size, and negatively and significantly related to the proportion of part-time students and the number of academic staff. The quality of a university has no significant impact on the efficiency of its students once endogeneity of university quality is controlled for. |
| Keywords: | Data Envelopment Analysis (DEA); Efficiency; Education |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:006024&r=eec |