Evaluating the impact of public subsidies on a firm's performance: a quasi-experimental approach

Many regional governments in developed countries design programs to improve the competitiveness of local firms. In this paper, we evaluate the effectiveness of public programs whose aim is to enhance the performance of firms located in Catalonia (Spain). We compare the performance of publicly subsidised companies (treated) with that of similar, but unsubsidised companies (non-treated). We use the Propensity Score Matching (PSM) methodology to construct a control group which, with respect to its observable characteristics, is as similar as possible to the treated group, and that allows us to identify firms which retain the same propensity to receive public subsidies. Once a valid comparison group has been established, we compare the respective performance of each firm. As a result, we find that recipient firms, on average, change their business practices, improve their performance, and increase their value added as a direct result of public subsidy programs.

Algunes reflexions sobre la construcció d'indicadors indirectes pel seguiment de l'activitat industrial regional

En un gran nombre d'economies, l'evolució de la producció industrial s'analitza a partir de la informació sobre el Producte Industrial Brut i/o el Valor Afegit Brut que proporcionen les Comptabilitats Nacionals. A Espanya, la utilització d'aquestes dades presenta el problema que no estan disponibles tan ràpidament com seria desitjable. En conseqüència, no és possible realitzar un seguiment a curt termini de l'activitat industrial a partir dels mateixos. Per a solucionar aquest problema, l'Institut Nacional d'Estadística elabora un Índex de Producció Industrial mensual a partir de la informació obtinguda a través d'una enquesta dirigida a una mostra representativa de les empreses espanyoles. No obstant això, a nivell regional, les dificultats per a realitzar un seguiment de l'activitat industrial són majors a causa de l'escassesa d'informació estadística. Durant els últims anys, diferents institucions públiques i privades han començat a elaborar indicadors d'activitat per a algunes regions espanyoles, encara que a partir de metodologies no homogènies, de manera que aquests índexs no són directament comparables. Per a corregir aquesta situació, en diferents fòrums s'ha proposat emprar la metodologia utilitzada per l'Institut d'Estadística de Catalunya (IEC) per a la comunitat catalana com alternativa per a aquelles comunitats espanyoles que no disposen d'un indicador de l'activitat industrial, atès que per a Catalunya resulta una metodologia adequada. En aquest treball s'estudia la idoneïtat d'estendre aquesta metodologia a la resta de regions espanyoles. Per a això, es construeixen uns indicadors d'acord amb la metodologia del IEC i es comparen amb els índexs regionals obtinguts per mètodes directes per a tres de les quatre regions que existeixen: Andalusia, Astúries i Euskadi

Public health expenditure and spatial interactions in a decentralized national health system

One of the limitations of cross-country health expenditure analysis refers to the fact that the financing, the internal organization and political restraints of health care decision-making are country-specific and heterogeneous. Yet, a potential solution is to examine the influence of such effects in those countries that have undertaken decentralization processes. In such a setting, it is possible to examine potential expenditure spillovers across the geography of a country as well as the influence of the political ideology of regional incumbents on public health expenditure. This paper examines the determinants of public health expenditure within Spanish region-states (Autonomous Communities, ACs), most of them subject to similar financing structures although exhibiting significant heterogeneity as a result of the increasing decentralization, region-specific political factors along with different use of health care inputs, economic dimension and spatial interactions

Public health expenditure and spatial interactions in a decentralized national health system

One of the limitations of cross-country health expenditure analysis refers to the fact that the financing, the internal organization and political restraints of health care decision-making are country-specific and heterogeneous. Yet, a potential solution is to examine the influence of such effects in those countries that have undertaken decentralization processes. In such a setting, it is possible to examine potential expenditure spillovers across the geography of a country as well as the influence of the political ideology of regional incumbents on public health expenditure. This paper examines the determinants of public health expenditure within Spanish region-states (Autonomous Communities, ACs), most of them subject to similar financing structures although exhibiting significant heterogeneity as a result of the increasing decentralization, region-specific political factors along with different use of health care inputs, economic dimension and spatial interactions

Antipsychotic polypharmacy in a regional health service: a population-based study

Background To analyse the extent and profile of outpatient regular dispensation of antipsychotics, both in combination and monotherapy, in the Barcelona Health Region (Spain), focusing on the use of clozapine and long-acting injections (LAI). Methods Antipsychotic drugs dispensed for people older than 18 and processed by the Catalan Health Service during 2007 were retrospectively reviewed. First and second generation antipsychotic drugs (FGA and SGA) from the Anatomical Therapeutic Chemical classification (ATC) code N05A (except lithium) were included. A patient selection algorithm was designed to identify prescriptions regularly dispensed. Variables included were age, gender, antipsychotic type, route of administration and number of packages dispensed. Results A total of 117,811 patients were given any antipsychotic, of whom 71,004 regularly received such drugs. Among the latter, 9,855 (13.9%) corresponded to an antipsychotic combination, 47,386 (66.7%) to monotherapy and 13,763 (19.4%) to unspecified combinations. Of the patients given antipsychotics in association, 58% were men. Olanzapine (37.1%) and oral risperidone (36.4%) were the most common dispensations. Analysis of the patients dispensed two antipsychotics (57.8%) revealed 198 different combinations, the most frequent being the association of FGA and SGA (62.0%). Clozapine was dispensed to 2.3% of patients. Of those who were receiving antipsychotics in combination, 6.6% were given clozapine, being clozapine plus amisulpride the most frequent association (22.8%). A total of 3.800 patients (5.4%) were given LAI antipsychotics, and 2.662 of these (70.1%) were in combination. Risperidone was the most widely used LAI. Conclusions The scant evidence available regarding the efficacy of combining different antipsychotics contrasts with the high number and variety of combinations prescribed to outpatients, as well as with the limited use of clozapine. Background To analyse the extent and profile of outpatient regular dispensation of antipsychotics, both in combination and monotherapy, in the Barcelona Health Region (Spain), focusing on the use of clozapine and long-acting injections (LAI). Methods Antipsychotic drugs dispensed for people older than 18 and processed by the Catalan Health Service during 2007 were retrospectively reviewed. First and second generation antipsychotic drugs (FGA and SGA) from the Anatomical Therapeutic Chemical classification (ATC) code N05A (except lithium) were included. A patient selection algorithm was designed to identify prescriptions regularly dispensed. Variables included were age, gender, antipsychotic type, route of administration and number of packages dispensed. Results A total of 117,811 patients were given any antipsychotic, of whom 71,004 regularly received such drugs. Among the latter, 9,855 (13.9%) corresponded to an antipsychotic combination, 47,386 (66.7%) to monotherapy and 13,763 (19.4%) to unspecified combinations. Of the patients given antipsychotics in association, 58% were men. Olanzapine (37.1%) and oral risperidone (36.4%) were the most common dispensations. Analysis of the patients dispensed two antipsychotics (57.8%) revealed 198 different combinations, the most frequent being the association of FGA and SGA (62.0%). Clozapine was dispensed to 2.3% of patients. Of those who were receiving antipsychotics in combination, 6.6% were given clozapine, being clozapine plus amisulpride the most frequent association (22.8%). A total of 3.800 patients (5.4%) were given LAI antipsychotics, and 2.662 of these (70.1%) were in combination. Risperidone was the most widely used LAI. Conclusions The scant evidence available regarding the efficacy of combining different antipsychotics contrasts with the high number and variety of combinations prescribed to outpatients, as well as with the limited use of clozapine.

Beyond pure public and pure private management models: Mixed firms in the European Airport Industry

The use of private funding and management enjoys an increasing trend in airports. The literature has not paid enough attention to the mixed management models in this industry, although many European airports take the form of mixed firms or Institutional PPP, where ownership is shared between public and private sectors. We examine the determinants of the degree of private participation in the European airport sector. Drawing on a sample of the 100 largest European airports we estimate a multivariate equation in order to determine the role of airport characteristics, fiscal variables and political factors on the extent of private involvement. Our results confirm the alignment between public and private interests in PPPs. Fiscal constraints and market attractiveness promote private participation. Integrated governance models and the share of network carriers prevent the presence of private ownership, while the degree of private participation appears to be pragmatic rather than ideological.

Recovery Risk and Labor Costs in Public-Private Partnerships : Contractual Choice in the US Water industry

We use an ordered logistic model to empirically examine the factors that explain varying degrees of private involvement in the U.S. water sector through public-private partnerships. Our estimates suggest that a variety of factors help explain greater private participation in this sector. We find that the risk to private participants regarding cost recovery is an important driver of private participation. The relative cost of labor is also a key factor in determining the degree of private involvement in the contract choice. When public wages are high relative to private wages, private participation is viewed as a source of cost savings. We thus find two main drivers of greater private involvement: one encouraging private participation by reducing risk, and another encouraging government to seek out private participation in lowering costs.

The Emergence of Regional ICT Regulatory Spaces

This paper examines the role that existing Latin American policy institutions and regulatory coordination mechanisms (otherwise referred to as “regional regulatory spaces”) play in innovation and development of the ICT sector. In doing so, it recognizes that sector regulation does not currently match regional development, thereby limiting its potential progress. In order to shed light on the role that the “regional regulatory space” could potentially play, the author addresses three main questions: · Is there a hierarchy of policies by which it is presumed easy to “coordinate within well-defined technical subjects” but extremely challenging to “agree in matters of public policy?” · What would happen if policy divergence became more important than convergence? Is it reasonable to consider creating “regional regulatory spaces?” or should we focus solely on technological coordination? · Do institutions capable of serving as effective regional regulatory spaces already exist in Latin America or should we consider modifying existing institutions or creating new institutions? After analyzing these three overarching areas of concern, this paper then discusses the need to create a regional space in order to harmonize ICT regulatory frameworks and public policies. Ultimately, this work aims to advance the institutional formulation beyond pre-existing efforts.

Causality and contagion in peripheral EMU public debt markets: a dynamic approach

Our research aims to analyze the causal relationships in the behavior of public debt issued by peripheral member countries of the European Economic and Monetary Union -EMU-, with special emphasis on the recent episodes of crisis triggered in the eurozone sovereign debt markets since 2009. With this goal in mind, we make use of a database of daily frequency of yields on 10-year government bonds issued by five EMU countries -Greece, Ireland, Italy, Portugal and Spain-, covering the entire history of the EMU from its inception on 1 January 1999 until 31 December 2010. In the first step, we explore the pair-wise causal relationship between yields, both for the whole sample and for changing subsamples of the data, in order to capture the possible time-varying causal relationship. This approach allows us to detect episodes of contagion between yields on bonds issued by different countries. In the second step, we study the determinants of these contagion episodes, analyzing the role played by different factors, paying special attention to instruments that capture the total national debt -domestic and foreign- in each country.

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.

Ownership, Incentives and Hospitals

This article analyzes hospital privatization by comparing costs and quality between different ownership forms. We put the attention on the distinction between public hospitals and private hospitals with public funding. Using information about Spanish hospitals, we have found that private hospitals provide services at a lower cost at expenses of lower quality. We observe that property rights theory is fulfilled at least for the Spanish hospital market. The way that Heath Authorities finance publicly funded hospitals may be responsible for the differences in incentives between public and private centers. We argue that the trade-off between costs and quality could be minimized by designing financing contracts with fixed and variable components.

Public and Private Production in a Mixed Delivery System: Regulation, Competition and Costs

Academics and policy makers are increasingly shifting the debate concerning the best form of public service provision beyond the traditional dilemma between pure public and pure private delivery modes, because, among other reasons, there is a growing body of evidence that casts doubt on the existence of systematic cost savings from privatization, while any competition seems to be eroded over time. In this paper we compare the relative merits of public and private delivery within a mixed delivery system. We study the role played by ownership, transaction costs, and competition on local public service delivery within the same jurisdiction. Using a stochastic cost frontier, we analyze the public-private urban bus system in the Barcelona Metropolitan Area. Our results suggest that private firms tendering the service have higher delivery costs than those incurred by the public firm, especially when transaction costs are taken into account. Tenders, therefore, do not help to reduce delivery costs. Our results suggest that under a mixed delivery scheme, which permits the co-existence of public and private production, the metropolitan government and the regulator can use private delivery to contain costs in the public firm and, at the same time, benefit from the greater flexibility of private firms for dealing with events not provided for under contract.