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42. Does intangible capital affect economic growth?
- Author:
- Felix Roth and Anna-Elisabeth Thum
- Publication Date:
- 09-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Using new international comparable data on intangible capital investment by business within a panel analysis from 1995-2005 in an EU-15 country sample, we detect a positive and significant relationship between intangible capital investment by business and labour productivity growth. This relationship is cross-sectional in nature and proves to be robust to a range of alterations. Our empirical analysis confirms previous findings that the inclusion of business intangible capital investment into the asset boundary of the national accounting framework increases the rate of change of output per worker more rapidly. In addition, intangible capital is able to explain a significant portion of the unexplained international variance in labour productivity growth and when incorporating business intangibles, capital deepening becomes an even more significant source of growth. The relationship is slightly stronger in the time period 1995-2000 and seems to be driven by the coordinated countries within the EU-15.
- Topic:
- Economics, International Trade and Finance, Regional Cooperation, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
43. Do the European Union's bilateral investment treaties matter?
- Author:
- Selen Sarisoy Guerin
- Publication Date:
- 07-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Several policy-relevant issues regarding the EU's bilateral investment treaties (BITS) are addressed in this paper. First and foremost, we explore the question of whether EU's BITs have a significantly positive impact on outflows or not. Second, we ask the question which member states and which BIT partners have had a significant experience after the implementation of the BIT. In our sample we find that both OECD BITs and EU BITs have a statistically significant and positive impact on FDI outflows. This result is robust to the inclusion of variables such as privatisation proceeds that control for the level of economic reform, the level of trade linkages, the level of democratic freedom and a measure of risk of expropriation among other standard controls. We control for endogeneity in our estimations by using the fixed-effects estimator as our preferred estimator on a large panel dataset. We also test the strict exogeneity of our results by using a method suggested by Baier and Bergstrand (2007) and we find no feedback effect in our sample.
- Topic:
- Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
44. The financial crisis and citizen trust in the European Central Bank
- Author:
- Daniel Gros and Felix Roth
- Publication Date:
- 07-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Trust in the ECB, as measured by the standard Eurobarometer (and other) surveys has fallen to an unprecedented low – especially in the larger euro area countries. The authors find that up to the start of the recession in 2008, trust in the ECB was little affected by business cycle variables such as growth and inflation. This changed radically with the recession, with trust in the ECB becoming correlated quite closely with growth. However, even the recovery of growth in 2009 was not sufficient to restore trust in the ECB to previous levels. This finding implies that European citizens seem to have placed a heavy share of the blame on the European Central Bank for the real economic downturn caused by the financial crisis.
- Topic:
- Economics, International Trade and Finance, and Monetary Policy
- Political Geography:
- Europe
45. Restoring Investor Confidence in European Capital Markets
- Author:
- Diego Valiante
- Publication Date:
- 02-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Investors have a longer memory than the sell‐side of the market. To regain their trust, intensive work needs to be done in the coming years. The new European Commissioner of the Internal Market, Michel Barnier, will play a pivotal role here. In the area of capital markets, he will need the support of a determined European Parliament, a strong commitment from the Council and Member States, as well as active contributions from the CESR/ESMA , other Level 3 Committees/Authorities and national supervisors. We believe that participants in capital markets share the same goal: to make them as efficient and effective as possible. The ability to collect savings and allocate them to investment, and to allow all participants to defray risk, is at the heart of any successful modern economy. This requires effective regulation that not only mandates common standards, but also promotes accountability, responsibility and transparency, while at the same time encouraging innovation. Effective regulation must not impose undue costs, if markets are to remain efficient and effective. However, we should be conscious that the crisis has been so deep that there is a collective need to go back to the basic principles of financial regulation and supervision.
- Topic:
- Economics, International Trade and Finance, and Financial Crisis
- Political Geography:
- Europe
46. Information Sharing and Cross-Border Entry in European Banking
- Author:
- Caterina Giannetti, Nicola Jentzsch, and Giancarlo Spagnolo
- Publication Date:
- 02-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Asymmetries can severely limit the cross-border border expansion of banks, if entering banks can only obtain incomplete information about potential new clients. Such asymmetries are reduced by credit registers, which distribute financial data on bank clients. Asymmetrically distributed information and adversely selected pools of borrowers constitute severe barriers for foreign banks when they enter new markets. In many instances, these problems force banks to either form 'alliances with incumbents' or simply enter through mergers and acquisitions (M). Yet such entry modes do not automatically lead to intensified competition as they may leave the number of competitors unchanged. Thus, institutions that reduce information asymmetries in credit markets (thereby encouraging entry through branches) may be very important if the objective is strengthening competition in addition to market integration. Recently, these institutions – credit registers – have received greater attention among academics and policy-makers in Europe, although there is still a remarkable lack of understanding of their empirical impact on banking.
- Topic:
- Economics, International Trade and Finance, Markets, and Monetary Policy
- Political Geography:
- Europe
47. The Taxation of Multinational Enterprises in the European Union
- Author:
- Stefano Micossi and Paola Parascandolo
- Publication Date:
- 02-2010
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- As a rule, multinational enterprises (MNEs) are taxed separately by the countries in which they operate on the basis of the income produced in each jurisdiction ('source' taxation). To this end, they must keep separate accounts for business units in each country (“separate accounting”, SA) ascribing each item of expenditure and income to each business unit on the basis – by universally accepted convention – of 'arm's-length' pricing (ALP), that is, of comparable or estimated prices for similar market transactions between unrelated companies.
- Topic:
- Economics, Globalization, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
48. Lessons from the Asian Monetary Fund for the European Monetary Fund
- Author:
- Yonghyup Oh
- Publication Date:
- 04-2010
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- The euro area is facing a challenge with Greece in danger of falling into sovereign default and some of its other members, the so-called 'GIPSY' nations, finding themselves in serious financial distress. Creation of a European Monetary Fund to deal more effectively with this type of situation is gaining support. This paper draws lessons from the Asian experience that might be applied to the current European development.
- Topic:
- Debt, Economics, International Trade and Finance, and Monetary Policy
- Political Geography:
- Europe
49. Europe 2020 and the Financial System: Smaller is beautiful
- Author:
- Karel Lannoo
- Publication Date:
- 07-2010
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- Meeting Europe's 2020 objectives of smart, sustainable and inclusive growth is even more of a challenge for the financial sector than for the EU as a whole. Smart, sustainable and inclusive growth is just the opposite of what the financial sector stood for, and how it continues to be perceived by the public. The huge regulatory agenda that is on the table should tame the financial sector, but whether it will help it to meet the Europe 2020 objectives is an open question (see European Commission, 2010a).
- Topic:
- International Trade and Finance, Markets, Regional Cooperation, and Financial Crisis
- Political Geography:
- Europe
50. Beyond Flexibility and Security: A composite indicator of flexicurity
- Author:
- Ilaria Maselli
- Publication Date:
- 05-2010
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- 'Flexicurity' might be defined as a mix of flexible contractual arrangements, income support measures, active labour market policies and lifelong learning. The successful shift in approach of the Danish and Dutch labour markets from passive to active labour market policies, and to flexicurity, has attracted considerable attention among academics and policy-makers. The objective of this Working Document is to contribute to the debate with the creation of a composite indicator to measure flexicurity, based on the definition provided in the European Commission's Communication on Flexicurity (COM(2007)359). Our indicator confirms that preferences in the balance of flexibility and security are highly heterogeneous among countries; a finding that supports the 'pathway' approach as proposed by the European Commission. A second important conclusion is that the idea of flexibility being in favour of employers and security being in favour of employees needs to be overcome. Flexicurity is 'both for both', although it does not apply uniformly to all age groups but is two and three times greater for older and younger workers respectively.
- Topic:
- Economics, International Trade and Finance, and Labor Issues
- Political Geography:
- Europe