Evidence on the determinants of foreign direct investment: the case of three european regions

This study aims at analyzing the determinants of FDI (foreign direct investment) inflows for a group of European regions. The originality of this approach lies in the use of disaggregated regional data. First, we develop a qualitative description of our database and discuss the importance of the macroeconomic determinants in attracting FDI. Then, we provide an econometric exercise to identify the potential determinants of FDI. In spite of choosing regions presenting economic similarities, we show that regional FDI inflows rely on a combination of factors that differs from one region to another.

The Determinants of Entry are not Independent of Start-up Size: Some evidence from Spanish manufacturing

In this paper we explore the determinants of firm start-up size of Spanish manufacturing industries. The industries' barriers to entry affect the ability of potential entrants to enter the markets and the size range at which they decide to enter. In order to examine the relationships between barriers to entry and size we applied the quantile regression techniques. Our results indicate that the variables that characterize the structure of the market, the variables that are related to the behaviour of the incumbent firms and the rate of growth of the industries generate different barriers depending on the initial size of the entrants. Keywords: Entry, regression quantiles, start-up size. JEL classification: L110, L600

The short and long-run determinants of the real exchange rate in Mexico

This paper explores the real exchange rate behavior in Mexico from 1960 until 2005. Since the empirical analysis reveals that the real exchange rate is not mean reverting, we propose that economic fundamental variables affect its evolution in the long-run. Therefore, based on equilibrium exchange rate paradigms, we propose a simple model of real exchange rate determination which includes the relative labor productivity, the real interest rates and the net foreign assets over a long period of time. Our analysis also considers the dynamic adjustment in response to shocks through impulse response functions derived from the multivariate VAR model.

The Determinants of pricing in pharmaceuticals: are U.S. prices really higher than those of Canada?

This paper studies price determination in pharmaceutical markets using data for 25 countries, six years and a comprehensive list of products from the MIDAS IMS database. We show that market power and the quality of the product has a significantly positive impact of prices. The nationality of the producer appears to have a small and often insignificant impact on prices, which suggests that countries which regulates prices have relatively little power to do it in a way that advances narrow national interest. We produce a theoretical explanation for this phenomenon based on the fact that low negotiated prices in a country would have a knock-on effect in other markets, and is thus strongly resisted by producers. Another key finding is that the U.S. has prices that are not significantly higher than those of countries with similar income levels. This, together with the former observation on the effect of the nationality of producers casts doubt on the ability of countries to purs

Exploring Determinants of Urban Motorcycle Accident Severity: The Case of Barcelona

Public authorities and road users alike are increasingly concerned by recent trends in road safety outcomes in Barcelona, which is the European city with the highest number of registered Powered Two-Wheel (PTW) vehicles per inhabitant,. In this study we explore the determinants of motorcycle and moped accident severity in a large urban area, drawing on Barcelona’s local police database (2002-2008). We apply non-parametric regression techniques to characterize PTW accidents and parametric methods to investigate the factors influencing their severity. Our results show that PTW accident victims are more vulnerable, showing greater degrees of accident severity, than other traffic victims. Speed violations and alcohol consumption provide the worst health outcomes. Demographic and environment-related risk factors, in addition to helmet use, play an important role in determining accident severity. Thus, this study furthers our understanding of the most vulnerable vehicle types, while our results have direct implications for local policy makers in their fight to reduce the severity of PTW accidents in large urban areas.

The Electoral Determinants of Collective Remittances: The Mexican 3x1 Program for Migrants

The 3x1 Program for Migrants is a matching grant scheme that seeks to direct the money sent by migrant organizations abroad to the provision of public and social infrastructure, and to productive projects in migrants’ communities of origin. To do so, the municipal, state, and federal administrations match the amount sent by hometown associations by 3 to 1. This opens the door to the political manipulation of the program. We explore the impact of a particular facet of Mexican political life on the operation of the 3x1: its recent democratization and the increasing political competition at the municipal level. Relying on the literature on redistributive politics, we posit that an increasing number of effective parties in elections may have two different effects. On the one hand, the need to cater to more heterogeneous constituencies may increase the provision of public projects. On the other hand, since smaller coalitions are needed to win elections under tighter competition, fewer public and more private (clientelistic) projects could be awarded. Using a unique dataset on the 3x1 Program for Migrants for over 2,400 municipalities in the period 2002 through 2007, we find a lower provision of public goods in electorally competitive jurisdictions. Thus, we remain sceptical about the program success in promoting public goods in politically competitive locations with high migration levels.

The determinants of university patenting: Do incentives matter?

In recent years various studies have examined the factors that may explain academic patents. Existing analyses have also underlined the substantial differences to be found in European countries in the institutional framework that defines property rights for academic patents. The objective of this study is to contribute to the empirical literature on the factors explaining academic patents and to determine whether the incentives that universities offer researchers contribute towards explaining the differences in academic patenting activity. The results of the econometric analysis for the Spanish universities point towards the conclusion that the principal factor determining the patents is funding of R&D while royalty incentives to researchers do not appear to be significant.

(Optimal) Spatial Aggregation in the Determinants of Industrial Location

Empirical studies on the determinants of industrial location typically use variables measured at the available administrative level (municipalities, counties, etc.). However, this amounts to assuming that the effects these determinants may have on the location process do not extent beyond the geographical limits of the selected site. We address the validity of this assumption by comparing results from standard count data models with those obtained by calculating the geographical scope of the spatially varying explanatory variables using a wide range of distances and alternative spatial autocorrelation measures. Our results reject the usual practice of using administrative records as covariates without making some kind of spatial correction. Keywords: industrial location, count data models, spatial statistics JEL classification: C25, C52, R11, R30

Why do creative industries cluster? An analysis of the determinants of clustering of creative industries

Creative industries tend to concentrate mainly around large- and medium-sized cities, forming creative local production systems. The text analyses the forces behind clustering of creative industries to provide the first empirical explanation of the determinants of creative employment clustering following a multidisciplinary approach based on cultural and creative economics, evolutionary geography and urban economics. A comparative analysis has been performed for Italy and Spain. The results show different patterns of creative employment clustering in both countries. The small role of historical and cultural endowments, the size of the place, the average size of creative industries, the productive diversity and the concentration of human capital and creative class have been found as common factors of clustering in both countries.

Is it redistribution or centralization? On the determinants of government investment in infrastructure

The dilemma efficiency versus equity, together with political partisan interests, has received increasing attention to explain the territorial allocation of investments. However, centralization intended to introduce or reinforce hierarchization in the political system has not been object as of now of empirical analysis. Our main contribution to the literature is providing evidence that meta-political objectives related to the ordering of political power and administration influence regional investment. In this way, we find evidence that network mode’s (roads and railways) investment programs are influenced by the centralization strategy of investing near to the political capital, while investment effort in no-network modes (airports and ports) appears to be positively related to distance. Since investment in surface transportation infrastructures is much higher than that in airports and ports, and taken into account that regions surrounding the political capital are poorer than the average, we suggest that centralization rather than redistribution has been the driver for the concentration of public investment on these regions.

Location Determinants of New Firms: Does Skill Level of Human Capital Really Matter?

This paper is about the role played by stock of human capital on location decisions of new manufacturing plants. We analyse the effect of several skill levels (from basic school to PhD) on decisions about the location of plants in various industries and, therefore, of different technological levels. We also test whether spatial aggregation level biases the results and determine the most appropriate areas to be considered in analyses of these phenomena. Our main statistical source is the Register of Manufacturing Establishments of Catalonia (REIC), which has plant-level microdata on the locations of new manufacturing plants. Keywords: agglomeration economies, industrial location, human capital, count-data models, spatial econometrics.

The determinants of YIc's R&D activity

This paper examines the determinants of young innovative companies’ (YICs) R&D activities taking into account the autoregressive nature of innovation. Using a large longitudinal dataset comprising Spanish manufacturing firms over the period 1990-2008, we find that previous R&D experience is a fundamental determinant for mature and young firms, albeit to a smaller extent in the case of the YICs, suggesting that their innovation behaviour is less persistent and more erratic. Moreover, our results suggest that firm and market characteristics play a distinct role in boosting the innovation activity of firms of different age. In particular, while market concentration and the degree of product diversification are found to be important in boosting R&D activities in the sub-sample of mature firms only, YICs’ spending on R&D appears to be more sensitive to demand-pull variables, suggesting the presence of credit constraints. These results have been obtained using a recently proposed dynamic type-2 tobit estimator, which accounts for individual effects and efficiently handles the initial conditions problem.

Staffing strategies in SME's: determinants of external recruitment and internal promotion

The purpose of this paper is to examine the determinants of use internal or external labour market to fill a firm vacancy in SME’s taking into account the differences existing among blue and white collar jobs. Following different theories we can identify three main reasons for use internal candidates rather than external ones‐ firm specific knowledge, adverse selection problems and motivation‐. However, there are others factors that might affect this choice but the last theories don’t take into account. In this paper we try to shed some light on what are these other factors that may affect firm decision to use internal or external labour market. Particularly we analyses the relationship among new technologies, innovation activity and firm location on the staffing strategy. The results shows difference behaviour on the decision to fill a vacancy using internal or external labour markets between manufacturing and service firms, and this decision depends not only on firm internal characteristics, like technological complexity or innovation activity, but also on firm location. The results also support the hypothesis of ports of entry especially in the manufacturing sector.

Internal and External Determinants of Radical and incremental Innovation in SMEs: the case of Catalonia

There is a major concern in economic literature about innovation, which is the interaction between internal and external factors.. In this paper those activities are hypothesized as being determined by some territorial characteristics like labour skills, technological infrastructure, educational facilities, agglomeration economies and industrial structure. This assumption allows understanding why those innovative activities are not spread across space and are located into specific areas. We use a detailed survey containing microdata for 497 SMEs located in Catalonia.