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COVID-19 caused a major economic downturn, the like of which had not been seen since the Great Recession although the underlying causes of the two crises were very different; systemic risk versus a virus. Here we look at how flexible work practices, allied with adequate supports and lifelong learning opportunities, aided economic recovery following the earlier crisis in order to see if there are any lessons to be learnt for post-pandemic recovery. Overall, the results indicated that flexicurity provided a modest growth dividend during the Great Recession, typically no more than one percentage point. Of the individual components, the short-run results indicated that security along with life-long learning and part-time work proved the most beneficial, although flexible work practices also boosted growth, albeit to a lesser extent. For flexible labour markets, the long-run results indicated that the growth gains were highest in trusting economies with, or without, social partner engagement.

This paper investigates the sectoral impacts of FDI on growth in Egypt between 1990 and 2007 based upon a unique data set. It highlights the aggregation bias inherent in many empirical studies that focus solely on the economy-wide effects of foreign investment. Aggregate inflows of FDI are shown to be detrimental to the country’s economic growth performance, possibly as a result of the ‘crowding-out’ of more productive domestic investment. Some positive sector-specific effects however, are found for investment in Manufacturing & Petroleum, which also has beneficial spillovers into other sectors. FDI in the Finance & Retail and Telecommunications & Information Technology sectors are found to generate significantly negative growth effects while those in Services and Tourism are negative but generally insignificant. These findings suggest that ‘market-seeking’ FDI in certain sectors has conspicuous ‘crowding-out’ effects, possibly owing to insufficient domestic absorptive capacity. The results of this study further demonstrate the importance of potential sectoral heterogeneity of own sector and inter-sectoral economic growth effects of FDI. It therefore highlights the critical need for policy makers to take a more disaggregated sectoral-level evaluation of the benefits of foreign investment, particularly in developing economies such as Egypt.

This paper investigates the domestic productivity and spillover effects of foreign technology and embodied R&D on Egyptian manufacturing industries, 2006 to 2009. It also analyses the heterogeneous sectoral effects of technology transfer by focusing specifically on the productivity effects on highly internationalized and technology-intensive industries. These are expected to have greater absorptive capacity with respect to foreign technology and therefore larger productivity effects because of their greater exposure to foreign competition and greater technological capacity respectively. This study is the first to analyse the efficiency effects of foreign technology by classifying industries in this manner. It finds that foreign technology and embodied R&D have positive and significant industry-specific effects on domestic productivity and TFP in technology-intensive industries but that these are weaker in internationally oriented industries. The study suggests that only technological-intensive industries in Egypt have sufficient absorptive capacity to assimilate foreign technology effectively. The paper’s findings highlight the key role of foreign technology in domestic productivity growth, subject to the absorptive capacity of the domestic labour force, and the need for improved policies to promote the domestic benefits of technology transfer through the accumulation of local technological competences.

We examine the synchronisation of the European Union (EU) financial markets before and during the 2007 global financial crisis. We use an Asymmetric Dynamic Conditional Correlation (ADCC)-GARCH framework to control for the time-varying correlations and a Markov-Switching model to identify regime changes. Our sample considers 27 EU nations for the period 2000-2011. For each nation we formulate several characteristics of the crisis such as, synchronicity, duration and intensity measures. We find that the more recent EU members had a lagged entry to the crisis regime, were less adversely affected, show higher correlation between their stock markets and have their credit scores being revised more frequently relative to established EU members. We also find that higher levels of sovereign debt and lower levels of industrialisation positively impact crisis duration and intensity. Our results refute the notion of uniform integration of EU financial markets as evident from the highly non-synchronised observed crisis experience among the EU members. As such, one-size fits all policies are likely to be ineffective.

This study investigates the role of human capital, political development in determining the magnitude of the effects of FDI on growth for a panel of 61 transition and developing countries for the period 1989 to 2013. A baseline growth model incorporating these variables is tested and then extended to include FDI interaction effects with human capital (measured using secondary school enrolment data) and political development (based upon EIU Democracy Index scores). These growth interaction effects between FDI and human capital vary according to regime type. Political development in conjunction with FDI appears to suppress the effects of FDI on growth in authoritarian countries while enhancing them in hybrid democracies. For more democratic countries, domestic investment is a more important driver of growth. The effects of FDI on growth in the ten Transition economies included in the sample dataset are found to be insignificant. Although this result might seem to differ from a priori expectations, it is in line with the findings of most earlier studies which cover the period up until 2004. The paper also provides no strong evidence that a critical threshold of human capital is required to generate beneficial spillover growth effects from inflows of FDI. The paper provides new and more detailed insights into the effects of FDI on growth with particular respect to human capital and political regime covering a large number of transition and developing countries based upon an up to date dataset covering a twenty-five year period to 2013.

The economic crisis has exacted a heavy price on labor markets throughout the world and raised serious questions about the ability of the flexicurity policies to deal with the consequences. In this regard, the experience of Poland with its more flexible approach is notable. Shortly before the tumult erupted, the country witnessed a dramatic decline in its unemployment rate from one of the highest in the EU-27 to a figure below the average. However, this turnaround was apparently driven by amendments to the country’s Labour Code, which generated an enormous increase in temporary working. Using consecutive annual panels from the Labour Force Survey, a strong link between this development and the fall in unemployment is identified. A multinomial logit model reveals that the flows were most heavily concentrated among males, young workers of both sexes and the less well educated. There is also evidence that fixed-term work lured previously discouraged individuals back into the labor market. However, the requirement that Poland aligns its temporary employment legislation with that of the EU could conceivably lead to at least a partial reversal of fortune.

Poland's post‐communist economic performance has been generally good. However, for many years, its growth was jobless; it exhibited very high unemployment rates and made little progress towards the targets set for EU Member States and accession countries. Unexpectedly, in 2003, the country's labour market began to exhibit a new dynamism, with employment growing strongly and unemployment tumbling. This apparent improvement coincided with a liberalisation of its Labour Code. Unfortunately, the measures introduced to increase flexibility are at variance with the EU's Fixed‐term Work Directive and will likely need to be modified, which may conceivably reverse the recent developments that form the focus of this article.

Unemployment continues to bedevil Poland, albeit with striking sub-national differences, which this article seeks to explain using random effects error component two-stage estimation for the country's NUTS 4 (nomenclature des unites territoriales statistiques) level powiats. Given the economy's peculiar configuration under communism, with its large private agricultural sector, emphasis is placed on rural–urban differences. While less densely populated areas do suffer higher unemployment rates, the effect is moderated by hidden unemployment in farming. On the other hand, powiats that housed the ex-state farms suffer a negative long-term legacy. Other notable results include an evident positive impact of foreign capital on local labour market fortunes.

S The determinants of CEO compensation within the UK Building Society sector are investigated. Using an unbalanced panel data set for the period 1986–90, we find only weak support for the existence of a positive link between performance and CEO remuneration. In contrast we find age to be an important determinant of CEO pay increases. This finding reinforces the oft noted potential for inefficiencies in mutuals. Given that alternative market based control systems are absent, our results suggests that there is a lack of any mechanism to align owner and manager interests in the UK building societies.

Poland's entry into the EU and attendant commitment to the achievement of a range of ambitious labour market and social targets have served merely to re-emphasise the need for the rationalisation of its most conspicuous socialist paradox: a private agricultural sector that, on one count, employs over one-quarter of the country's workers. Multinomial estimation on a pool of annual panels, with a sample of over 24,000 individuals, confirms the overall impression of stagnation conveyed by the published statistics. Nevertheless, the findings provide important pointers for the thrust of future policy endeavours aimed at increasing the exit rate from farming. Comparative Economic Studies (2009) 51, 51–74. doi:10.1057/ces.2008.9

The European Union (EU) aspires to be the most competitive, full employment economy in the world and has set a number of ambitious targets to be met by 2010 in order that it can achieve this goal. At the same time, it is pursuing an enlargement policy that will witness the accession of an increasing number of less developed nations. This article explores some of the tensions that exist between these two goals as these are manifest in labour market indicators and finds the likelihood of meeting the deadline set for success remote

Favourable labour market outcomes are essential for economic and social cohesion within the newly enlarged European Union. However, Eurobarometer evidence indicates that many in the 10 incoming countries are not convinced that membership will deliver such a result. Also, there is no unambiguous theoretical framework that suggests otherwise. A more optimistic scenario can be obtained by reference to the experiences of earlier low-income Community entrants during their first years of membership, although long-term convergence has remained elusive.

The enduring size and semi-subsistence character of Poland's agricultural sector continue to be a cause of concern even as the country prepares to enter the EU later this year. Although underpinned by a variety of historical and social forces, the survival of such activity from World War II into the twenty-first century has been largely the result of extensive transfer payments. Reducing this fiscal burden, stimulating agricultural restructuring and promoting rural development in order to spread the benefits of transformation more widely might be expected to be high on both the EU and Polish policy agendas. However, efforts to date in this area, whether financed from domestic or international sources, have certainly not been successful and the aptness of the stimulus provided by the final terms of membership agreed in Copenhagen in December 2002 might be questioned. This article seeks to identify the key components of Poland's agricultural restructuring and rural development problem and to address the issues raised by the country's forthcoming accession to the European Union.

The European Employment Strategy (EES) is set to remain centre stage as the EU embraces ten new member states. The evidence regarding the prospects of the accession countries meeting the increasingly explicit targets that the EES has set for the years up to 2010 does not yield a favourable prognosis.

Since the early 1990s the Polish economy has, in the move towards a market economy, undergone substantial economic reforms which resulted initially in a severe recession and notably in widespread unemployment. In a country where women have traditionally played a major role in the workforce it is pertinent to ask how their role has been affected during the early years of transition to a market economy, what factors explain this, and what their employment prospects are likely to be in a free market economy. After sketching the key features of women's employment in Poland pre-transition the article then addresses these questions using data drawn mainly from the Labour Force Surveys of 1992 and 1994. It finds that women's labour market position has been changing and in 1994 could be said to be mixed: while on the one hand it seems to be deteriorating (rising rates of inactivity and unemployment, the feminization of part-time work), on the other women seem to have been relatively protected from the worst effects of marketization and are in a better position than men according to some unemployment indicators. Prospects for women's employment under a free market economy also appear to be mixed, with much depending on whether the Polish government introduces a framework of national measures to support and encourage women who enter into paid employment.

Agriculture occupies a unique position in the economy of transition Poland: largely non-collectivised during the communist regime, a large proportion of its agricultural output was, and continues to be, produced on small, private, family-run farms. In this article it is argued that the agricultural community is more at risk than many others in contemporary Polish society from the dangers inherent in the transition to a market-driven economy. If Poland is to become a fully fledged, Western-style nation, radical restructuring of the agricultural sector is essential, although to date reform has been rather marginal. Without a quickening of the pace of agricultural reform, Poland is unlikely to achieve her goal of full EU membership by the beginning of the next century. The portents that this will happen are not, however, promising.

Lifelong learning (LLL) has now been on the agenda of the European Union and other major international organizations for some considerable time, with the European institutions stressing the need that such learning should be available to all, especially hard to reach groups. This paper seeks to explore LLL participation in Portugal and the UK, two countries at opposite ends of the adult learning spectrum and having very different labour market and educational contexts. Using Labour Force Survey data, the results reveal that universal penetration remains a challenge to be overcome, regardless of the setting. The barriers to its achievement, however, appear to be very different. In Portugal, there is an evident need for the learning culture to diffuse more widely throughout the population whereas, in the UK, the problem has its roots in the concentration of LLL amongst the better educated and those in the upper echelons of the occupational hierarchy.

We examine the synchronization of European Union (EU) financial markets before and during the recent financial crisis. A DCC-GARCH framework captures dynamic correlations and a Markov-Switching framework captures regime changes. For the 27 nations of the EU, we formulate characteristics of the crisis: transition dates, duration and intensity. As compared to established members of the EU, recent entrants to the EU entered the crisis at later dates and were less adversely affected. Consistent with the literature on financial contagion, we identify a significant strengthening of correlations between stock markets, particularly for recent entrants. Higher levels of sovereign debt and lower industrialization are associated with the intensity of the crisis experienced. In finding evidence of a core-against-periphery EU, our results refute the notion of uniform integration of EU financial markets.

In this article we focus on the market for corporate control in the UK building society sector. The universal mutuality of this sector protects societies from external bids but there is a buoyant volume of intra-sector take-over activity. We examine the trends in this activity and discuss why external growth is strategically chosen by societies. An additional facet of take-over activity which we consider is mergers which are abandoned. Using two case studies we examine ex ante reasons why the proposed mergers appeared attractive to the societies concerned and conjecture as to why ex post they failed. Our analysis suggests that, in one of our cases, although ex ante assessment reveals potential benefits, ex post the revelation of further information on the financial base of one of the societies made it an unattractive merger partner. For our other case we are unable to establish the existence ex ante of potential benefits and conclude that the attainment of large size was a major motivational force.

The motivation of individuals lies at the core of corporate governance. For CEOs much research has been directed at the linkage between pay and enterprise performance. The results, however, provide only weak support for the efficacy of profit-related pay. Herein we adopt a different perspective and test for the existence of efficiency wages in a mutual sector wherein the use of traditional control mechanisms is particularly problematic. Our empirical results support the hypothesis that efficiency wages do yield superior performance. We therefore conclude that efficiency wages are a much-needed tool of corporate governance in the mutual sector. Furthermore, as an incentive mechanism, efficiency wages do not require the observability of individual effort, thus they potentially provide an equitable incentive mechanism for all organizations.

Recent empirical work has supported the Penrose-Teece view that firms diversify to exploit fully specific assets or capabilities. Where transactions costs permit, these economies of scope may be realized via input supply contracts among producers. However, asset specificities frequently create transactions costs which discourage market contracting and leave firms with a choice between collaborative ventures and wholly-owned new entry. This research uses the natural experiment of financial services deregulation to explore the collaborative-own entry choice for 292 new entries in 13 financial product markets. The results generally support our maintained hypotheses that specificity encourages full ownership while collaboration is used to ease a resource constraint.

In post–1992 Europe, capital will tend to flow to areas of lowest unit output cost. Difference in the quality of labour-management relations, here proxied by strike activity, could be an important component of such costs. The performance of strike models for EC member states is examined, paying particular attention to the evidence for reaction equality to macroeconomic stimuli and for the existence of ‘strike waves’. Both hypotheses are rejected, meaning firstly, that there is no justification for datapooling but, secondly, that member states are free to pursue policies to improve their industrial relations environments without fear they will be undermined by developments elsewhere.

Herein we examine executive compensation in UK building societies in two differing regulatory regimes: (a) in a weakly competitive environment, and (b) in conditions of increased competition. Our results show that the change in regulation did affect the manner in which CEOs in building societies were remunerated. In particular, when there is little external competition, profitability does not positively influence compensation. However, when this external competition increases, improvements in profitability lead to subsequent increases in CEO remuneration. Our work supports the contention that mutuality can be efficient when operating in a sufficiently competitive environment.

A major policy initiative over the past decade or so has been the deregulation of professional and financial services. In particular, reforms have been directed at structural deregulation, i.e. the removal of restrictions upon entry to or exit from specified markets and upon the permissible range of a firm’s activities. In some cases changes have been achieved via negotiation with self-regulatory professional bodies and in others through legislation and statutory direction. In either event, the effect of removing entry restrictions has frequently been to trigger an inward rush for market positions, typically followed by a later exodus of the unsuccessful entrants. Whatever the long-term consequences of relaxing entry rules, this immediate entry race has attracted criticisms. It has been suggested that it encourages overbidding for existing assets (Wright, Ennew and Starkey, 1992) and the creation of unnecessary capacity. A number of commentators have blamed the severity of the current UK recession on the excesses of credit expansion in the aftermath of financial services deregulation.

There now exists a substantial volume of empirical evidence which has examined the superiority of the ‘M’-form organizational structure for the management of large, diversified enterprises. Regrettably, attention has mainly been focused on manufacturing companies, despite the rising importance of the service sector in most major economies. This paper examines organizational structures within one segment of the UK service sector: the insurance industry. In the UK this industry has undergone significant, regulatory-driven structural change and, as a consequence, the majority of companies have undertaken organizational change. The results produced, however, suggest that many of these companies adopted sub-optimal divisionalized structures.

Since 1983 expenditure on acquisitions in the UK has more than doubled in real terms, despite the fact that the consensus of opinion in the academic literature is that acquisitions are not, on average, performance enhancing for the acquiring firm. Such literature, however, relates mainly to the acquisition of large, public companies. Drawing on survey evidence from 146 of the UK's top 500 companies, this article reports the results from a survey which encompasses all takeovers. The study revealed that is the expected reward of increased profitabililty which is used in ex-post evaluation. The major finding of the study is, however, that managers firmly perceive that their takeover activity has been performance enhancing for their company. The evidence presented does suggest that the integration of small acquisitions into an existing organizational structure may be achieved without severe problems of loss of control, and the subsequent decline in performance which beset large acquisitions

Strike activity within the European Community was markedly lower in the 1980s compared with the levels experienced in the 1970s. Over the same period, deindustrialization proceeded apace. The findings of this article suggest that up to 20% of the reduction in work stoppages may simply have been due to the shrinkage of the manufacturing sector. Moreover, a concurrent finding is that strike-proneness within the expanding service industries did not fall in line with that of other areas of activity. These results suggest the need for a careful reappraisal of the meaningfulness of conventional macroeconomic strike models.

The preceding papers in this volume serve as ample testimony to the fact that progress — economic, political or social — in the transition countries has not been as impressive as had been initially hoped. What has not so far received emphasis is that, in virtually every case, it has been developments on the labour market which represent the most conspicuous example of the costs imposed by the systemic change. This has been particularly true in the case of Poland where the emergence of mass unemployment was an almost immediate consequence of the launch of the Balcerowicz Plan in January 1990. Furthermore, the recent reductions in the numbers registered as jobless are too small to be hailed as a long-awaited breakthrough.

Recent empirical work on firm diversification (e.g. Montgomery and Hariharan, 1991; MacDonald, 1985) has lent support to the Penrose (1959)-Teece (1980, 1982) view that firms extend their product range to better utilize specific assets or ‘capabilities’. That is, firms’ diversification strategies represent purposeful attempts to exploit economies of scope, arising from fungible inputs. However, the existence of such potential multiproduct economies is a necessary but not sufficient condition for cost-reducing diversifications. Teece (1980) points out that where transactions costs permit, under-utilized inputs from a producer of A may be hired out to a producer of B with no increase in the product range of either firm. However, in many cases human, physical or site asset specificities introduce transactions costs at levels which discourage input contracting and encourage firms to extend their own scope. A strategic alliance or collaboration, between partners possessing complementary resources, represents an alternative means of exploiting under-utilized assets or — from the partners’ perspective — getting access to firm-specific capabilities.

Publisher Summary This chapter presents a case study on failed building society mergers. Building societies, prior to the 1980s, existed in a relatively stable environment and encountered sparse competition both from within the industry as a consequence of the cartel and interest-fixing arrangements, and from external rivals, because of the demarcation of the mortgage and savings markets. Any proposed merger in the building society sector in the mid-1980s must be examined in the light of the regulatory changes embodied in the 1986 Building Societies Act. The 1986 Act also had implications for a number of merger procedures. Borrowers are now entitled to register their opinion on proposed mergers. As mutual institutions, building societies are effectively immune to takeovers from other types of organizations and are not exposed to the discipline of the stock market.

Since the seminal contributions of Chandler and Williamson, a substantial body of research in industrial organization has examined the performance benefits of the organizational innovation of divisionalization. While existing empirical work has, for the most part, utilized a static framework to analyse the performance effects of divisionalization, adopts a dynamic approach, thereby allowing the intertemporal nature of any such performance benefits to be examined. Presents results from the UK manufacturing industry; the model estimated uses a spline function to incorporate differing organizational regimes over time. The results obtained are less supportive of the benefits of divisionalization than certain of the earlier empirical studies; thus the evidence presented lends no support to the view that organizational change provides unambiguous performance benefits for the firm.

In his opening paper to this volume, Ezzamel (1992) defines financial control as a mechanism designed to promote the smooth functioning of an organization in line with the basic objective of that organization. Defined as such, financial control forms part of a wider spectrum of organizational control mechanisms available to the firm since it focuses specifically on control systems founded on financial criteria. In modern corporations financial control systems abound — performance related pay systems being one example.

The resource-based view of the firm as a historically-determined bundle of specific assets and capabilities predicts that diversification patterns will reflect attempts to utilize these attributes more intensively and so enjoy economies of scope. Furthermore, it suggests that such diversification moves will not be restricted to wholly-owned activities but will include joint ventures where contracting costs permit. This note uses the opportunity created by structural deregulation in U.K. financial services to examine entry decisions-wholly-owned and collaborative-across an unusually homogeneous set of firms. It is found that diversifying entry broadly follows firm-specific and product-specific characteristics, providing support for the resource-based theory in the service sector. However, as in manufacturing it appears that firm size is important, whilst the residual regulatory and ownership arrangements also exercise a significant effect. Copyright 1995 by MIT Press.

The date for the implementation of the Single European Act is now less than four years away. In this paper, it is argued that, even if the deadline for implementation is met, it is unlikely that any great increase in labour mobility will accompany the expected growth in trade and capital movements that liberalisation is aimed to promote. In this situation, labour relations in individual member states may have a significant role to play in influencing the directions in which resources will flow. As strike statistics are frequently taken as a summary indicator of disharmony within labour markets, the recent UK record is examined in order to assess its ability to meet the new challenges which 1992 will issue.

The year 2006 is the European Year of Workers’ Mobility. This article seeks to assess how effective such a designation might be in the context of the problems that currently confront the EU. While it finds that the underlying potential is significant, the reality is that the year has been framed more with political than with social and economic goals to the fore and the result is a disappointment.

It is frequently held that the old “official” unions have largely been discredited, while numerous studies point to employee dissatis‐faction with the performance of unions new and old in the era of transformation in Central and Eastern Europe. Nevertheless, membership has not collapsed, although the unions themselves exaggerate its total. It is somewhat surprising therefore that little work has been undertaken on the determinants of the individual union‐joining decision in the new environment. This paper undertakes such a study for the case of Poland. Notwithstanding reputation effects, two further forces have accompanied the collapse of the communist regime and are likely to have reduced the attractiveness of union membership to workers. The first is the widespread loss of the distributive role with regard to important private goods which the unions previously possessed, while the second is the challenge to the strength of the social custom of union membership which systemic change has occasioned. While the transition economies are often held to have a distinct industrial relations system, in Poland at least, the determinants of the individual union‐joining decision appear very similar to those which have been uncovered in western contexts.