Capital Endowments Research Articles

Making the Eurozone work: a risk-sharing reform of the European Stability Mechanism

This work presents an original proposal for the reform of the Eurozone architecture according to an approach based on risk sharing (aiming to reach in the long-term the mutualization of public debt). The proposal envisages a new role for the European Stability Mechanism (ESM) which should gradually become the guarantor of the public debts of the European Economic and Monetary Union (EMU). In this way, the new ESM would support the full transition from national debts to a single Eurozone public debt (e.g. Eurobonds) with a single yield curve for all countries. Our proposal would benefit both core and peripheral EMU countries. Indeed, the riskiest countries, which would gain from the ESM conditional debt guarantee, should give up the possibility of redenominating their national debt and would pay to the ESM the corresponding market price of the guarantee. This would strengthen the capital endowment of the ESM and also allow it to use its leverage capability to support the realignment of the economic cycles of the different countries through profitable public investment plans concentrated in the weakest regions of the EMU. Such plans would be coordinated and implemented by the European Union. After a transition period, our Insurance Fund proposal would contribute to a much more resilient monetary union, with a European fiscal policy and mutualized debt. Admittedly this proposal presupposes a political consensus at the EU level to reinterpret the no bailout rule enshrined in the treaties so that risk sharing institutions implemented with fairly priced insurance scheme can be allowed. New risk sharing institutions will foster a common vision of belonging to the same federal, political union in the making, the only one compatible with the abdication of fiscal sovereignty by national governments.

Many Roads Lead to Rome: How Human, Social, and Financial Capital Are Related to New Venture Survival

Given variance in entrepreneurs’ capital endowments, the question of sufficient (or insufficient) starting conditions enabling a pathway to survival is critical in entrepreneurship. Drawing on the subjectivist theory of entrepreneurship (STE), we adopt a configurational approach. Our results show how combinations of human and social capital are related to survival while overreliance on financial capital is not. From a subjectivist perspective, we reveal a potential gap between identifying and exploiting an opportunity. The findings provide some novel insights that help reframe conflicting results as to whether capital endowments are substitutes or complements.

Many Roads Lead to Rome: How Human, Social, and Financial Capital Are Related to New Venture Survival:

Given variance in entrepreneurs’ capital endowments, the question of sufficient (or insufficient) starting conditions enabling a pathway to survival is critical in entrepreneurship. Drawing on the ...

Transboundary pollution, tax competition and the efficiency of uncoordinated environmental regulation

AbstractUnder capital tax competition, surprisingly, Ogawa and Wildasin (2009) find that uncoordinated policymaking leads to a first‐best outcome even in the presence of transboundary pollution. However, I show that if the level of environmental regulation is endogenized, the regulation level becomes too loose compared with the optimum (“race to the bottom”). Thus, despite the efficiency result of Ogawa and Wildasin (2009), efforts to achieve international environmental policy coordination are needed. I then examine the dependence of this result on the level of decisive voter's capital endowment. The regulation is inefficiently loose in many cases, but it can be too strict if the decisive voter's capital endowment is above the average. Thus, the possibility of “race to the top” cannot be eliminated. The inefficiency result does not generally depend on the timing of policymaking, although the efficiency may be restored in the limit case where the decisive voter has no capital at all.

Diversificación productiva y cambio estructural en economías cerradas y abiertas

Productive diversification has been the main determinant of structural change of the economies. This hypothesis is analysed for nine countries under a relatively closed trade regime, and for nine Latin American countries under a relatively open trade regime with the United States. The equations of structural change that are tested are derived from a multisector dynamic general equilibrium model. The negative impact of productive diversification on the relative allocation of resources to the primary sector cannot be rejected for closed economies: greater diversification increases the relative productivity of manufacturing activities. The impact of a country’s comparative advantages on the allocation of resources to agriculture cannot be rejected: the relative agricultural productivity has a positive impact; the relative capital endowment has a negative impact; and the real exchange rate has a positive impact. In the last case, it is argued that low diversification induces a deterioration in the terms of trade, which favours specialization in primary activities.

Asymmetric Information and the Discount on Foreign-Acquired Degrees in Canada

Abstract A growing wage gap between immigrant and native-born workers is well documented and is a fundamental policy issue in Canada. It is quite possible that wage differences, commonly attributed to the lower quality of foreign credentials or the deficiency in the accreditation of these credentials, merely reflect lower wage offers that immigrant workers receive due to risk aversion among local firms facing an elevated degree of asymmetric information. Using the 2006 and 2011 population censuses, this paper empirically investigates the effects of wage bargaining in labor markets on the wage gap between foreign- and Canadian-educated workers. Our results imply that a significant part of the wage gap between foreign-educated and Canadian-educated immigrant (and native-born) workers is not driven by the employers’ risk aversion but by differences in human capital endowments and occupational matching quality.

The Effectiveness of Women's Skills Development to Household Poverty Reduction: The Case of Msinga Rural Areas

Skills development is considered an essential strategy to empower rural women to escape poverty. This study identifies the critical skills necessary for rural women to reduce household poverty based on a sample of 300 rural households in Msinga Municipality of KwaZulu‐Natal, South Africa. This study relates the household’s consumption expenditure per adult equivalent (i.e., from both own production and purchases) to poverty lines of $2.00 and $1.25 per day, which were used to classify households according to their poverty status. The ordered logit model was used to investigate the farm and off‐farm skills, among other factors, that are critical for poverty reduction among sampled women’s households. It was found that business management, crop and mushroom production skills, and other capital endowments, including social capital and access to infrastructure skills, were critical for poverty alleviation but were incapable of taking such households out of poverty. Likewise, having an older primary female head of household earning more income from social grants and having more husband’s income lead to poverty alleviation but do not move households out of poverty. It was concluded that an enabling economic environment is required for most skills‐training programs to be effective in taking households out of poverty.

Rural Households' Poverty and Relocation and Settlement: Evidence from Western China.

Based on survey data collected from five counties across southern Shaanxi, China, the present study employs a multinomial logistic model to explore the main factors related to the type of poverty of rural households, particularly focusing on the role of relocation time, reason for relocation, and type of relocation. The results showed that three types of poverty, “voluntary poverty”, “transient poverty”, and “chronic poverty”, are distinguished by combining income and consumption criteria. Moreover, relocation and settlement programs contribute to a certain degree to these three kinds of poverty, and the effects vary according to the relocation characteristics. Specifically, those relocated long-term were more likely to be trapped in “voluntary poverty” and “chronic poverty”, whereas those relocated short-term were less likely to fall into “voluntary poverty” and “transient poverty”. The poverty alleviation and disaster-related resettlers were less likely to be trapped in “chronic poverty”, whereas centralized resettlers were less likely to be trapped in “voluntary poverty” and “chronic poverty”. Additionally, demographic characteristics, capital endowment variables, and geographical features are all important factors affecting rural households’ type of poverty. This study can serve as a reference for further resettlement practice in China and other developing countries.

Intangible assets and SMEs’ export behavior: a meta-analytical perspective

Thanks to their dominant role in fostering socioeconomic prosperity, exporting small- and medium-sized enterprises (SMEs) are perceived to be a major societal asset. Coming out of the great financial crisis, initiatives to nurture their (export) competitiveness have been high on the political agenda. In this vein, a growing literature explores the pertinence of firm-specific factors for explaining differences in SMEs’ export behavior. However, the puzzle of how intangible, knowledge-based assets, such as human and relational capital, contribute to establishing a viable position in export markets remains. By synthesizing empirical evidence from 167 studies, this meta-analytic path analysis reveals significant differential direct and indirect effects of human and relational capital endowment on dimensions of export behavior. Concurrently, our analysis uncovered that positive influences of intangible assets are context-dependent. In fact, human resources appear to be particularly pertinent for exporting SMEs in developing economies.

Human Capital Differentials Across Urban and Rural Areas in Italy. The Role of Migrations

Differences in human capital endowment between the standard partition of Italy (North–South) are pronounced. The divide between urban and rural areas is even more remarkable, with the former showing also faster accumulation rate. Using data from civil registries and survey on graduates, we show that mobility plays a crucial role in explaining this accumulation gap. Urban areas of the North drain human capital from rural and urban locations of the South, but they lose graduates in favor of foreign countries. Urban movers are positively selected according to familiar background and secondary school grades. Moreover, in comparison to stayers, they are more likely to hold a university degree associated with better labour market prospects. Migrations of graduates are responsive to labour market conditions, to university supply, to house prices and—most importantly—to local human capital endowment.

Economic resources versus the efficiency of different types of agricultural production in regions of the European union

Facing enormous differences in factor endowments across European agriculture the aim of the study was to identify the significance of differences in land, capital and labour endowments on the efficiency of different agricultural production types in the EU. The Ward Cluster Analysis was used to distinguish groups of EU regions, significantly differing in factor endowment, DEA model to determine the relative differences in technical efficiency of different types of agricultural production in EU regions and ANOVA analysis to assess the significance of differences in the efficiency of agricultural production types between these EU regions. It was found that generally the agriculture of the EU-12 regions was characterised in 2015 by higher efficiency of transforming inputs into effects than households in the EU-15 regions. Therefore, factor endowments play a significant role in transformation of production factors into effects. The article shows that there is a diversity of factor endowments in agriculture between EU region groups, which translates into differences in the technical efficiency of agricultural holdings of various types of production.

Election Timings under Globalization: A Tax Competition Approach

This paper examines how the results of elections in a country are affected by their relative timing. Particularly, I focus on the types of policymakers in terms of capital endowment for the framework of strategic delegation under tax competition. The game is composed of three stages: i) an election is held in the first-mover country and a policymaker is chosen by majority voting; ii) similarly, an election to choose a policymaker is held in the second-mover country; and iii) capital tax rates are simultaneously determined by the policymakers of both countries. As a result, it is indicated that the policymaker elected through voting by citizens in the first-mover country is likely to be less capital-rich, or relatively more left-winged, compared to that in the second-mover country. However, when income disparity within country is sufficiently large, the second-mover country becomes more redistributive.

Talking about regional resilience: evidence from two formerly rural Spanish regions

ABSTRACTThis research analyses the contrasting socio-economic performances of two neighbouring territories, which, while sharing similar starting points, have, for various reasons, diverged in terms of their dynamics and ultimately reached different economic resilience levels. Regional production structure, socio-economic assets, social capital endowment and leadership strength, together with institutional and governance quality are factors that may underlie their current differences. The results of the research confirm the hypothesis that these factors are indeed the key to their different resilience levels.

Human capital and exports: A micro-level analysis of transition countries

ABSTRACTThis paper investigates the impact of human capital endowments on export intensity employing firm-level data for 29 transition economies. A particular focus is placed on comparing and contrasting Central and Eastern Europe countries (CEECs) with those from the former Soviet Union, the Commonwealth of Independent States (CIS). The impact of the share of employees with higher education, provision of on-the-job training, years of experience of the top manager and labour cost on export intensity is assessed. To test these relationships, Tobit and Fractional Logit approaches are adopted. The estimation results suggest that, overall, having a more educated workforce exerts a positive impact on the export intensity of firms in transition economies, the magnitude being larger for CEECs. Average labour cost, as an alternative measure, also turns out to exert a positive but stronger impact. Insufficient evidence is found of a role for training programmes and years of experience of the top manager.

Kontroversi Mazhab tentang Wakaf uang dan Implikasinya terhadap Undang-Undang Nomor 41 Tahun 2004 tentang Wakaf

Endowments money were not only provides a new alternative for Muslims in Indonesia in berwakaf. But also serves to provide a solution for improving the welfare of the wider community. The introduction of cash waqf in the lives of Muslims in Indonesia have shifted he old paradigm. Besides the introduction of this money back waqf has also provided ample opportunity for Muslims from all walks of life to participate ful􏰁ill waqf money though not in large numbers. The conclusions are the First, endowments developed in accordance with the development of society itself or can be said to be associated with social change. Second, the Act perwakafan in Indonesia combines different school a second opinion about the object waqf that includes movable and immovable. Among the moves bendak including cash and precious metals. Third, endowments money can be used as motivation berwakaf for Muslims, various facilities offered in cash waqf, Muslims will more easily give their contribution to the capital endowments without having to wait in a very large number.

A long-term analysis of the common agricultural policy financial subsidies towards Italian farms

In Italy since 2000 there has been a significant decrease of farms and a notable increase of the usable agricultural areas. In order to reduce the socioeconomic marginalization in rural territories the European Union has supported financially the rural development in a pattern of pluriactivity and productive diversification in farms. The core purpose of this research was to assess by a multiple regression model the impact of financial subsidies allocated by the Common Agricultural Policy on the farmer net income since 2004 to 2016 in Italian farms belonging to the Farm Accountancy Data Network. Findings have pointed out a direct impact of financial supports disbursed by the European Union; by contrast, no impacts have had payments disbursed by the second pillar. Drawing the conclusions, it is fundamental to increase the financial supports of the Common Agricultural Policy aimed at implementing the land capital endowment which is the one of the main bottlenecks in Italian farms.

Employment trajectories in heterogeneous regions: Evidence from Germany.

To what extent do regional characteristics influence employment trajectories? Do regional factors diversely affect the employment careers of different sociodemographic groups? By investigating these questions, we extend current life course research in two ways: First, from a conceptual perspective, we use approaches from regional economics in addition to established sociological labour market theories to gain insights into the effects of regional determinants on individual labour market outcomes. Second, from a methodological point of view, we conduct event history analyses based on a German dataset that contains information on individuals, firms and regions. Our results show that there are considerable regional heterogeneities regarding population density and the amount of human capital endowment, both of which influence working careers differently. Regional agglomeration predominantly offers opportunities in terms of employment trajectories, while regional human capital accumulation increases employment risks. Additionally, our findings indicate that group-specific inequalities with respect to employment careers can be weakened or even strengthened by regional frame conditions. Female and foreign employees benefit most from denser regions and from a higher human capital endowment. By contrast, the unemployment risks of workers who previously experienced unemployment periods during their working lives are increased by both of these regional characteristics. Findings regarding education level are mixed: Workers with occupational qualifications profit from regional agglomeration to a greater extent than do low or even generally qualified workers. However, a high local human capital endowment leads to skill segregation between vocationally trained and highly qualified employees.

Productivity Growth, Human Capital and Technology Spillovers: Nonparametric Evidence for EU Regions

AbstractThis paper assesses the strength of productivity spillovers nonparametrically in a data set of 12 industries and 231 NUTS2 regions in 17 European Union member countries between 1992 and 2006. It devotes particular attention to measuring the catching up through spillovers depending on the technology gap of a unit to the industry leader and the local human capital endowment. We find evidence of a nonlinear relationship between the technology gap to the leader as well as human capital and growth in logs. Spillovers are smallest for units with a medium‐high technology gap to the leader, especially for regions where human capital endowments are low.

The Geography of Territorial Capital in the European Union: a Map and Several Policy Issues

This paper investigates the territorial capital endowments across European regions. Data are collected at NUTS 2 level for all European regions, for the most recent year available, for several indicators that measure different components of territorial capital. Our evidence reveals several patterns of regional economic development, with specific configurations of the territorial assets, which further shed light on the connection between location, competitiveness and development.

INTRA-INDUSTRY TRADE BETWEEN INDIA AND INDONESIA

This paper analyzes the determinants of India’s Intra-Industry Trade (IIT) with itstrading partner, Indonesia, from 1995 to 2017. We estimate India’s IIT with Indonesiausing bilateral commodity trade data at the two-digit Broad Economic Categoriesclassification code level. Our estimates of IIT demonstrate that India’s trade withIndonesia is indeed intra-industry in nature. However, no remarkable improvementsin the intensity of IIT is found. We also examine the determinants of IIT by estimatinga standard IIT equation using an autoregressive distributed lag model. Our empiricalfindings reveal that trade imbalances, disparity in the demand structure, and thehuman capital endowments among the countries reduce bilateral IIT and that foreigndirect investment and trade openness play an important role in enhancing it. This studytherefore suggests relevant policy interventions to facilitate fair trade by reducingbarriers.