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on European Economics |
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Issue of 2024‒03‒04
twenty-two papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Dimitrios Kanelis; Pierre L. Siklos |
| Abstract: | We analyze the introductory statements of the ECB president and derive new sentiment indicators for the euro area based on a novel approach. To evaluate sentiment, we utilize a Large Language Model, namely FinBERT, which classifies the verbal sentiment of economics and finance-related textual data. We find that the ECB's conveyed sentiment about monetary policy, which is influenced by the economic outlook and the state of the euro area macroeconomy as expressed in speeches, plays a significant role in shaping the content of press conferences following a Governing Council decision. In contrast, speech sentiment regarding financial stability does not significantly influence introductory statements. |
| Keywords: | ECB, communication, financial stability, FinBERT, monetary policy, sentiment analysis |
| JEL: | E50 E58 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2024-10&r=eec |
| By: | Kho, Stephen |
| Abstract: | I study the transmission of monetary policy to deposit rates in the euro area with a focus on asymmetries and the role of banking sector concentration. Using a local projections framework with 2003-2023 country-level and bank-level data for thirteen euro area member states, I find that deposit rates respond symmetrically to an unexpected tightening or easing of monetary policy. However, more concentrated domestic banking sectors do pass-on unexpected monetary tightening (easing) more slowly (quickly) than less concentrated banking sectors, which contributes to a temporary divergence of deposit rates across the euro area. These results suggest that heterogeneity in the degree of banking sector concentration matters for the transmission of monetary policy to deposit rates, which in turn may affect banking sector profitability. JEL Classification: D40, E43, E52, G21 |
| Keywords: | banking sector, deposit rates, market power, monetary policy |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242896&r=eec |
| By: | Gόrnicka, Lucyna; Koester, Gerrit; Radowski, Daniel; Gautier, Erwan; Peinado, Mario Izquierdo; Stiglbauer, Alfred; Wittekopf, David; Puente, Sergio; Duarte, Claudia; Martins, Fernando; Basso, Gaetano; Lydon, Reamonn; Ploj, Gasper; Polemidiotis, Marios; Pönkä, Harri; Obstbaum, Meri; Petroulas, Pavlos; Veiga, Cindy; Beka, Jan; Benatti, Nicola; Fagandini, Bruno; Healy, Peter; Nizzi, Raffaella; Colonna, Fabrizio; Volkerink, Maikel; Antonopoulos, Christos; Bing, Matthias; Piryankov, Evgeni; Jimenez, Angel Luis Gomez; Saks, Yves; Coppens, Barbara; D’Amuri, Francesco; Zajankauskaitė, Justina; Pribuišis, Kristupas; Lindič, Mojca; Doliak, Michal; Monza, Aurora; Llevadot, Marc Roca i; Polichetti, Gaetano; Gardin, Giulia |
| Abstract: | This paper introduces innovative, newly developed forward-looking indicators of negotiated wage growth in the euro area using data on collective bargaining agreements from seven countries: Germany, France, Italy, Spain, the Netherlands, Austria and Greece. The paper demonstrates how agreement-level data can be used to study drivers of aggregate negotiated wage growth, as well as monitor the breadth of wage increases and account for time-varying factors such as one-off payments, when assessing wage pressures. Lastly, the paper shows that the new indicators can provide reliable signals about current and future developments of wage pressures in the euro area while also serving as important cross-checking tools for negotiated wage growth forecasts. JEL Classification: E24, J31, J50 |
| Keywords: | collective bargaining, negotiated wages, wage forecasting, wage rigidity |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2024338&r=eec |
| By: | Reis, Ricardo |
| Abstract: | A central bank that faces inflation above target may fail to bring it down. This article discusses six ways in which this happens because the central bank is dominated by: misjudgment, expectations, fiscal policy, financial markets, recession fears, or external forces. It applies this approach to the challenge facing the ECB in 2023-24. The hope is that the factors identified can serve as warning signs for what to avoid. |
| Keywords: | monetary policy; interest rates; central bank independence; OUP deal |
| JEL: | E58 E50 E31 |
| Date: | 2023–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120728&r=eec |
| By: | Benoit Nguyen; Davide Tomio; Miklos Vari |
| Abstract: | Most central banks exited their decade-long accommodative monetary policy cycle by first raising rates, rather than starting by reducing their balance sheet. We show that the scarcity of government bonds---which were purchased under QE and held by the Eurosystem---reduces the transmission of rate hikes to money market rates. In July 2022, when the ECB increased its policy rates by 50bp for the first time in a decade, rates of repo transactions collateralized by the scarcest bonds increased by only 35bp. We show that this imperfect pass-through to repo rates is priced in treasury yields. Heterogeneous bond holdings across institutions imply that collateralized funding costs vary significantly across European institutions. |
| Keywords: | Natural Disasters; Extreme Weather; Inflation; Disaggregate Inflation; Inequality; Price Gouging |
| JEL: | E51 E52 E58 G21 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:934&r=eec |
| By: | Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre and Kiel Centre for Globalization) |
| Abstract: | The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related. |
| Keywords: | Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:427&r=eec |
| By: | Stavros Athanasiadis (Faculty of Economics, University of South Bohemia In České Budějovice) |
| Abstract: | The enlargement of the European Union (EU) to include Central and South-Eastern European countries in 2004 and 2007 launched an integration process that unifies the economies and financial markets of member states and enables the convergence of these two areas. This study focuses on analyzing the development and similarity of the European insurance sector after the EU enlargement. We study 34 European insurance markets from 2004 until 2021 based on a certain set of indicators that characterize insurance markets, such as Insurance Density, Insurance Penetration and Gross Written Premiums to name a few. With a functional clustering method applied to such indicators, we try to reveal whether there are similarities between the individual countries that could explain the European insurance market homogeneity and convergence via the EU integration process. The proposed method has also a practical importance since it provides visualization of the clustering results through the construction of global envelopes. This study supports the works of EU policy makers that have a major impact on the ability of further integration of the European insurance market. |
| Keywords: | European insurance markets, enlargement EU, convergence, insurance integration, insurance market indicators, functional clustering, global rank envelope |
| JEL: | C38 F15 F36 G22 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:boh:wpaper:06_2023&r=eec |
| By: | Anne Duquerroy; Klodiana Istrefi; Sarah Mouabbi |
| Abstract: | We examine the effects of uncertainty regarding the path of interest rates on firms’ decisions in the euro area. In the presence of heightened short-term interest rate uncertainty, firms tend to decrease their future investments and hiring activities. They also adopt a more cautious approach by hoarding cash and cutting dividend payments. Firm heterogeneity is crucial, as the negative effect on future investment is magnified when firms are ex-ante exposed to interest rate risk, face financial constraints or lack hedging strategies. These effects operate mainly through a financing and cash flow channel, highlighting the presence of a Finance-Interest-Rate-Uncertainty multiplier, whereby the effects of this uncertainty are amplified by the presence of financial constraints. Conversely, we find no significant effects of long-term interest rate uncertainty on firm decisions. |
| Keywords: | Interest Rate Uncertainty, Firm Heterogeneity, Financial Constraints, Rollover Risk, Investment, Employment, Cash Holding, Euro Area |
| JEL: | E43 E52 E22 G32 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:940&r=eec |
| By: | Kathrine von Graevenitz; Elisa Rottner; Philipp M. Richter |
| Abstract: | Relative prices determine competitiveness of different locations. In this paper, we focus on the role of regulatory differences between Germany and other EU countries which affect the shadow price of carbon emissions. We calibrate a Melitz-type model, extended by firms’ emissions and abatement decisions using data on aggregate output, trade and emissions. The parameter estimates are estimated from the German Manufacturing Census. The quantitative model allows us to recover a measure of how regulatory stringency evolved in the EU and Germany in terms of an implicit carbon price paid on emissions. This price reflects energy and carbon prices in addition to command-and-control measures and decreased from 2005 to 2019 in most sectors – both in Germany and other EU countries. The trend is more pronounced in Germany than in the rest of the EU. In counterfactual analyses, we show that this intra-EU difference has substantially increased German industrial emissions. Had the EU experienced the same decrease in implicit carbon prices as Germany, German emissions would have been substantially lower. Germany has increasingly become a pollution haven. |
| Keywords: | Carbon emissions, climate policy, manufacturing, international trade, heterogeneous firms |
| JEL: | F18 H23 L60 Q56 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_503&r=eec |
| By: | Andrea Bastianin (University of Milan and Fondazione Eni Enrico Mattei); Elisabetta Mirto (University of Milan); Yan Qin (London Stock Exchange Group); Luca Rossini (University of Milan and Fondazione Eni Enrico Mattei) |
| Abstract: | Putting a price on carbon – with taxes or developing carbon markets – is a widely used policy measure to achieve the target of net-zero emissions by 2050. This paper tackles the issue of producing point, direction-of-change, and density forecasts for the monthly real price of carbon within the EU Emissions Trading Scheme (EU ETS). We aim to uncover supply- and demand-side forces that can contribute to improving the prediction accuracy of models at short- and medium-term horizons. We show that a simple Bayesian Vector Autoregressive (BVAR) model, augmented with either one or two factors capturing a set of predictors affecting the price of carbon, provides substantial accuracy gains over a wide set of benchmark forecasts, including survey expectations and forecasts made available by data providers. We extend the study to verified emissions and demonstrate that, in this case, adding stochastic volatility can further improve the forecasting performance of a single-factor BVAR model. We rely on emissions and price forecasts to build market monitoring tools that track demand and price pressure in the EU ETS market. Our results are relevant for policymakers and market practitioners interested in quantifying the desired and unintended macroeconomic effects of monitoring the carbon market dynamics. |
| Keywords: | Bayesian inference, Carbon prices, Climate Changes, EU ETS, Forecasting |
| JEL: | C11 C32 C53 Q02 Q50 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2024.02&r=eec |
| By: | Portes, Jonathan (King's College London) |
| Abstract: | The end of free movement and the introduction of the post-Brexit migration system represent the most important changes to the UK migration system in half a century. Coinciding with the aftereffects of the pandemic, the result has been very large changes both to the numbers of those coming for work and study, and to their composition, both in terms of countries of origin and in the sectors and occupations of new migrants. It has also resulted in a political backlash, resulting in significant further changes to the system announced in December 2023. I discuss the evidence to date of the impact of recent migration trends on the UK economy and labour market, distinguishing between different sectors. |
| Keywords: | migration, productivity, labour markets, Brexit |
| JEL: | F22 J48 J61 J68 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16728&r=eec |
| By: | Messner, Teresa; Rumler, Fabio |
| Abstract: | It has been widely documented that households experience different inflation rates which are generally concealed in aggregate price indices. Using scanner data from a large household panel for Austria, we analyse price dynamics faced by individual households and try to explain the causes for the observed inflation differences. Considering not only consumption shares but also the specific product prices paid by households, we find a considerable and persistent degree of heterogeneity among household inflation rates. These are also quite variable over time, resulting from varying consumption baskets and active product substitution, allowing households to reduce their inflation exposure substantially. Factors like age and shopping behavior of households explain some of the inflation differences, whereas income does not seem to have a notable influence in normal times. However, during high inflation periods, the lowest income group is found to face higher inflation rates than other income groups. JEL Classification: D12, D30, E31 |
| Keywords: | heterogeneity, household inflation, micro data |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242894&r=eec |
| By: | Andrei, Liviu Catalin; Andrei, Dalina Maria |
| Abstract: | Béla Balassa, the most significant theorist of the economic integration, dares to argue that this is just one for all multi-country areas, e.g. despite economic growth or development that might be different for different countries. Then, the diversity in terms of integration would be the same as the integration stages. In Europe and Latin America, where integration initiatives really worked, there is just the EU also accepting to aim the integration up to its final Balassa’s stage. They had got the monetary integration (union) and this even as un unprecedented union around a single currency used by several countries – not even Balassa, this time, thought about this, despite that the theorist had a few words about aspects like currency, taxation, politic integration and even the federal State. Now things got also different: around the year 2000 there was the “Happy new Euro!” with its fire-works feast, but the aftermath of these was coming to be different, i.e. with crises like “Lehman-Brothers”, “Brexit”, the pandemic and not only, see a European Constitution project rejected by the French, Danish and Dutch voters, while the Union’s ambitions went to its enlargement besides, and lastly there is the war in Ukraine, with its consequences of all kind. So, what about the integration process? All agree it is not complete, but just singular voices do warn about that staying in the present monetary union stage would be not viable and even dangerous for all, here including for the integration started many decades ago – i.e. the fiscal union is supposed to accompany the monetary one, as the rule that ever was for all monetary unions. |
| Keywords: | politique monétaire ; les banques centrales ; politique fiscale ; théorie monétaire moderne ; intégration économique et théorie sur. |
| JEL: | E02 E52 E58 E62 F15 |
| Date: | 2024–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120111&r=eec |
| By: | Yuliana Loginova (National Research University Higher School of Economics); Maria Semenova (National Research University Higher School of Economics) |
| Abstract: | This paper explores the impact of board gender diversity on bank performance during the COVID-19 crisis. Using data from 87 European banks from 2015 to 2021, we show that the presence of women on bank boards had a positive impact on bank profitability during the COVID-19 crisis. This effect is more pronounced in countries where the morbidity rate is higher. Our results suggest a negative relationship between the women on bank boards and bank credit risk during the pandemic. The impact of women on insolvency risk, however, appears only for banks with relatively large boards. |
| Keywords: | board gender diversity, COVID-19, bank profitability, credit risk |
| JEL: | G21 G34 O16 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:94/fe/2024&r=eec |
| By: | Kiss, Regina; Strasser, Georg |
| Abstract: | This paper studies the nature, evolution, and sources of inflation heterogeneity across households in France and Germany. Inflation differences are large and persistent. The two main sources of inflation heterogeneity are spatial differences in the prices paid for the same product and differences in the household-specific variety choice within a category. Income heterogeneity by itself is not a relevant determinant of inflation heterogeneity, but due to its correlation with household behaviour, a significant and timevarying inflation difference between income groups emerges. Substitution is strongly behaviour-driven and largely detached from the relative price. The dispersion of the household-level elasticity of substitution does not fully account for the heterogeneity of substitution behaviour. Substitution does not reduce the dispersion of inflation, confirming the central role of preference heterogeneity in inflation measurement. JEL Classification: D12, D30, E31, F45 |
| Keywords: | household heterogeneity, inequality, inflation, shopping behaviour, substitution |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242898&r=eec |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Ariell Reshef (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Giulio Vannelli (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Increases in upstream, forward GVC integration directly reduce labor shares, mostly through reductions in fabrication, but also via other business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is "upstream-biased". Rapid robotization in China shaped robotization in Europe and, therefore, relative demand for labor there. |
| Keywords: | labor share, functional specialization, global value chains, upstreamness, technological change, automation, robots |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-04346960&r=eec |
| By: | Jan Behringer; Lena Dräger; Sebastian Dullien; Sebastian Gechert |
| Abstract: | We use novel German survey data to investigate how perceptions and information about public finances influence attitudes towards public debt and fiscal rules. On average, people strongly underestimate the debt-to-GDP ratio, overestimate the interest-to-tax-revenue ratio and favor a tighter German debt brake. In an information treatment experiment, people consider public debt to be a more (less) severe problem once they learn the actual debt-to-GDP or interest-to-tax-revenue ratio is higher (lower) than their estimates. However, the treatment effects partly vanish when anchoring respondents’ beliefs with historical public debt figures. We find no treatment effects on attitudes towards the debt brake. |
| Keywords: | public debt, fiscal rules, information treatment, expectations |
| JEL: | E60 D83 H31 H60 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10891&r=eec |
| By: | SÜmeyra AkarÇe&scedilme;; Ane Aranguiz;; Anna Lemmens;; Bea Cantillon; |
| Abstract: | Reaching the three targets of the European Pillar of Social Rights (EPSR) Action Plan is the litmus test for effective EPSR implementation. While the EPSR puts forward a prima facie balance between employment, equal opportunities and social protection, two important questions arise: 1) whether and to what extent the available resources at EU level are sufficiently balanced across the different dimensions of the EPSR and 2) which implications this may have for achieving the 2030 poverty target. Analysing the three domains of the EPSR, its Action Plan and the wider EU legal framework of the principles in the EPSR, the paper argues that abundant EU resources are available for the areas of equality and employment while this is less the case for social inclusion. The empirical evidence on poverty trends over the past decades, however, points to important successes in terms of employment and (gender) equality, but not in terms of social inclusion: a significant increase in employment and defeminization of poverty were accompanied by a marked precarisation of lowskilled men and women. Particularly striking is the rise in the risk of poverty among jobless households linked with the weakening of the poverty-reducing capacity of social protection for this group. Meeting the European social inclusion targets will thus require policies that duly focus on strengthening the framework for social inclusion and social protection. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:wpaper:2311&r=eec |
| By: | Bachmann, Ronald; Gonschor, Myrielle; Milasi, Santo; Mitra, Alessio |
| Abstract: | We examine how technology is associated with self-employment dynamics using worker-level data from 31 European countries. We find that while employees exposed to labour-augmenting technologies are more likely to move from paid-employment to solo self-employment and viceversa, employees exposed to labour-saving technologies are less likely to become self-employed. We identify important differences with respect to workers' socio-demographic characteristics. The results suggest that while labour-augmenting technologies promote workers' mobility and reduce unemployment risks for high-skilled workers, they have the opposite effect for low-skilled workers. Furthermore, labour-saving technologies worsen labour market outcomes particularlyfor low-skilled and routine workers. |
| Abstract: | Unter Verwendung von Daten auf Arbeitnehmerebene aus 31 europäischen Ländern untersuchen wir, wie Technologie mit Arbeitsmarktübergängen in die Selbständigkeit zusammenhängt. Unsere Ergebnisse zeigen, dass Arbeitnehmer, die in ihrer Arbeit mit arbeitsunterstützenden Technologien konfrontiert sind, eher von abhängiger Beschäftigung in die Soloselbstständigkeit wechseln und umgekehrt, während Arbeitnehmer, die mit arbeitssparenden Technologien konfrontiert sind, seltener eine selbstständige Tätigkeit aufnehmen. Wir finden wichtige Unterschiede in den soziodemographischen Merkmalen der Arbeitnehmer. Die Ergebnisse deuten darauf hin, dass arbeitsunterstützende Technologien zwar die Mobilität von Arbeitnehmern fördern und das Arbeitslosigkeitsrisiko von hoch qualifizierten Arbeitnehmern verringern, dass sie aber bei gering qualifizierten Arbeitnehmern den gegenteiligen Effekt haben. Darüber hinaus verschlechtern arbeitssparende Technologien die Arbeitsmarktergebnisse, insbesondere für Geringqualifizierte und Routinearbeiter. |
| Keywords: | Solo self-employment, occupations, tasks, technology, Europe |
| JEL: | J62 J63 J31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:282007&r=eec |
| By: | Florian Dorn; Niklas Potrafke; Marcel Schlepper |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:econpr:_45&r=eec |
| By: | Vahidin Jeleskovic; Steffen Loeber |
| Abstract: | In this paper, we employ spatial econometric methods to analyze panel data from German NUTS 3 regions. Our goal is to gain a deeper understanding of the significance and interdependence of industry clusters in shaping the dynamics of GDP. To achieve a more nuanced spatial differentiation, we introduce indicator matrices for each industry sector which allows for extending the spatial Durbin model to a new version of it. This approach is essential due to both the economic importance of these sectors and the potential issue of omitted variables. Failing to account for industry sectors can lead to omitted variable bias and estimation problems. To assess the effects of the major industry sectors, we incorporate eight distinct branches of industry into our analysis. According to prevailing economic theory, these clusters should have a positive impact on the regions they are associated with. Our findings indeed reveal highly significant impacts, which can be either positive or negative, of specific sectors on local GDP growth. Spatially, we observe that direct and indirect effects can exhibit opposite signs, indicative of heightened competitiveness within and between industry sectors. Therefore, we recommend that industry sectors should be taken into consideration when conducting spatial analysis of GDP. Doing so allows for a more comprehensive understanding of the economic dynamics at play. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.10261&r=eec |
| By: | Attila Havas (Institute of Economics, HUN-REN Centre for Economic and Regional Studies, AIT Austrian Institute of Technology, Center for Innovation Systems and Policy) |
| Abstract: | This paper compares the evolution of CE4 countries’ (Czechia, Hungary, Poland, and Slovakia) national innovation systems, as well as their innovation performance. Its analytical framework draws on evolutionary (and institutional) economics of innovation. Given the structural features and the level of socio-economic development in the CE4 countries, as well as the dominant way of thinking since the cold war, Western politicians, business people, analysts and journalists tend to share a ‘block’ view of these countries. Further, there is a noticeable – and certainly understandable – ‘drive’ also from the academic community to produce findings that can be generalised across the new EU member states, but at least for the CE4 countries, that is, to focus on identifying shared or similar features. Yet a closer look at the structure of the national innovation systems in these countries, as well as at their innovation performance, points to a different direction. While the structural composition of the research sub-systems of the CE4 countries showed a great diversity already in 2000, fairly significant changes have occurred since then almost in all countries, adding more colours to the observed diversity. Neither a similar structural composition of the research sub-system can be observed, nor a move towards a similar structure. Their innovation performance is also diverse. Given the diversity among innovation systems, one should be very careful when trying to draw policy lessons from the ‘rank’ of a country as ‘measured’ by a composite indicator. The CE4 countries, therefore, need to avoid the trap of paying too much attention to simplifying ranking exercises. Instead, it is of utmost importance to conduct detailed, thorough comparative analyses, identifying the reasons for a reasonable or disappointing performance. |
| Keywords: | Keywords: Models of innovation; Economics paradigms; National innovation systems; STI policy rationales; Measurement of innovation; Composite indicators; Scoreboards and league tables; Czechia; Hungary; Poland; Slovakia |
| JEL: | B52 O30 O38 O39 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2338&r=eec |