Dollarization and the relationship between EMBI and fundamentals Latin American countries

This paper presents empirical evidence on the interrelationship that exists between the evolution of the Emerging Markets Bonds Index (EMBI) and some macroeconomic variables in seven Latin American countries; two of them (Ecuador and Panama), full dollarized. We make use of a Cointegrated Vector framework to analyze the short run effects from 2001 to 2009. The results suggest that EMBI is more stable in dollarized countries and that its evolution influences economic activity in non-dollarized economies; suggesting that investors confidence might be higher in dollarized countries where real and financial economic evolution are less tied than in non-dollarized ones.

Dollarization and the relationship between EMBI and fundamentals Latin American countries

This paper presents empirical evidence on the interrelationship that exists between the evolution of the Emerging Markets Bonds Index (EMBI) and some macroeconomic variables in seven Latin American countries; two of them (Ecuador and Panama), full dollarized. We make use of a Cointegrated Vector framework to analyze the short run effects from 2001 to 2009. The results suggest that EMBI is more stable in dollarized countries and that its evolution influences economic activity in non-dollarized economies; suggesting that investors confidence might be higher in dollarized countries where real and financial economic evolution are less tied than in non-dollarized ones.

Privatization, cooperation and costs of solid waste services in small towns

This paper analyzes the cost implications of privatization and cooperation in the provision of solid waste services for a sample of small municipalities. In conducting this empirical analysis, a survey is first designed and administered to municipalities in the Spanish region of Aragon, and then an estimation of the determinants of service costs is undertaken, considering the possible endogeneity of delivery choices. Our findings indicate that cooperation is more effective than privatization in saving costs. Both production forms can enable small municipalities to cut costs by exploiting scale economies. However, the fact that inter-municipal cooperation involves lower transaction costs and is less likely to be affected by competition problems would seem to account for the fact that it is a more effective way of reducing costs.

The farthest need the best. Human capital composition and development-specific economic growth

We provide robust and compelling evidence of the marked impact of tertiary education on the economic growth of less developed countries and of its the relatively smaller impact on the growth of developed ones. Our results argue in favor of the accumulation of high skill levels especially in technologically under-developed countries and, contrary to common wisdom, independently of the fact that these economies might initially produce lower-technology goods or perform technology imitation. Our results are robust to the different measures used in proxying human capital and to the adjustments made for cross-country differences in the quality of education. Country-specific institutional quality, as well as other indicators including legal origin, religious fractionalization and openness to trade have been used to control for the robustness of the results. These factors are also shown to speed up technology convergence thereby confirming previous empirical studies. Our estimates tackle problems of endogeneity by adopting a variety of techniques, including instrumental variables -for both panel and cross-section analyses- and the two-step efficient dynamics system GMM.

Why do municipalities cooperate to provide local public services? An empirical analysis

Intermunicipal cooperation is being increasingly adopted in various countries as a part of local service delivery reforms. This paper draws on survey data from Spain’s municipalities to examine the reasons underpinning the decisions of local governments to engage in intermunicipal cooperation and privatisation. Our empirical analysis indicates that small municipalities prefer to rely on cooperation for reducing costs, while their larger counterparts prefer to privatise the delivery of services. By cooperating, scale economies can be achieved with lower transaction costs and fewer concerns for competition than is the case via private production.

Urban transport governance reform in Barcelona

The unusual mixed public-private structure of the urban bus market in the metropolitan area of Barcelona provides an interesting context in which to analyze the management challenges and opportunities of the partial privatization of public services. Initiatives used by the public regulator to promote competition for contracts, such as short term concessions to private contractors and the removal of entry barriers, have considerable potential for improving efficiency and quality. The growth in the share of routes managed by private firms in recent years shows that privatization is a credible threat that may well stimulate improved performance among public managers. The type of reform implemented in Barcelona is of interest to all metropolitan areas large enough to operate under constant returns to scale regimes, and suitable for potential concessions of routes in segregated areas inside the metropolitan area, so as not to miss out on the benefits of economies of density.

Exploring the link between flexible working and organizational performance

The expansion of flexible work experienced since the 1980s in developed economies is consistent with a more generic trend towards organizational flexibility, which many authors see as essential in order to compete in the dynamic global environment (Volberda, 1998). From this point of view, the changing demands of the environment have forced organizations to seek the ability to adapt rapidly and effectively as a means to be successful or even to survive. In the quest for flexibility, every area of the organization has been scrutinized in order to render it as ¿agile¿ as possible. In the human resources arena, this analysis has led to the definition of diverse ¿flexible working practices¿ (FWP) that describe a wide range of employment practices, which differ from the traditional full-time job with a fixed salary and a permanent contract. These practices have been described using other terms, such as ¿alternative¿ (Polivka, 1996; Powell & Mainiero, 1999), ¿non-standard¿ (Kalleberg, 2000), or ¿atypical¿ (De Grip, Hoevenberg, &m Willems, 1997), which coincide in denoting their divergence from the most traditional forms of employment. This article will show that quite different practices have been embraced by the common term ¿flexible working practices.¿ Subsequently, the results of empirical research regarding the implications for organizational performance of a number of flexible practices will be commented on.

Regional heterogeneity in wage distributions. Evidence from Spain.

Regional differences in real wages have been shown to be both large and persistent in the U.S. and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer-employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.

Empirical analysis of solid management waste costs: Some evidence from Galicia, Spain

This paper analyses the factors that determine solid waste service costs. The empirical analysis is based on information derived from a survey conducted in a sample of Galician municipalities. The results reveal economies of scale in municipalities of fewer than 50,000 inhabitants, such that cooperation between these municipalities could lead to cost savings. It also appears that private delivery is not cheaper than public delivery. Finally, designating a larger proportion of the total waste volume to recycling does not imply greater costs.

Evidence on the role of ownership structure on firms' innovative performance

Based on the Knowledge Production Function framework given by Griliches -1979-, we slightly modify it so that the innovative output depends upon a set of factors related to the firm internal characteristics and are influenced by the environment. Specifically, regarding the firm internal determinants the effect of the concentration of the ownership, the composition of the boards of directors and the effect of the nature of the ownership (foreign and public) are analyzed. Additionally, in order to capture the determinants of the environment in which the firm operates other variables concerning the internationalization of market, the agglomeration economies and the regional knowledge externalities are also considered. In order to assess the impact of these determinants on the number of patents and models of use awarded by the firm, the discreteness of the latter variable has to be taken into account. We apply Poisson and Negative Binomial models for a more comprehensive evaluation of the hypothesis in a panel of Spanish manufacturing firms. The results show patenting activity is positively favoured by being located in an environment with a high innovative activity, due to the existence of knowledge spillovers and agglomeration economies.

Driver costs in small firms: Empirical analysis for farms

The agricultural sector has always been characterized by a predominance of small firms. International competition and the consequent need for restraining costs are permanent challenges for farms. This paper performs an empirical investigation of cost behavior in agriculture using panel data analysis. Our results show that transactions caused by complexity influence farm costs with opposite effects for specific and indirect costs. While transactions allow economies of scale in specific costs, they significantly increase indirect costs. However, the main driver for farm costs is volume. In addition, important differences exist for small and big farms, since transactional variables significantly influence the former but not the latter. While sophisticated management tools, such ABC, could provide only limited complementary useful information but no essential allocation bases for farms, they seem inappropriate for small farms

Driver costs in small firms: Empirical analysis for farms

The agricultural sector has always been characterized by a predominance of small firms. International competition and the consequent need for restraining costs are permanent challenges for farms. This paper performs an empirical investigation of cost behavior in agriculture using panel data analysis. Our results show that transactions caused by complexity influence farm costs with opposite effects for specific and indirect costs. While transactions allow economies of scale in specific costs, they significantly increase indirect costs. However, the main driver for farm costs is volume. In addition, important differences exist for small and big farms, since transactional variables significantly influence the former but not the latter. While sophisticated management tools, such ABC, could provide only limited complementary useful information but no essential allocation bases for farms, they seem inappropriate for small farms

The Determinants of Entrepreneurship in Developing Countries

We address the question of what determines entrepreneurship in developing countries. In particular, because of the influence that this may have on the design of entrepreneurship policies, our main concern is whether the determinants of entrepreneurship are the same and/or have the same impact in developed and developing countries. To this end, we discuss the arguments put forward in the literature in support of the existence of differences in the determinants of entrepreneurship between developed and developing countries. We also analyse the results found in empirical studies on the determinants of formal firm entry (following the World Bank, our proxy of entrepreneurship) in developing countries and compare these results with those typically found in developed countries. Our main conclusion is that policy makers in developing economies should be careful when using evidence from developed countries to design entrepreneurship-promoting policies. Key words: entrepreneurship, developing countries. JEL: O1; O12; L26; M13

Investigating the impact of small versus large firms on economic performance of countries and industries

Following earlier work by Audretsch et al. (2002), we assume that an optimal size-class structure exists, in terms of achieving maximal economic growth rates. Such an optimal structure is likely to exist as economies need a balance between the core competences of large firms (such as exploitation of economies of scale) and those of smaller firms (such as flexibility and exploration of new ideas). Accordingly, changes in size-class structure (i.e., changes in the relative shares in economic activity accounted for by micro, small, medium-sized and large firms) may affect macro-economic growth. Using a unique data base of the EU-27 countries for the period 2002-2008 for five broad sectors of economic activity and four size-classes, we find empirical support which suggests that, on average for these countries over this period, the share of micro and large firms may have been ‘above optimum’ (particularly in lower income EU countries) whereas the share of medium-sized firms may have been ‘below optimum’ (particularly in higher income EU countries). This evidence suggests that the transition from a ‘managed’ to an ‘entrepreneurial’ economy (Audretsch and Thurik, 2001) has not been completed yet in all countries of the EU-27. Keywords: small firms, large firms, size-classes, macro-economic performance

Similar problems, different solutions: Comparing refuse collection in the Netherlands and Spain

Local public service provision can vary greatly because of differences in institutional arrangements, public service markets, and national traditions regarding government intervention. In this paper we compare the procedures adopted by the local governments of the Netherlands and Spain in arranging for the provision of solid waste collection. We find that Spain faces a consolidation problem, opting more frequently to implement policies of privatization and cooperation, at the expense of competition. By contrast, the Netherlands has, on average, larger municipalities, resorting somewhat less to privatization and cooperation, and more to competition. The two options - cooperation and competition - have their merits when striving to strike a balance between transaction costs and scale economies. The choices made in organizational reform seem to be related to several factors, among which the nature of the political system and the size of municipalities appear to be relevant.