J.E. Boscá, R. Doménech, J. Ferri, J.R. García and C. Ulloa
This paper aims to analyse the stabilizing macroeconomic effects of economic policies during the COVID-19 crisis in Spain.
Abstract
Purpose
This paper aims to analyse the stabilizing macroeconomic effects of economic policies during the COVID-19 crisis in Spain.
Design/methodology/approach
The contribution of the structural shocks that explain the behaviour of the main macroeconomic aggregates during 2020 are estimated, and the effects of economic policies are simulated using a dynamic stochastic general equilibrium (DSGE) model estimated for the Spanish economy.
Findings
The results highlight the importance of supply and demand shocks in explaining the COVID-19 crisis. The annual fall in gross domestic product (GDP) moderates at least by 7.6 points in the most intense period of the crisis, thanks to these stabilizing policies. Finally, the potential effects of Next Generation EU in the Spanish economy are estimated. Assuming that Spain may receive from the EU between 1.5 and 2.25 percentage points (pp) of GDP, activity could increase to between 2 and 3 pp in 2024.
Originality/value
To the best of the authors’ knowledge, the exercises and findings are original. All these results show the usefulness of a DSGE model, such as the estimated rational expectation model for Spain, as a practical tool for the applied economic analysis, the macroeconomic assessment of economic policies and the understanding of the Spanish economy.
“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise…
Abstract
“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise, the objective of competitiveness can exacerbate regional and social inequalities, by targeting efforts on zones of excellence where projects achieve greater returns (dynamic major cities, higher levels of general education, the most advanced projects, infrastructures with the heaviest traffic, and so on). If cohesion policy and the Lisbon Strategy come into conflict, it must be borne in mind that the former, for the moment, is founded on a rather more solid legal foundation than the latter” European Commission (2005, p. 9)Adaptation of Cohesion Policy to the Enlarged Europe and the Lisbon and Gothenburg Objectives.
Jose-Luis Hervas-Oliver, Fiorenza Belussi, Silvia Rita Sedita, Annalisa Caloffi and Gregorio Gonzalez-Alcaide
For the specific topic of multinationals in clusters, both regional strands and international business and management literatures address the topic from different yet intertwined…
Abstract
Purpose
For the specific topic of multinationals in clusters, both regional strands and international business and management literatures address the topic from different yet intertwined perspectives. This study aims to facilitate the integration of the conversations and the distinct literatures to produce a clear understanding and conceptualization of the existent knowledge on the topic, with the aim to foster an integration of those different lines of inquiry on the topic that can advance scholarly research and improve policymaking.
Design/methodology/approach
Mixing a robust and longitudinal bibliometric analysis (1992-2018) and a qualitative critical review, the study disentangles sub-conversations on the topic in each literature.
Findings
The study encounters commonalities that foster cross-fertilization and blind spots that prevent integration of findings from each literature.
Research limitations/implications
Both literatures need to cross-fertilize and integrate each other’s knowledge.
Originality/value
To the best of the authors’ knowledge, this study is the first to integrate literatures using bibliometrics, mapping the existing knowledge on two key areas of competitiveness: clusters and multinationals.
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Fernando Pinto and Raquel Sebastian
This study examines the effects of firm-level collective bargaining agreements (CBAs) on workers’ welfare within Spanish firms, focusing on the trade-off between wage inequality…
Abstract
This study examines the effects of firm-level collective bargaining agreements (CBAs) on workers’ welfare within Spanish firms, focusing on the trade-off between wage inequality and mean wage levels within firms. Results indicate that while firm-level CBAs contribute to increased intra-firm wage inequality, they also significantly enhance intra-firm average wage levels, with these positive effects being consistently observed across firm types and employee skill levels. Most notably, the increase in mean wages tends to offset the adverse effects associated with wage disparities, thereby leading to an overall improvement in workers’ welfare within firms. These findings provide crucial policy implications, advocating for tailored approaches in supporting effective collective bargaining practices that can foster equitable wage growth and enhance workers’ welfare, particularly in smaller firms and those employing low-skilled workers. Our results underscore the importance of firm-level negotiations in shaping equitable and prosperous labour market outcomes in contemporary economic settings.
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This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to…
Abstract
This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.
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Javier Andrés, José E. Boscá, Rafael Doménech and Javier Ferri
The purpose of this paper is to asses the welfare and macroeconomic implications of three distinct degrowth strategies designed to reduce carbon emissions: penalizing fossil fuel…
Abstract
Purpose
The purpose of this paper is to asses the welfare and macroeconomic implications of three distinct degrowth strategies designed to reduce carbon emissions: penalizing fossil fuel demand, substituting aggregate consumption with leisure and disincentivizing total factor productivity (TFP) growth.
Design/methodology/approach
Using an environmental dynamic general equilibrium (eDGE) model that incorporates both green renewable technologies and fossil fuels in the production process, this study sets an emissions reduction target aligned with the goals of the Paris Agreement by 2050.
Findings
The results reveal that the conventional degrowth strategy, wherein a reduction in the consumption of goods and services is compensated with an increase in leisure, may entail significant economic consequences, leading to a notable decline in welfare. In particular, a degrowth scenario resulting from a decline in TFP yields the most pronounced reduction in welfare. Conversely, inducing a reduction in fossil fuel demand by fiscally inflating the price of the imported commodity, despite potential social backlash, exhibits noticeably less detrimental welfare effects compared to other degrowth policies. Furthermore, under this degrowth strategy, the findings suggest that a globally coordinated strategy could result in long-term welfare gain.
Originality/value
To the best of the authors’ knowledge, this is the first contribution that uses an eDGE model to evaluate the welfare implications of an additional degrowth strategy amidst the ongoing inertial reduction of carbon emissions.
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Petra Sauer, Narasimha D. Rao and Shonali Pachauri
In large parts of the world, income inequality has been rising in recent decades. Other regions have experienced declining trends in income inequality. This raises the question of…
Abstract
In large parts of the world, income inequality has been rising in recent decades. Other regions have experienced declining trends in income inequality. This raises the question of which mechanisms underlie contrasting observed trends in income inequality around the globe. To address this research question in an empirical analysis at the aggregate level, we examine a global sample of 73 countries between 1981 and 2010, studying a broad set of drivers to investigate their interaction and influence on income inequality. Within this broad approach, we are interested in the heterogeneity of income inequality determinants across world regions and along the income distribution. Our findings indicate the existence of a small set of systematic drivers across the global sample of countries. Declining labour income shares and increasing imports from high-income countries significantly contribute to increasing income inequality, while taxation and imports from low-income countries exert countervailing effects. Our study reveals the region-specific impacts of technological change, financial globalisation, domestic financial deepening and public social spending. Most importantly, we do not find systematic evidence of education’s equalising effect across high- and low-income countries. Our results are largely robust to changing the underlying sources of income Ginis, but looking at different segments of income distribution reveals heterogeneous effects.
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Badi H. Baltagi, Georges Bresson and Jean-Michel Etienne
This chapter proposes semiparametric estimation of the relationship between growth rate of GDP per capita, growth rates of physical and human capital, labor as well as other…
Abstract
This chapter proposes semiparametric estimation of the relationship between growth rate of GDP per capita, growth rates of physical and human capital, labor as well as other covariates and common trends for a panel of 23 OECD countries observed over the period 1971–2015. The observed differentiated behaviors by country reveal strong heterogeneity. This is the motivation behind using a mixed fixed- and random coefficients model to estimate this relationship. In particular, this chapter uses a semiparametric specification with random intercepts and slopes coefficients. Motivated by Lee and Wand (2016), the authors estimate a mean field variational Bayes semiparametric model with random coefficients for this panel of countries. Results reveal nonparametric specifications for the common trends. The use of this flexible methodology may enrich the empirical growth literature underlining a large diversity of responses across variables and countries.
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Md Nasir Uddin and Saran Sarntisart
The purpose of this paper is to find the effects of human capital inequality on economic growth.
Abstract
Purpose
The purpose of this paper is to find the effects of human capital inequality on economic growth.
Design/methodology/approach
Thailand Labor Force Survey has been used to generate provincial average years of schooling and Gini coefficient of years of schooling for the years 1995‒2012. Econometric techniques have been employed to identify the effects of human capital inequality on economic growth.
Findings
Economic growth is inversely affected by the distribution of human capital in Thailand. The coefficient of human capital inequality suggests that if Gini coefficient increases by 0.01 points, gross provincial product (GPP) decreases by about 2 percentage points in the long run. However, the effect of average years of schooling in GPP is not significant.
Research limitations/implications
There is a lack of strong theoretical background for the relationship between human capital inequality and economic growth to support the empirical study.
Practical implications
The findings of the study help to design and evaluate education policies in developing countries like Thailand and other low- and middle-income countries.
Originality/value
This paper is among the first attempts to analyze the effect of human capital inequality on economic growth with sub-national level annual data. In addition, it considers cross sectional dependence in panel model.