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We analyse the energy flexibility and technological change in the pulp and paper industry by applying a multioutput production function. The pulp and paper industry mostly consists of heterogeneous firms. They produce a wide range of different goods with different technologies. We take the heterogeneity into consideration in two ways. First, we disaggregate the industry into three sub-sectors according to their products. Second, in each sub-sector our model accounts for the heterogeneity between firms. We apply a specific flexible cost function, which makes sure that the curvature conditions hold. In our model, the energy flexibility occurs in different ways. On one hand producers may invest in technologies, which make them able to switch between different energy sources. On the other hand they can change their output mix towards less energy intensive products when the energy prices increase. Keywords: Multiproduct symmetric generalised McFadden cost function, energy flexibility, elasticity, technological change, curvature conditions, Pulp and paper.

The aim in the paper is to show how the presence of spatial dependence affects the often-adopted Windmeijer (J Econom 126:25–51, 2005) finite sample correction (For example it is an option facilitating robust estimation in the software package Stata, which is used by many applied econometricians and data analysts.), which corrects the downward bias in estimated parameter standard errors. Windmeijer (2005) explains why, with numerous instruments, the estimated asymptotic standard errors of the efficient, two-step, GMM estimator are downward biased in small samples. GMM estimation is based on an estimated optimal weight matrix, which is the inverse of the covariance of the sample moments, and the bias results from the weight matrix being evaluated at estimated, rather than the true values of parameters. Hwang et al. (J Econom 229(2):276–298, 2022) provide a correction to the Windmeijer (2005) finite sample correction to allow for over-identification bias. The novel contribution of the current paper is to show how the Windmeijer (2005) correction can be modified given spatial dependence in the error term of a model with moments conditions that are linear in parameters estimated by GMM, leading to corrected standard errors and therefore more accurate inference. Monte Carlo simulations are used to demonstrate the effect of the modification and two examples using real data shows how inference may be affected by ignoring the effect of spatial error dependence.

In this paper, the effect of corruption on foreign direct investment (FDI) flows is analyzed. The literature is thus far divided regarding the effects of corruption: One hypothesis argues that corruption greases the wheels of government and is therefore beneficial while the other hypothesis argues that it sands the wheels of government leading to suboptimal results in an economy. For the empirical analysis, a dataset consisting of bilateral FDI data from the OECD and the control of corruption measure from the World Governance Indicators of the World Bank is compiled. To further analyze the effects of corruption the Panama Papers revelation is used as a corruption increasing event and the implementation into law of the OECD Anti-Bribery Convention is used as a corruption decreasing event. Finally, the difference between corruption levels in the target and the origin country, will be examined. Then, a gravity model with dyadic and time-fixed effects is employed to analyze the data. Findings are ambiguous in that corruption is positively correlated with FDI inflows in the target country and negatively correlated with FDI inflows in the origin country. The Panama Papers variable shows strong evidence, that the release of the Panama Papers resulted in a drop in FDI flows. Therefore, it seems that corruption has complex country specific effects and that target and source countries have to adopt varying policies with regards to corruption. The general effect of corruption harms FDI flows, as shown by the Panama Papers revelation.

Starting with a reduced form derived from standard urban economics theory, this paper estimates the possible job-shortfall across UK and EU regions using a time-space dynamic panel data model with a spatial moving average random effects structure of the disturbances. The paper provides a logical rational for the presence of spatial and temporal dependencies involving the endogenous variable, leading to estimates based on a state-of-the-art dynamic spatial generalized moments estimator proposed by Baltagi et al. (Reg Sci Urban Econ, 2018. https://doi.org/10.1016/j.regsciurbeco.2018.04.013). Given reliable interregional trade estimates, the simulations are based on a linear predictor which utilizes different regional interdependency matrices according to assumptions about interregional trade post-Brexit. The results indicate that heightened barriers to trade will evidently cause job-shortfalls both in the UK and across the EU, but it is also shown that there is a considerable amount of asymmetry in the outcomes across regions and sectors.

Existing literature recognizes the possible role of trade policy and firms’ exposure to international trade as determinants of productivity. A strand of the literature sheds light on the effects of trade policy changes on firm-level productivity. Another strand studies the relationship between firms’ trade status (exporting production or importing intermediates, but usually not both simultaneously) and firm-level TFP dynamics. However, the analyses that integrate both strands are scarce. This paper aims to disentangle the impact of input and output tariffs on firms’ productivity. Further, it analyses whether the impact of changes in tariffs is conditioned by the trade status of the firm (exporting and/or importing). At difference to most previous papers, we carry out our analysis for a large developing country in a period of slow trade liberalization. Thus, in the empirical part, we use data from firms belonging to Brazilian industrial sectors (manufacturing and mining) during 2000–2008. After estimating total factor productivity (TFP) at the firm level using updated methodologies, we estimate both the impact of trade policy and firms’ trade status on TFP dynamics. Our results suggest that trade liberalization (through reductions in input or output tariffs) increases TFP, being the effect associated to a reduction in input tariffs greater. Furthermore, the impact of trade policy on TFP spreads among all firms, which could be consistent with the existence of spillovers from trading firms to non-trading firms or with the notion that trade liberalization exerts competitive pressure on all firms, regardless of their initial exposure to international trade. Finally, we also find evidence of a positive effect of both the import and export statuses on TFP.

Was the European Central Bank able to assure the relaunch of the European project after the weakening of the post-crisis period? To answer this question, this paper presents an empirical analysis connecting citizen trust in the European Union with a variable intended to be a measure of the monetary policy strategy of the European Central Bank, namely, the interest rate on government bonds extracted from the 1-year maturity yield curve. The dynamic panel technique, applied to nineteen Eurozone countries for the time span of 2004–2018, estimates the presence of a long-run common relationship between the variables despite allowing different short-run adjustment mechanisms. Results are revealed to be not univocal: the easy monetary policy strategy is associated for the whole period with a decline of trust, and therefore, despite its impressiveness, it was not sufficient to relaunch the European Union project. However, when considering the change in strategy of the post-2013 period, it seemed to have contributed to a slight inversion of the decline of trust. These results highlight the importance of non-conventional measures and call for further support from coordinated policy action as a response to the negative shock deriving from the COVID-19 pandemic.

In this paper we estimate health plan price elasticities and financial switching gains for consumers over a 20-year period in which managed competition was introduced in the Dutch health insurance market. The period is characterized by a major health insurance reform in 2006 to provide health insurers with more incentives and tools to compete, and to provide consumers with a more differentiated choice of products. Prior to the reform, in the period 1995–2005, we find a low number of switchers, between 2 and 4% a year, modest average total switching gains of 2 million euros per year and short-term health plan price elasticities ranging from −0.1 to −0.4. The major reform in 2006 resulted in an all-time high switching rate of 18%, total switching gains of 130 million euros, and a high short-term price elasticity of −5.7. During 2007–2015 switching rates returned to lower levels, between 4 and 8% per year, with total switching gains in the order of 40 million euros per year on average. Total switching gains could have been 10 times higher if all consumers had switched to one of the cheapest plans. We find short-term price elasticities ranging between −0.9 and −2.2. Our estimations suggest substantial consumer inertia throughout the entire period, as we find degrees of choice persistence ranging from about 0.8 to 0.9.

A number of novelties have emerged in the study of the discretionary fiscal policy within the Euro area during the last decade. Among the others, the availability of up-to-date information on fiscal indicators for the years following the Great Recession, the introduction of cutting-edge econometric methods, and a renewed interest about the sustainability of fiscal policy and public debt. The aim of this paper is to address the challenges posed by the estimation of the discretionary fiscal reaction function for the Euro area. We exploit recently introduced testing and estimation strategies for heterogeneous dynamic panels with cross-sectional dependence and propose a new parsimonious approach. Using real-time data over the period 1996-2016, we investigate whether the fiscal policy reaction function is still a benchmark after the Great Recession. We find evidence of strong cross-sectional dependence in the panel, and clear support to a valid cointegration relationship among the main determinants of the function. Newly added covariates, such interest rate spreads, come out to play a relevant role in explaining discretionary actions.

Magnetic resonance imaging (MRI) is a popular yet cost-intensive diagnostic measure whose strengths compared to other medical imaging technologies have led to increased application. But the benefits of aggressive testing are doubtful. The comparatively high MRI usage in Austria in combination with substantial regional variation has hence become a concern for its policy makers. We use a set of routine healthcare data on outpatient MRI service consumption of Austrian patients between Q3-2015 and Q2-2016 on the district level to investigate the extent of medical practice variation in a two-step statistical analysis combining multivariate regression models and Blinder–Oaxaca decomposition. District-level MRI exam rates per 1.000 inhabitants range from 52.38 to 128.69. Controlling for a set of regional characteristics in a multivariate regression model, we identify payer autonomy in regulating access to MRI scans as the biggest contributor to regional variation. Nevertheless, the statistical decomposition highlights that more than 70% of the regional variation remains unexplained by differences between the observable district characteristics. In the absence of epidemiological explanations, the substantial regional medical practice variation calls the efficiency of resource deployment into question.

We analyze the impact of government size, measured by total spending per capita, on tax evasion at the provincial level in Italy over the period 2001–2015. In order to solve endogeneity issues we rely on a system GMM and find that public expenditure negatively affects tax evasion, as taxpayers perceive the government is efficiently spending resources coming from the tax levy. Results are confirmed when we (1) consider expenditures related to long-term investments, namely capital spending per capita, and (2) directly test the impact of government efficiency on tax evasion. In addition, we show that the impact of public spending is heterogeneous across geographical areas: an increase in public expenditure leads to a downward shift in tax evasion only in the northern part of Italy, characterized by a relatively larger initial level of public goods provision.

Although cost-effectiveness analysis has a long tradition of supporting healthcare decision-making in Sweden, there are no clear criteria for when an intervention is considered too expensive. In particular, the opportunity cost of healthcare resource use in terms of health forgone has not been investigated empirically. In this work, we therefore seek to estimate the marginal cost of a life year in Sweden’s public healthcare sector using time series and panel data at the national and regional levels, respectively. We find that estimation using time series is unfeasible due to reversed causality. However, through panel instrumental variable estimation we are able to derive a marginal cost per life year of about SEK 370,000 (EUR 39,000). Although this estimate is in line with emerging evidence from other healthcare systems, it is associated with uncertainty, primarily due to the inherent difficulties of causal inference using aggregate observational data. The implications of these difficulties and related methodological issues are discussed. Electronic supplementary material The online version of this article (10.1007/s10198-019-01039-0) contains supplementary material, which is available to authorized users.

This paper focuses on the estimation of fiscal response functions for advanced economies and on the performance of alternative specifications of the Generalized Method of Moments (GMM) estimator for the rule’s parameters. We first estimate the parameters on simulated data through Monte Carlo experiments; we then run an empirical test on data for the European Monetary Union (EMU). We estimate both the Cyclicallyadjusted primary balance (CAPB) and the Primary balance (PB) models, and check the robustness of the estimates to different specifications of the GMM estimator and to alternative settings of the parameters. We also compare alternative instrument reduction strategies in a context where several endogenous variables enter the model. We find that the system GMM estimator is the best-performing in this framework and the high instrument count comes out not to be problematic. We also make the algebraic links between the parameters in the CAPB and in the PB models explicit, suggesting an effective strategy to estimate the discretionary fiscal response from the coefficients of the PB model. In the empirical application on a dataset for EMU Countries, we find that the evidence of a-cyclicality of discretionary policies is robust to all the specifications of the GMM estimator.

In this paper we study the drivers of change in individuals’ discount rates. Our panel dataset allows us to jointly consider socio-demographics, financial status and literacy, as well as job characteristics among the possible determinants. Our results suggest that individual time-preferences are not stable over time, especially among individuals who hold debts. Labour market variables do not play any direct role. A large part of the variation, however, is not explained by none these drivers. This supports the view that discount rates are related to an underlying unobservable individual trait.