Cost stickiness revisited: Empirical aplication for farms

This article reviews previous research regarding cost stickiness and performs an empirical analysis applied to a sample of farms. It recognizes that modelization of cost stickiness is a particular case of representation of cost variations as a function of output variations. It also discusses methodological issues and analyses cost stickiness for all registered farm costs and opportunity costs of family work. Costs exhibit a considerable level of rigidity. Even for variable costs, a decrease in activity involves a lower decrease in costs than the amounts involved when activity increases. While registered indirect costs slightly decrease when activity decreases, opportunity costs always increase. The study provides empirical evidence that cost stickiness is significantly reduced with better management decision practices.

Public infrastructure and the performance of manufacturing industries: short-and long-run

We present a theoretical framework for determining the short- and long-run effects of infrastructure. While the short-run effects have been the focus of most previous studies, here we derive long-run elasticities by taking into account the adjustment of quasi-fixed inputs to their optimum levels. By considering the impact of infrastructure on private investment decisions, we observe how, apart from the direct effect on costs in the short-run, infrastructure exerts an indirect source of influence in the long-run through their effect on private capital. The model is applied to manufacturing industries in the Spanish regions

A territorial model of commuting in Catalonia, 1986-1996

Commuting consists in the fact that an important fraction of workers in developed countries do not reside close to their workplaces but at long distances from them, so they have to travel to their jobs and then back home daily. Although most workers hold a job in the same municipality where they live or in a neighbouring one, an important fraction of workers face long daily trips to get to their workplace and then back home.Even if we divide Catalonia (Spain) in small aggregations of municipalities, trying to make them as close to local labour markets as possible, we will find out that some of them have a positive commuting balance, attracting many workers from other areas and providing local jobs for almost all their resident workers. On the other side, other zones seem to be mostly residential, so an important fraction of their resident workers hold jobs in different local labour markets. Which variables influence an area¿s role as an attraction pole or a residential zone? In previous papers (Artís et al, 1998a, 2000; Romaní, 1999) we have brought out the main individual variables that influence commuting by analysing a sample of Catalan workers and their commuting decisions. In this paper we perform an analysis of the territorial variables that influence commuting, using data for aggregate commuting flows in Catalonia from the 1991 and 1996 Spanish Population Censuses.These variables influence commuting in two different ways: a zone with a dense, welldeveloped economical structure will have a high density of jobs. Work demand cannot be fulfilled with resident workers, so it spills over local boundaries. On the other side, this economical activity has a series of side-effects like pollution, congestion or high land prices which make these areas less desirable to live in. Workers who can afford it may prefer to live in less populated, less congested zones, where they can find cheaper land, larger homes and a better quality of life. The penalty of this decision is an increased commuting time. Our aim in this paper is to highlight the influence of local economical structure and amenities endowment in the workplace-residence location decision. A place-to-place logit commuting models is estimated for 1991 and 1996 in order to find the economical and amenities variables with higher influence in commuting decisions. From these models, we can outline a first approximation to the evolution of these variables in the 1986-1996 period. Data have been obtained from aggregate flow travel-matrix from the 1986, 1991 and 1996 Spanish Population Censuses

Efectos regionales de la política monetaria : implicaciones para los países de la zona euro

De acuerdo con la teoría de las áreas monetàrias óptimas,los shocks asimétricos tienen un papel fundamental en la determinación de los beneficios y los costes derivados del establecimiento de una área monetaria. En este sentido, diferentes estudios recientes señalan una importante reducción del grado de asimetría de los shocks en términos reales a lo largo de los últimos años entre los países europeos como consecuencia de la mayor coordinación de las políticas económicas y de la aproximación de las estructuras productivas. De todas maneras, una de las cuestiones clave en el nuevo entorno económico, y que no ha sido demasiado considerada a la literatura reciente, es el posible papel desestabilitzador de la política monetaria común como consecuencia de las diferencias en los mecanismos de transmisión de la política monetaria en los distintos países y regiones de la Zona Euro. En este trabajo se considera la mencionada cuestión desde un punto de vista teórico y se analiza empíricamente la existencia de diferencias regionales en los efectos de la política monetaria llevada a término en España a lo largo de los últimos años con la finalidad d identificar los principales determinantes de esta asimetría en el ámbito europeo

The empirics of spatial competition: evidence from European regions

The New Economic Geography literature allows detailed analysis of the factors that determine the location decisions of firms in integrated markets. However, the competitive process is modelled in a rather rudimentary way, and the empirical evidence has usually been obtained from reduced-form econometric specifications. This study describes a structural model that takes into account strategic interactions between firms. We investigate the relationship between the degree of perceived competition ¿ not only from local firms but from firms in other regions ¿ and geographic concentration. The preliminary results indicate that, in aggregate terms, local firms present stronger competition than firms in other regions. Moreover, it is confirmed that greater geographical concentration of production reduces market power, due to the intensification of local competition; however, its impact on production costs is unclear.

The empirics of spatial competition: evidence from European regions

The New Economic Geography literature allows detailed analysis of the factors that determine the location decisions of firms in integrated markets. However, the competitive process is modelled in a rather rudimentary way, and the empirical evidence has usually been obtained from reduced-form econometric specifications. This study describes a structural model that takes into account strategic interactions between firms. We investigate the relationship between the degree of perceived competition ¿ not only from local firms but from firms in other regions ¿ and geographic concentration. The preliminary results indicate that, in aggregate terms, local firms present stronger competition than firms in other regions. Moreover, it is confirmed that greater geographical concentration of production reduces market power, due to the intensification of local competition; however, its impact on production costs is unclear.

Cost stickiness revisited: Empirical aplication for farms

This article reviews previous research regarding cost stickiness and performs an empirical analysis applied to a sample of farms. It recognizes that modelization of cost stickiness is a particular case of representation of cost variations as a function of output variations. It also discusses methodological issues and analyses cost stickiness for all registered farm costs and opportunity costs of family work. Costs exhibit a considerable level of rigidity. Even for variable costs, a decrease in activity involves a lower decrease in costs than the amounts involved when activity increases. While registered indirect costs slightly decrease when activity decreases, opportunity costs always increase. The study provides empirical evidence that cost stickiness is significantly reduced with better management decision practices.

Efectos regionales de la política monetaria : implicaciones para los países de la zona euro

De acuerdo con la teoría de las áreas monetàrias óptimas,los shocks asimétricos tienen un papel fundamental en la determinación de los beneficios y los costes derivados del establecimiento de una área monetaria. En este sentido, diferentes estudios recientes señalan una importante reducción del grado de asimetría de los shocks en términos reales a lo largo de los últimos años entre los países europeos como consecuencia de la mayor coordinación de las políticas económicas y de la aproximación de las estructuras productivas. De todas maneras, una de las cuestiones clave en el nuevo entorno económico, y que no ha sido demasiado considerada a la literatura reciente, es el posible papel desestabilitzador de la política monetaria común como consecuencia de las diferencias en los mecanismos de transmisión de la política monetaria en los distintos países y regiones de la Zona Euro. En este trabajo se considera la mencionada cuestión desde un punto de vista teórico y se analiza empíricamente la existencia de diferencias regionales en los efectos de la política monetaria llevada a término en España a lo largo de los últimos años con la finalidad d identificar los principales determinantes de esta asimetría en el ámbito europeo

Hay competencia en el mercado europeo de transporte aéreo?: el caso español

La liberalización del transporte aéreo que se llevó a término en la Unión Europea a principios de los años noventa ha tenido efectos positivos sobre el bienestar del viajero. No obstante, existe un consenso en la literatura académica que estos efectos dependen de la existencia de una competencia efectiva en el nivel de la ruta. En este sentido, se plantea el problema que puede llegar a suponer las ventajas de escalera de las compañías dominantes en cada mercado interior. Además, se pretende capturar la diferenciación de productos como característica esencial de la industria del transporte aéreo. El análisis de estas cuestiones se realiza de la forma siguiente. En primer lugar, se hace referencia a los principales aspectos económicos que condicionan la competencia en el transporte aéreo. Y en segundo lugar, se implementa un modelo empírico basado en un sistema de tres ecuaciones, que se estima mediante la técnica de las variables instrumentales. La muestra utilizada hace referencia al año 2001 para la mayoría de las rutas del mercado interior español de vuelos regulares en dónde hay competencia. Los resultados de la estimación muestran la existencia de unas condiciones de competencia diferentes según el segmento del mercado al cual se dirigen las compañías aéreas. Efectivamente, la competencia en precios (calidad) parece ser predominante en el segmento de viajeros por motivos personales (negocios). Adicionalmente, el dominio que la compañía dominante tiene sobre la mayoría de las rutas parece descansar en las ventajas competitivas, tanto en términos de costes como en términos de demanda, que le proporciona el control de la red aeroportuaria nacional. De todo esto se puede inferir que el mantenimiento y/o aumento de los beneficios de la liberalización de los servicios de transporte aéreo exige extender la liberalización al uso del aeropuertos así como descentralizar su gestión.

Public infrastructure and the performance of manufacturing industries: short-and long-run

We present a theoretical framework for determining the short- and long-run effects of infrastructure. While the short-run effects have been the focus of most previous studies, here we derive long-run elasticities by taking into account the adjustment of quasi-fixed inputs to their optimum levels. By considering the impact of infrastructure on private investment decisions, we observe how, apart from the direct effect on costs in the short-run, infrastructure exerts an indirect source of influence in the long-run through their effect on private capital. The model is applied to manufacturing industries in the Spanish regions

A territorial model of commuting in Catalonia, 1986-1996

Commuting consists in the fact that an important fraction of workers in developed countries do not reside close to their workplaces but at long distances from them, so they have to travel to their jobs and then back home daily. Although most workers hold a job in the same municipality where they live or in a neighbouring one, an important fraction of workers face long daily trips to get to their workplace and then back home.Even if we divide Catalonia (Spain) in small aggregations of municipalities, trying to make them as close to local labour markets as possible, we will find out that some of them have a positive commuting balance, attracting many workers from other areas and providing local jobs for almost all their resident workers. On the other side, other zones seem to be mostly residential, so an important fraction of their resident workers hold jobs in different local labour markets. Which variables influence an area¿s role as an attraction pole or a residential zone? In previous papers (Artís et al, 1998a, 2000; Romaní, 1999) we have brought out the main individual variables that influence commuting by analysing a sample of Catalan workers and their commuting decisions. In this paper we perform an analysis of the territorial variables that influence commuting, using data for aggregate commuting flows in Catalonia from the 1991 and 1996 Spanish Population Censuses.These variables influence commuting in two different ways: a zone with a dense, welldeveloped economical structure will have a high density of jobs. Work demand cannot be fulfilled with resident workers, so it spills over local boundaries. On the other side, this economical activity has a series of side-effects like pollution, congestion or high land prices which make these areas less desirable to live in. Workers who can afford it may prefer to live in less populated, less congested zones, where they can find cheaper land, larger homes and a better quality of life. The penalty of this decision is an increased commuting time. Our aim in this paper is to highlight the influence of local economical structure and amenities endowment in the workplace-residence location decision. A place-to-place logit commuting models is estimated for 1991 and 1996 in order to find the economical and amenities variables with higher influence in commuting decisions. From these models, we can outline a first approximation to the evolution of these variables in the 1986-1996 period. Data have been obtained from aggregate flow travel-matrix from the 1986, 1991 and 1996 Spanish Population Censuses

Transitional effects of a pension system change in Spain

This paper studies the output effects, transition costs and the change in pension benefits derived from the substitution of the current unfunded pension system by a fully funded pension system financed through mandatory savings.These effects are estimated by using reduced versions of the neoclassical and endogenous growth frameworks. Because of the greater capital accumulation during the transition phase, final output increases by 23,6% (neoclassicalframework); and a 24,5-31,5% (endogenous growth framework). The initial revenue loss for the government would represent a 4,8% of the GDP, raising very slowly during the transition period. Given the new growth rates, rates of return ofphysical capital, and financial intermediation costs, we have that the capitalization pension benefits obtained by all 30-contribution-year worker would be more than twice than those that guarantee the financial sustainability of thepublic pension system

Auction theory, sequential local service privatization, and the effects of geographical scale economies on effective competition

A sequential weakly efficient two-auction game with entry costs, interdependence between objects, two potential bidders and IPV assumption is presented here in order to give some theoretical predictions on the effects of geographical scale economies on local service privatization performance. It is shown that the first object seller takes profit of this interdependence. The interdependence externality rises effective competition for the first object, expressed as the probability of having more than one final bidder. Besides, if there is more than one final bidder in the first auction, seller extracts the entire bidder¿s expected future surplus differential between having won the first auction and having lost. Consequences for second object seller are less clear, reflecting the contradictory nature of the two main effects of object interdependence. On the one hand, first auction winner becomes ¿stronger¿, so that expected payments rise in a competitive environment. On the other hand, first auction loser becomes relatively ¿weaker¿, hence (probably) reducing effective competition for the second object. Additionally, some contributions to static auction theory with entry cost and asymmetric bidders are presented in the appendix

Monetary integration and the cost of borrowing

With the beginning of the European Monetary Union (EMU), euro-area sovereign securities¿ adjusted spreads over Germany (corrected from the foreign exchange risk) experienced an increase that caused a lower than expected decline in borrowing costs. The objective of this paper is to study what explains that rising. In particular, if it took place a change in the price assigned by markets to domestic (credit risk and/or market liquidity) or to international risk factors. The empirical evidence supports the idea that a change in the market value of liquidity occurred with the EMU. International and default risk play a smaller role

Worksharing and access discounts in the postal sector with asymmetrics information

This paper analyses the optimal worksharing discount granted to mailers and entrants in a liberalized sector when there is asymmetric information about the Post Office's cost. When the regulator is unable to ascertain which part of total cost of sorting has to be attributed to each sorting facility, the optimal 'accesss discount' given to the entrants is set in a pro-competitive way, thus facilitating the entry of firms that are less afficient than the Post Office. Howerver, with the same asymmetry of information, the optimal 'worksharing discount' given to the mailers is set to favor the Post Office, even when it is less efficient than the mailers in providing the sorting.