The dynamics of spending and absorption of aid : panel data analysis

In September 1999, the International Monetary Fund (IMF) established the Poverty Reduction and Growth Facility (PRGF) to make the reduction of poverty and the enhancement of economic growth the fundamental objectives of lending operations in its poorest member countries. This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use of aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. The paper shows that PRGF-supported programs permit countries to utilize all increases in aid within a few years, showing smoothed use of aid inflows over time. Our results reveal that spending is higher than absorption in both the long-run and short-run use of aid, which is a robust finding of the study. Furthermore, the paper demonstrates that the long-run spending exceeds the injected increase of aid inflows in the economy. In addition, the paper finds that the presence of a PRGF-supported program does not influence the actual absorption or spending of aid.

Determinants of government consumption expenditure in developing countries : a panel data analysis

The paper focuses on the recent pattern of government consumption expenditure in developing countries and estimates the determinants which have influenced government expenditure. Using a panel data set for 111 developing countries from 1984 to 2004, this study finds evidence that political and institutional variables as well as governance variables significantly influence government expenditure. Among other results, the paper finds new evidence of Wagner's law which states that peoples' demand for service and willingness to pay is income-elastic hence the expansion of public economy is influenced by the greater economic affluence of a nation (Cameron1978). Corruption is found to be influential in explaining the public expenditure of developing countries. On the contrary, size of the economy and fractionalization are found to have significant negative association with government expenditure. In addition, the study finds evidence that public expenditure significantly shrinks under military dictatorship compared with other form of governance.

Explaining light vehicle demand evolution in interurban toll roads: a dynamic panel data analysis in Spain

Tolls have increasingly become a common mechanism to fund road projects in recent decades. Therefore, improving knowledge of demand behavior constitutes a key aspect for stakeholders dealing with the management of toll roads. However, the literature concerning demand elasticity estimates for interurban toll roads is still limited due to their relatively scarce number in the international context. Furthermore, existing research has left some aspects to be investigated, among others, the choice of GDP as the most common socioeconomic variable to explain traffic growth over time. This paper intends to determine the variables that better explain the evolution of light vehicle demand in toll roads throughout the years. To that end, we establish a dynamic panel data methodology aimed at identifying the key socioeconomic variables explaining changes in light vehicle demand over time. The results show that, despite some usefulness, GDP does not constitute the most appropriate explanatory variable, while other parameters such as employment or GDP per capita lead to more stable and consistent results. The methodology is applied to Spanish toll roads for the 1990?2011 period, which constitutes a very interesting case on variations in toll road use, as road demand has experienced a significant decrease since the beginning of the economic crisis in 2008.

Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions. Factor Markets Working Paper No. 28, July 2012

This paper deals with the determinants of labour out-migration from agriculture across 149 EU regions over the 1990–2008 period. The central aim is to shed light on the role played by payments from the common agricultural policy (CAP) on this important adjustment process. Using static and dynamic panel data estimators, we show that standard neoclassical drivers, like relative income and the relative labour share, represent significant determinants of the intersectoral migration of agricultural labour. Overall, CAP payments contributed significantly to job creation in agriculture, although the magnitude of the economic effect was rather moderate. We also find that pillar I subsidies exerted an effect approximately two times greater than that of pillar II payments.

Farmland prices, structural breaks and panel data

Previous time series evidence has indicated that farmland prices and cash rents are not cointegrated, a finding at odds with the present value model of farmland prices. We argue that this failure to find cointegration may be due to low power of tests and to the presence of structural change representing a shifting risk premium on farmland investments. To accommodate this possibility, we use panel unit root and cointegration methods that are more powerful than conventional time series methods and allow for breaks in the cointegration relationship. Our results, based on a large panel covering 31 US states between 1960 and 2000, suggest that the present value model of farmland prices cannot be rejected. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved.

An analysis of the relationship between wages in the public and private sector in colombia : a panel data approach

This document examines the time-series properties of the wage differentials that arise between the public and private sector in Colombia during the sample period 1984 to 2005. We Find conflicting results in unit-root and stationary tests when looking at wage differentials at an aggregate level (such as for men, women or both). However, when we analyse wage differentials at higher levels of disaggregation, treat them jointly as a panel of data, and allow for the presence of potential cross section dependence, there is more supportive evidence for the view that wage differentials are stationary. This implies that although wage differentials do exist, they have not been consistently increasing (or decreasing) over time.

Does upward social mobility increase life satisfaction? A longitudinal analysis using British and Swiss panel data

A main assumption of social production function theory is that status is a major determinant of subjective well-being (SWB). From the perspective of the dissociative hypothesis, however, upward social mobility may be linked to identity problems, distress, and reduced levels of SWB because upwardly mobile people lose their ties to their class of origin. In this paper, we examine whether or not one of these arguments holds. We employ the United Kingdom and Switzerland as case studies because both are linked to distinct notions regarding social inequality and upward mobility. Longitudinal multilevel analyses based on panel data (UK: BHPS, Switzerland: SHP) allow us to reconstruct individual trajectories of life satisfaction (as a cognitive component of SWB) along with events of intragenerational and intergenerational upward mobility—taking into account previous levels of life satisfaction, dynamic class membership, and well-studied determinants of SWB. Our results show some evidence for effects of social class and social mobility on well-being in the UK sample, while there are no such effects in the Swiss sample. The UK findings support the idea of dissociative effects in terms of a negative effect of intergenerational upward mobility on SWB.

Economies of Scale and Cost Efficiencies: A Panel-Data Stochastic-Frontier Analysis of Real Estate Investment Trusts

This paper extends the existing research on real estate investment trust (REIT) operating efficiencies. We estimate a stochastic-frontier panel-data model specifying a translog cost function, covering 1995 to 2003. The results disagree with previous research in that we find little evidence of scale economies and some evidence of scale diseconomies. Moreover, we also generally find smaller inefficiencies than those shown by other REIT studies. Contrary to previous research, the results also show that self-management of a REIT associates with more inefficiency when we measure output with assets. When we use revenue to measure output, selfmanagement associates with less inefficiency. Also contrary with previous research, higher leverage associates with more efficiency. The results further suggest that inefficiency increases over time in three of our four specifications.

How has financial deepening affected poverty reduction in India? : empirical analysis using state-level panel data

This paper examines empirically whether financial deepening has contributed to poverty reduction in India. Using unbalanced panel data for 28 states and union territories between 1973 and 2004, we estimate models in which the poverty ratio is explained by financial deepening, controlling for international openness, inflation rate, and economic growth. From the dynamic generalised method of moments (GMM) estimation, we find that financial deepening and economic growth alleviate poverty, while international openness and the inflation rate have the opposite effect. These results are robust to changes in the poverty ratios in rural areas, urban areas, and the whole economy.

Inequality for Wage Earners and Self-Employed: Evidence from Panel Data

Published as an article in: Oxford Bulletin of Economics and Statistics, 2009, vol. 71, issue 4, pages 491-518.

Knowledge stocks, knowledge flows and innovation: Evidence from matched patents and innovation panel data

Successful innovation depends on knowledge – technological, strategic and market related. In this paper we explore the role and interaction of firms’ existing knowledge stocks and current knowledge flows in shaping innovation success. The paper contributes to our understanding of the determinants of firms’ innovation outputs and provides new information on the relationship between knowledge stocks, as measured by patents, and innovation output indicators. Our analysis uses innovation panel data relating to plants’ internal knowledge creation, external knowledge search and innovation outputs. Firm-level patent data is matched with this plant-level innovation panel data to provide a measure of firms’ knowledge stock. Two substantive conclusions follow. First, existing knowledge stocks have weak negative rather than positive impacts on firms’ innovation outputs, reflecting potential core-rigidities or negative path dependencies rather than the accumulation of competitive advantages. Second, knowledge flows derived from internal investment and external search dominate the effect of existing knowledge stocks on innovation performance. Both results emphasize the importance of firms’ knowledge search strategies. Our results also re-emphasize the potential issues which arise when using patents as a measure of innovation.

Bootstrap for panel data models with an application to the evaluation of public policies

Le but de cette thèse est d étendre la théorie du bootstrap aux modèles de données de panel. Les données de panel s obtiennent en observant plusieurs unités statistiques sur plusieurs périodes de temps. Leur double dimension individuelle et temporelle permet de contrôler l 'hétérogénéité non observable entre individus et entre les périodes de temps et donc de faire des études plus riches que les séries chronologiques ou les données en coupe instantanée. L 'avantage du bootstrap est de permettre d obtenir une inférence plus précise que celle avec la théorie asymptotique classique ou une inférence impossible en cas de paramètre de nuisance. La méthode consiste à tirer des échantillons aléatoires qui ressemblent le plus possible à l échantillon d analyse. L 'objet statitstique d intérêt est estimé sur chacun de ses échantillons aléatoires et on utilise l ensemble des valeurs estimées pour faire de l inférence. Il existe dans la littérature certaines application du bootstrap aux données de panels sans justi cation théorique rigoureuse ou sous de fortes hypothèses. Cette thèse propose une méthode de bootstrap plus appropriée aux données de panels. Les trois chapitres analysent sa validité et son application. Le premier chapitre postule un modèle simple avec un seul paramètre et s 'attaque aux propriétés théoriques de l estimateur de la moyenne. Nous montrons que le double rééchantillonnage que nous proposons et qui tient compte à la fois de la dimension individuelle et la dimension temporelle est valide avec ces modèles. Le rééchantillonnage seulement dans la dimension individuelle n est pas valide en présence d hétérogénéité temporelle. Le ré-échantillonnage dans la dimension temporelle n est pas valide en présence d'hétérogénéité individuelle. Le deuxième chapitre étend le précédent au modèle panel de régression. linéaire. Trois types de régresseurs sont considérés : les caractéristiques individuelles, les caractéristiques temporelles et les régresseurs qui évoluent dans le temps et par individu. En utilisant un modèle à erreurs composées doubles, l'estimateur des moindres carrés ordinaires et la méthode de bootstrap des résidus, on montre que le rééchantillonnage dans la seule dimension individuelle est valide pour l'inférence sur les coe¢ cients associés aux régresseurs qui changent uniquement par individu. Le rééchantillonnage dans la dimen- sion temporelle est valide seulement pour le sous vecteur des paramètres associés aux régresseurs qui évoluent uniquement dans le temps. Le double rééchantillonnage est quand à lui est valide pour faire de l inférence pour tout le vecteur des paramètres. Le troisième chapitre re-examine l exercice de l estimateur de différence en di¤érence de Bertrand, Duflo et Mullainathan (2004). Cet estimateur est couramment utilisé dans la littérature pour évaluer l impact de certaines poli- tiques publiques. L exercice empirique utilise des données de panel provenant du Current Population Survey sur le salaire des femmes dans les 50 états des Etats-Unis d Amérique de 1979 à 1999. Des variables de pseudo-interventions publiques au niveau des états sont générées et on s attend à ce que les tests arrivent à la conclusion qu il n y a pas d e¤et de ces politiques placebos sur le salaire des femmes. Bertrand, Du o et Mullainathan (2004) montre que la non-prise en compte de l hétérogénéité et de la dépendance temporelle entraîne d importantes distorsions de niveau de test lorsqu'on évalue l'impact de politiques publiques en utilisant des données de panel. Une des solutions préconisées est d utiliser la méthode de bootstrap. La méthode de double ré-échantillonnage développée dans cette thèse permet de corriger le problème de niveau de test et donc d'évaluer correctement l'impact des politiques publiques.