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on Microeconomic European Issues |
| By: | Eric Knight (Department of Geography and the Environment, University of Oxford) |
| Abstract: | The European Union Emissions Trading Scheme (EU ETS) is the world’s first regional 10 carbon trading market. This article is a quantitative attempt to examine the temporal and spatial geography of European carbon trading. We show that carbon markets are especially sensitive to two factors: staging across time (Phase I versus II of the EU ETS) and across space (energy market structures in Europe). Carbon markets serve as a vehicle to better understand the economic geography of financial markets. Building on the theoretical vocabulary of the geography of finance, the article suggests that certain national factors (market structure) and institutional factors (regulatory phases) better explain how carbon markets operate than company level differences. These findings indicate that geographers have a key role to play in highlighting the local ramifications of carbon markets if and when the world moves towards its ambition for a global carbon market. |
| Keywords: | Climate change, tradable permits, European Union |
| JEL: | Q54 R12 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:0510&r=eur |
| By: | Alexeeva-Talebi, Victoria |
| Abstract: | This paper explores the ability of European refineries to pass-through costs associated with the introduction of the EU Emissions Trading Scheme (EU ETS). We estimated a sequence of vector error correction models (VECM) within a multi-national setting which covers 14 EU member states. Using weekly data at the country level, this paper finds a significant influence of prices for European Union Allowances (EUAs) on unleaded petrol retail prices during the trial phase of the EU ETS from 2005 to 2007. Petrol prices are found to be elastic with respect to crude oil prices and exchange rates but rather inelastic with respect to carbon costs. The long-run elasticity of petrol prices with respect to the EUA prices typically ranges between 0.01% and 0.09%. Furthermore, by computing the variance decomposition our analysis shows that a significant fraction of petrol price changes in Austria, Germany, France and Spain can be explained by changes in allowances prices (between 10% and 20%). -- |
| Keywords: | Cost Pass-Through,Emissions Trading Scheme,Refineries |
| JEL: | F18 C22 L11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10086&r=eur |
| By: | Tomaso Duso (Humboldt University Berlin and WZB); Klaus Guglery (Vienna University of Economics and Business); Florian Szücs (University of Vienna) |
| Abstract: | Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2007, we evaluate the economic impact of the change in European merger legislation in 2004. We first propose a general framework to assess merger policy effectiveness, which is based on standard oligopoly theory and makes use of stockmarket reactions as an external assessment of the merger and the merger control decision. We then focus on four different dimensions of effectiveness: 1) legal certainty; 2) frequency and determinants of type I and type II errors; 3) rent-reversion achieved by different merger policy tools; and 4) deterrence of anti- competitive mergers. To infer the economic impact of the merger policy reform, we compare the results of our four tests before and after its introduction. Our results suggest that the policy reform seems to have been only a modest improvement of European merger policy. |
| Keywords: | merger control, regulatory reform, EU Commission, event-study |
| JEL: | L4 K21 C13 D78 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:337&r=eur |
| By: | Geert Bekaert; Campbell R. Harvey; Christian T. Lundblad; Stephan Siegel |
| Abstract: | At a time of historic challenges to the viability of the Eurozone, we assess the contribution of the EU and the Euro to equity market integration in Europe. We use a simple and essentially model free measure of bilateral market segmentation: two countries are segmented if there is a wide divergence in the valuations of their industries. We first establish that segmentation is significantly lower for EU versus non- EU members. Bilateral valuation differentials remain lower for EU members even after we control for several possible channels of integration, such as bilateral trade, direct investment positions, financial regulation, and interest rate differences. Importantly, we find that EU membership reduces equity market segmentation between member countries whether or not members have also adopted the Euro. The Euro adoption as well as the anticipation of the Euro adoption has minimal effects on market integration. |
| JEL: | F30 F31 F33 G15 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16583&r=eur |
| By: | Emanuela Marrocu; Raffaele Paci; Stefano Usai |
| Abstract: | The recent history of the European Union is characterized by a dual picture showing the Old and the New countries in sharp contrast with respect to several economic dimensions. In particular, regions and industries in Eastern countries have shown an excellent performance whilst Western countries have kept moving on a rather slow track. Our aim is to assess the intertwined performance of regions and industries in New and Old economies within Europe by investigating the dynamics of total factor productivity over the period 1996-2007 and the role played by local externalities in the agglomeration process of economic activities. Among the determinants of local industry growth we analyse the agglomeration externalities and, in particular, we focus on the different impact of the specialisation and diversity externalities. Moreover, we analyse the potential influence of regional intangible assets such as human and technological capital while controlling for other territorial features which may affect the efficiency of the local industry. The empirical analysis makes use of spatial econometric techniques to take into account the possibility of cross-border externalities. |
| Keywords: | Agglomeration externalities; Local industry growth; Total Factor Productivity; Spatial models; European regional cohesion |
| JEL: | C31 O47 R31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201024&r=eur |
| By: | Jahn, Elke J. (IAB, Nürnberg); Bentzen, Jan (Aarhus School of Business) |
| Abstract: | Temporary agency employment has grown steadily in most European countries over the past three decades as part of the general trend towards increased employment flexibility. Yet to this day, it remains an open question what drives the demand for temporary agency workers. The paper examines, first, whether the deregulation of temporary agency employment is responsible for the growth of the flexible staffing industry. Second, we investigate the cyclical behavior of temporary agency employment. Using monthly data for Germany covering the period 1973-2008, we show that the continuous liberalization of this sector is not responsible for the surge in temporary agency employment. Our analysis reveals, moreover, that temporary agency employment exhibits strong cyclical behavior and correlates with main economic indicators in real time. Since most European countries promoted the use of temporary agency employment in a similar way, we believe that our results may be interesting from an international perspective as well. |
| Keywords: | business cycle, labor law, temporary agency employment, regulation |
| JEL: | C41 J23 J40 J48 K31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5333&r=eur |
| By: | Francesco D’Amuri (Bank of Italy and ISER, University of Essex); Giovanni Peri (University of California, Davis, NBER and Centro Studi Luca d’Agliano) |
| Abstract: | In this paper we analyze the effect of immigrants on natives’ job specialization in Western Europe. We test whether the inflow of immigrants changes employment rates or the chosen occupation of natives with similar education and age. We find no evidence of the first and strong evidence of the second: immigrants take more manual-routine type of occupations and push natives towards more abstract complex jobs, for a given set of observable skills. We also find some evidence that this oc-cupation reallocation is larger in countries with more flexible labor laws. As abstract-complex tasks pay a premium over manual-routine ones, we can evaluate the positive effect of such reallocation on the wages of native workers. Accounting for the total change in Complex/Non Complex task supply from natives and immigrants we find that immigration does not change much the relative compen-sation of the two types of tasks but it promotes the specialization of natives into the first type. |
| Keywords: | immigration, task specialization, European labor markets |
| JEL: | J24 J31 J61 |
| Date: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:302&r=eur |
| By: | Veith, Tobias |
| Abstract: | States and their representatives, national governments, play a key role in national telecommunication markets. As lawmakers, they determine the playing field of the agents in the markets and the decision powers of national regulators. Simultaneously, they are involved in appointing presidential chambers of national regulators. On the other hand, governments keep shares in regulated companies and support single infrastructure projects based on financial and legal state aid measures. Therefore, European Union regulatory frameworks require a strict separation of tasks between national ministries. However, the European Commission has repeatedly criticized member states for in-transparency and insufficient separations of tasks in national implementation. While the Second Regulatory Package balanced competition and investment aims, the new Regulatory Package implemented in December 2009 dedicates a higher weight to the role of infrastructure quality as a driver of service innovations. Moreover, national regulators become more independent, and former national regulation tasks are partially shifted to the pan-European level. In consequence, the role of governments also changes. I discuss the transposition process of Regulatory Packages to national laws and how they have been implemented on the national level to learn more about how the new Regulatory Package will affect the national situation and the European integration process. -- |
| Keywords: | telecommunication infrastructure,local loop competition,regulatory independence |
| JEL: | K23 L13 L43 L96 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10089&r=eur |
| By: | European Commission |
| Abstract: | The European Commission services published a staff working document assessing the Financial Transactions Tax (FTT) and the Financial Activities Tax (FAT). |
| Keywords: | European Union; taxation; financial transaction tax; financial activities tax; financial institutions |
| JEL: | G20 H21 H22 H23 H25 H27 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0025&r=eur |
| By: | Peter Muehlau (Department of Sociology, Trinity College Dublin and Institute for International Integration Studies, Trinity College Dublin); |
| Abstract: | In this paper, I examine whether and to which degree quality of work and employment differ between men and women and how these gender differences are shaped by societal beliefs about ‘gender equality.’ Using data from the 2004 wave of the European Social Survey, I compare the jobs of men and women across a variety of measures of perceived job quality in 26 countries. Key findings are that job quality is gendered: Jobs of men are typically characterized by high training requirements, good promotion opportunities and high levels of job complexity, autonomy and participation. Jobs for women, in contrast, are less likely to pose a health or safety risk or to involve work during antisocial hours. However, contrary to expectation, the job profiles of men and women are not more similar in societies with gender egalitarian norms. While women are relatively more likely to be exposed to health and safety risks, work pressure and demands to work outside regular working time, in more gender-egalitarian societies their work is not, relative to men’s, more skilled, complex or autonomous. Neither do more egalitarian societies provide more opportunities for participation and advancement for women than less egalitarian societies. |
| JEL: | N A |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp345&r=eur |
| By: | Achtnicht, Martin |
| Abstract: | Residential buildings strongly contribute to global CO2 emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained WTP measures for CO2 savings. -- |
| Keywords: | Choice experiment,CO2 emissions,Energy efficiency,Energy saving,Mixed logit,Residential buildings,Willingness to pay |
| JEL: | C25 D12 Q40 Q51 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10094&r=eur |
| By: | San Juan Mesonada, Carlos |
| Abstract: | This working paper presents a cost-benefit analysis of the reform of the Common Aqricultural policy (CAP) considering both its effects on farmers in the European Community (EC) and on farmers in third countries. The new questions raised by the Uruguay round of the GATT (General Aqreement on Tariffs and Tax) and the start up of the sinqle Market in Europe are considered in order to examine the possible effects on agricultural income with special reference to family farms in the south of Europe. In the case of Spain, data are presented for possible effects of restructuring work occasioned by the reform. |
| Keywords: | CAP; EC; GATT; cost-benefit; agricultural economics; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/2824&r=eur |
| By: | Veith, Tobias |
| Abstract: | This paper considers the impact of European telecom regulation on the value of affected companies. Employing a repeating ARGARCH model, I compare the effect of three types of regulation which are categorized based on the addressed subject, i.e. cross-market, country-specific and company-specific regulation. While standard event study approaches are a special case of ARGARCH models, the approximation process chosen in this paper shows a better estimation of the stock price development based on autoregressive models and, thus, more robust estimation results for the reaction to a regulatory change. Turning to the economic results, I find positive reactions to crossmarket and country-specific regulation and negative reactions to regulation which directly addresses individual firms. The impact on volatility supports the findings of the returns analysis. These findings show that European Commission interventions are competition enhancing and support the expected performance of the affected companies in the telecommunications sector. However, while country-addressing interventions and company-addressing interventions follow similar aims, country-addressing interventions cause more uncertainty to a market because of the national process of governments' adjustments. Thus, the estimation results provide evidence that companies prefer direct European regulation over the implementation by national governments, independent of providers' incumbency. -- |
| Keywords: | regulation,telecommunications,company value |
| JEL: | L51 L52 L86 L96 O31 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10088&r=eur |
| By: | Casula Vifell, Åsa (Department of Political Science, Stockholm University); Sjögren, Ebba (Dept. of Business Administration, Stockholm School of Economics) |
| Abstract: | Various evaluations of the internal market suggest that member states’ implementation continues to lag behind in several areas. In addition to the European Court of Justice, the European Commission also has means for pursuing compliance without judicial recourse. Since 2002, the Commission coordinates the SOLVIT-network: national authorities with the mandate to resolve problems related to misapplications of internal market directives by informal means. Using the case of Sweden, we investigate the techniques used by SOLVIT and what impact these have on the administrative system of an individual member state. Drawing on a governmentality perspective, we find that SOLVIT Sweden contributes to juridification of the work methods through which the internal market is realized. The governmentality approach also highlights the policy-making capacity of ex post control. Specifically, the visibility provided by the national SOLVIT-centers work suggests a role as watchdogs for the Commission’s enforcement of the internal market. |
| Keywords: | European Union; governmentality; internal market; SOLVIT; supervision; Sweden |
| Date: | 2010–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:hastba:2010_007&r=eur |
| By: | Mario Savino |
| Abstract: | The aim of this paper is to explore the most problematic aspects of information access legal regimes and to provide some guidelines to policy makers, including legislators, governments and public administrators. The analysis is based on the comparison of Freedom of Information Acts (FOIAs) and their administrative/judicial enforcement in 14 EU member states and the EU institutions. |
| Date: | 2010–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaac:46-en&r=eur |
| By: | Bentolila, Samuel (CEMFI, Madrid); Cahuc, Pierre (Ecole Polytechnique, Paris); Dolado, Juan José (Universidad Carlos III de Madrid); Le Barbanchon, Thomas (Ecole Polytechnique, Paris) |
| Abstract: | This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We assess what part of this differential is due to the larger gap between the dismissal costs of permanent and temporary contracts and the less restrictive rules regarding the use of the latter contracts in Spain. Using a calibrated search and matching model, we estimate that about 45% of the surge in Spanish unemployment could have been avoided had Spain adopted French employment protection legislation before the crisis started. |
| Keywords: | temporary contracts, unemployment, Great Recession |
| JEL: | H29 J23 J38 J41 J64 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5340&r=eur |
| By: | Hans-Martin Niemeier |
| Abstract: | The heated debate on the regulatory framework for airports has highlighted the importance of creating good institutions for air transport in general. This paper defines the concept of effective regulatory institutions for air transport. It also describes the value chain for air transport and how the state intervenes with what type of regulatory institution. The paper concludes by highlighting the institutional reforms necessary to make regulation effective. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2010/20-en&r=eur |
| By: | David E. Bloom (Harvard School of Public Health); Alfonso Sousa-Poza (University of Hohenheim) |
| Abstract: | This special issue of the European Journal of Population focuses on possible economic consequences of low fertility in Europe. This introduction reviews the history of falling fertility in Europe and the literature that explores its causes, its potential implications, and possible policy responses. It also summarizes the evolution of thinking about the relationship between population growth and economic development, with attention to recent work on the mechanisms through which fertility decline can spur economic growth if the necessary supporting conditions are met. The introduction also identifies some of the challenges of population aging that are associated with low fertility and suggests that there may be less reason for alarm than has been suggested by some observers. The papers that appear in this special issue are also summarized. |
| Keywords: | Economic consequences, low fertility, Europe |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:5410&r=eur |
| By: | Bentzen, Jan (Department of Economics, Aarhus School of Business); Smith, Valdemar (Department of Economics, Aarhus School of Business) |
| Abstract: | Empirical evidence gives strong support to a close association between liver cirrhosis mortality and the intake of alcohol and most often a log-linear relationship is assumed in the econometric modeling. The present analysis investigates for unit roots in a panel data set for sixteen European countries – covering the period 1970-2006 - where both alcohol consumption and liver cirrhosis seem best described as trend-stationary variables. Therefore a fixed effects model including individual trends is applied in the analysis but also a more flexible non-linear functional form with fewer restrictions on the relationship between liver cirrhosis mortality and alcohol consumption is included. The conclusion is that the total level of alcohol consumption as well as the specific beverages – beer, wine and spirits – contributes to liver cirrhosis mortality, but the present study also reveals that directly addressing the question of panel unit roots and in this case subsequently applying a trend-stationary modeling methodology reduces the estimates of the impacts from alcohol consumption to liver cirrhosis. Finally, more restrictive alcohol policies seem to have positively influenced the country-specific development in cirrhosis mortality. |
| Keywords: | Alcohol consumption; Liver cirrhosis mortality; Trend-stationary panel data; Non-linear modelling |
| JEL: | I10 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_009&r=eur |
| By: | Ådne Cappelen, Erik Fjærli, Frank Foyn, Torbjørn Hægeland, Jarle Møen, Arvid Raknerud and Marina Rybalka (Statistics Norway) |
| Abstract: | We find that the Norwegian R&D tax credit scheme introduced in 2002 mainly works as intended. The scheme is cost-effective and it is used by a large number of firms. It stimulates these firms to invest more in R&D, and, in particular, the effect is positive for small firms with little R&D experience. The returns on the R&D investments supported by the scheme are positive and generally not different from the returns to other R&D investments. We have found examples of what can be interpreted as tax motivated adjustments to the scheme, but to some extent this must be accepted as a cost to subsidy and support schemes intended for use by a large number of economic agents. This is particularly so when attempts are made to keep administrative expenditures and control routines at a low level. |
| Keywords: | R&D tax credit; R&D subsidies; Innovation policy; Norway |
| JEL: | H25 O38 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:640&r=eur |