The triggers of competitiveness: the EFIGE cross-country report. Bruegel Blueprint 17, 17 July 2012

There is a pressing need for Europe to grow out of the crisis, meaning that Europe needs to become more competitive, enabling it to capture growth currently taking place mainly in emerging markets. But what are the triggers of competitiveness? The EFIGE project, led by Bruegel, takes a fresh look by inquiring into the determinants of firm-level international performance – focusing on external competitiveness. In the competitiveness debate, it is crucial to understand not only the macroeconomic challenge, but also to find the right micro-level triggers that will generate growth and exports. The authors identify firm-level total factor productivity as a major determinant of growth and exports. Human capital, research, equity finance and performance based incentives for employees also play their parts. Moreover, size matters and large firms typically are much better exporters than their smaller counterparts. This report builds on previous EFIGE research and studies in depth firm performance in seven countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom) to identify the triggers of competitiveness.

A Contribution to The Study of Global Competition for Talent: the determinants of student mobility and its consequences for the internationalization of the labor market. Bruges European Economic Policy (BEEP) Briefing 27/2013

In a globalized economy the skills of the workforce are a key determinant of the competitiveness of a country. One of the goals of Higher Education is precisely to develop the students’ skills in order to allow them to match the increasing demand for highly qualified workers while it is simultaneously the best period of life to acquire multicultural skills. For this reason, the European Union has fostered student mobility through several programs: the Erasmus program and the Bologna process are the best known among them. Although student mobility is a growing phenomenon, publications and research on the subject remain relatively scarce. This paper aims to contribute to that literature through an empirical analysis which exploits a questionnaire submitted to university alumni and focuses on two research questions: what drives studies abroad and what drives expatriation of graduates. Our empirical analysis first shows that exposure to international experiences before entering tertiary education and family background are the main factors influencing student mobility. A second conclusion is that studying abroad increases the international mobility on the labor market. Both confirm previous studies. Moreover, by making a distinction between participating in the Erasmus program and in other exchange programs or internships abroad, we found that the Erasmus program and the other programs or internships have an equivalent influence on the international mobility on the labor market: they increase by 9 to 12.5 percentage points a student’s chance to be mobile on the international labor market. This result shows the legitimacy of the Erasmus program, but it also reveals the important impact of other forms of experience abroad. It provides support for policy makers to encourage mobility programs, in order to foster integration of the European labor market.

Poland and Greece - two contrasting EU enlargement experiences. ZEI Discussion Paper C213, 2012

The aim of this contribution is a comparative analysis of the challenges Poland and Greece (and more broadly – CEE-10 and GIPS countries) had to face in the past as latecomers to the European Union and are facing now, in the aftermath of the world financial and economic crisis of 2008-09. The main underlying message conveyed in this text is two-fold. Firstly, the author is going to argue that the breadth and complexity of the challenges Poland and other CEE-10 countries had to face while entering the road of systemic transformation was by far greater compared to past and in particular – current problems of Greece (and the remaining GIPS countries) in the aftermath of the global financial and economic crisis of 2008-09. Secondly, a resilience of Poland and other CEE-10 economies, relative to Greece and other GIPS, to the recent crisis was due to a comparatively higher level of institutional development of the former group at the time of their EU accession and at present. The ensuing discussion is organized as follows. Section 2 below provides comparative background information on the two reference groups. In Section 3 we discuss the most salient features of the design of the command economy and its legacy, as a key determinant of the initial conditions of systemic transformation. Next, in Section 4 we overview the basic indicators of growth performance and institutional reforms in CEE-10 countries between 1990 and 2011. Section 5 offers a picture of economic growth and real economic convergence in Greece and the remaining GIPS countries. In Section 6 we embark on comparative analysis of the institutional quality of Greece and Poland against a broader background of GIPS, CEE-10 and the remaining EU member countries. Section 7 concludes with a summary of major findings.

Regional Wage and Employment Responses to Market Potential in the EU. Bruges European Economic Research (BEER) Papers 3/November 2005

Recent theoretical work on economic geography emphasizes the interplay of transport costs and plant-level increasing returns. In these models, the spatial distribution of demand is a key determinant of economic outcomes. In one strand, it is argued that higher demand gives rise to a more than proportionate increase in production, a result known as the home market effect. Another strand emphasizes the effects of market sizes on factor prices. We highlight the theoretical connection between these two strands. Using data on 57 European regions, we show how wages and employment respond to differentials in what we call real market potential, a discounted sum of demands derived from the theory.

EU-US S&T Collaborations, Challenges and Opportunities for Development. Innovation Diplomacy, Special case in point: the Hellenic-American innovation bridge and its underlying dimensions. ACES Working Papers, October 2012

Developed and developing economies alike face increased resource scarcity and competitive rivalry. Science and technology increasingly appear as a main source of competitive and sustainable advantage for nations are regions alike. However, the key determinant of their efficacy is the quality and quantity of entrepreneurship-enabled innovation that unlocks and captures the pecuniary benefits of science enterprise in the form of private, public or hybrid goods (for instance, bio-entrepreneur-millionaires, knowledge for the public good - ie: public health awareness, and new public-private research centers funded partly by bio-entrepreneur-millionaires and monies levied as taxes on bio-ventures).

Law and Foreign Direct Investment. IES WORKING PAPER 4/2011

In this paper we examine the effect of law on foreign direct investment outflows with a specific interest in the relationship between international investment law and domestic private property laws. Our results indicate that FDI investor is indifferent to host country property rights, hence shareholder protection by law is not a significant determinant of FDI outflows. We argue that FDI, in contrast with other types of capital flows, can effectively mitigate the agency problem through majority ownership and control, hence reduce exposure to ex-post expropriation by the affiliate. On the other hand, FDI investor remains exposed to risk of expropriation by the host government and is strongly sensitive to the enforcement of law in the host country. In contrast with recent literature we conclude that there are no causal relationship between bilateral investment treaties and FDI.

Institutions and Growth in Europe. CEPS Working Document No. 421, April 2016

This paper provides empirical evidence in support of the view that the quality of institutions is an important determinant of long-term growth of European countries. When also taking into account the initial level of GDP per capita and government debt, cross-country institutional differences can explain to a great extent the relative long-term GDP performance of European countries. It also shows that an initial government debt level above a threshold (e.g. 60-70%) coupled with institutional quality below the EU average tends to be associated with particularly poor long-term real growth performance. Interestingly, the detrimental effect of high debt levels on long-term growth seems cushioned by the presence of very sound institutions. This might be because good institutions help to alleviate the debt problem in various ways, e.g. by ensuring sufficient fiscal consolidation in the longer-run, allowing for better use of government expenditures and promoting sustainable growth, social fairness and more efficient tax administration. The quality of national institutions seems to enhance the long-term GDP performance across a large sample of countries, also including OECD countries outside Europe. The paper offers some evidence that, in the presence of good institutions, conditions for catching-up seem generally good also for euro-area and fixed exchange rate countries. Looking at sub-groupings, it seems that sound institutions may be particularly important for long-term growth in the countries where the exchange rate tool is no longer available (and where also sovereign debt is high), and less so in the countries with flexible exchange rate regimes. However, this result is preliminary and requires further research. The empirical findings on the importance of institutions are robust to various measures of output growth, different measures of institutional indicators, different sample sizes, different country groupings and to the inclusion of additional control variables. Overall, the results tend to support the call for structural reforms in general and reforms enhancing the efficiency of public administration and regulation, the rule of law and the fight against rent-seeking and corruption in particular.