Abstract: This paper investigates how subcontracting affects collusion in public procurement. In a model in which a public buyer runs simultaneous or sequential competitive procedures we show that the stability of collusive agreements depends on the level of subcontracting share and it is not necessarily increasing in this share. In a repeated procurement in which contractors and subcontractors are involved in collusive agreements enforced by slit award and bid rotation strategies we find that simultaneous procedures induce less collusion than sequential procedures, with split award strategies allowing the less stable collusive scheme. We also find that allowing a further increase in the subcontracting share strengthens collusion when the share is low but it mitigates collusion when the share is high. Thus, the competitive format and the allowed subcontracting share must be carefully managed by the public buyer in order to prevent collusion. PubDate: 2019-11-07
Abstract: From the 1990s the Italian agribusiness sector is increasingly threatened by a new and dangerous phenomenon: organized crime in the agribusiness sector. The so-called “Agromafia” imposes its control throughout the whole agricultural supply chain, from production to retail, passing through the processing industry, transports and large-scale distribution. In this paper we examine the relationship between eco-crimes and consumer food and non-alcoholic drinks price index for the 20 Italian regions and 80 Italian provinces in the 1998–2016 period. At regional level, as a proxy for the Agromafia’s activities, we build an ad hoc eco-criminal index for every region using data annually elaborated from Legambiente. At province level, as a proxy for Agromafia’s activities, we use eight specific variables: extortions, counterfeiting, contraband, forest fires, all types of fires, money laundering, suspicious money transfers, and an ad hoc eco-criminal index. The analysis shows that the Agromafia can consistently affect the whole agribusiness sector, causing an increase in food prices, especially in south of the country. The ten most affected provinces by phenomenon register a food consumer price index about 12% higher than the least ten affected provinces. By the contrast, in the center-north of Italy money laundering seems to reduce food consumer prices through the reinvestment of illicit proceeds in firms with strong cost advantages. PubDate: 2019-10-31
Abstract: The paper offers a new country classification system defined in relative terms and jointly based on the level and the medium–long term rate of growth of per capita income. The classification system identifies four categories of economies: poor (low income–low growth), emerging (low income–high growth), booming (high income–high growth) and affluent (high income–low growth). After classifying 122 countries in periods 1985–1999 and 2000–2014, the paper focuses on the comparison of poor and emerging economies and, in parallel, of emerging and high-income economies, and characterizes their transitions across categories. In line with the empirical literature on economic growth, the results of multinomial logit analysis suggest that higher growth rates of export and investment are the main factors distinguishing emerging from poor economies. Further, a better institutional setting, measured by various dimensions of economic freedom, plays an important role in driving the transition of low income countries from low to high growth. Moreover, along with a better technological advancement, it also represents the crucial attribute differentiating high-income from emerging economies. PubDate: 2019-10-29
Abstract: We study investments in education made by a continuum of individuals under imperfect information on returns. In the model, the wage accruing to single units of human capital is bargained in the labour market. In addition, this wage depends positively on a stochastic fundamental and, negatively, on the aggregate supply of human capital. At the time of investment, any agent observes a public and a private signal of the fundamental. We show that an increase in the precision of the public signal has an ambiguous impact on the expected social welfare. On the one hand, social welfare improves as schooling decisions become closer to those decisions that would be made under perfect information. On the other hand, social welfare deteriorates as externalities and coordination failures become more severe. The key result of our analysis is that an increase in the quality of public information turns out to be welfare improving, unless the distortions on the labour market are particularly strong. PubDate: 2019-10-17
Abstract: This paper investigates the degree of integration among markets using wholesale electricity prices, which arises from the link between the long-run dynamics of fuel prices and electricity prices. We address the question of whether European electricity markets have experienced convergence patterns in recent years, using the stochastic definitions of convergence and common trend based on cointegration analysis. We apply a vector error correction model to a representative sample of electricity spot prices of European markets, including those of Italy, France, the Netherlands, Poland, and the integrated market of Germany and Austria. We analyze both the long- and the short-run system properties, studying their persistence profiles. The short-run analysis reveals the non-significance of adjustment coefficients of the market prices in the Netherlands and Poland. Moreover, the Netherlands Granger causes Poland and the integrated market of German and Austria, but the reverse is not true. A unidirectional Granger causality is also found for France and Germany and Austria toward Italy. Given the cointegrating equilibrium, all country-specific price dynamics converge toward the steady state, but most of the exogenous shocks have permanent effects. Forecast error variance decomposition analysis clearly highlights that orthogonalized shocks largely affect the variance of neighboring markets. PubDate: 2019-10-14
Abstract: The problem of young NEETs (not in education, employment and training) strongly affects countries where youth unemployment is high and investment in human capital is scarce, such as Italy. The share of young NEETs in Italy is double the European average in post-2007 crisis values and approximately 4–6% greater than precrisis values. We suggest that the local human capital endowment forms an educational and cultural base that can discourage the status of inactivity among young people, i.e., those at risk of becoming NEETs during the years of the postcrisis recession. The effect of parents’ education is confirmed in Italy, and this effect is stronger when considering parents’ advanced education (proxied by the tertiary education of the adult population) in urging young people to complete their studies or to enter the labor market. Furthermore, a control analysis that tests the regressors’ effects on the parallel phenomena of youth unemployment and school dropout suggests common ground on which to base appropriate policy interventions. PubDate: 2019-10-04
Abstract: A considerable amount of studies in the transport literature is aimed at understanding the behavioural processes underlying travel choices, like mode and destination choices. In the present work, we propose the use of evolutionary game theory as a framework to study commuter mode choice. Evolutionary game models work under the assumptions that agents are boundedly rational and imitate others’ behaviour. We examine the possible dynamics that can emerge in a homogeneous urban population where commuters can choose between two modes, private car or public transport. We obtain a different number of equilibria depending on the values of the parameters of the model. We carry out comparative-static exercises and examine possible policy measures that can be implemented in order to modify the agents’ payoff, and consequently the equilibria of the system, leading society towards more sustainable transportation patterns. PubDate: 2019-10-01
Abstract: Although the recent empirical literature provides a satisfactory range of estimates of food waste at the national and global level, little attention has been devoted to lower units of aggregation. This article tackles the phenomenon of urban food waste (UFW), proposing an analysis of consumer behaviour at the local level. Using institutional data for Italian provinces, over an 11-year time span (2004–2014), we estimate the amounts of UFW and subsequently investigate the extent of persistence and spatial spillovers using the local Moran transition probability matrix. Our results suggest that the good and bad practices in food consumption that determine the levels of UFW are persistent over time. Moreover, they produce a (though limited) spatial spillover, affecting consumption practices in the neighbouring areas. Two province clusters emerge, one in Northern and Central Italy, featuring negative behaviours and the other one in South-Central and Southern Italy, displaying virtuous behaviours. This situation calls for public policies aimed at promoting convergence in the levels of UFW. PubDate: 2019-10-01
Abstract: This paper investigates theatre consumption in Italy in 3 years, 1995, 2000 and 2006 using data provided by the Italian Institute of Statistics (2006 the latest year for such data) and the Italian Society of Authors and Publishers. These data sets are very large and rarely analysed in the current economic literature. Explanatory variables are determined by identifying their contributions to both the probability to attend, and the probability to attend more, using the finite mixture regression model. Socio-demographic and socio-economic characteristics, participation in other cultural activities, ticket price and theatre supply are taken into account to varying extents. Three main findings emerge based on a more generous sample than past analyses. The strong confirmation of a priori expectations for education and occupation variables. The different impact of explanatory variables on the decision to attend and the decision to attend more. Finally, a remarkable consistency of results across the 3 year surveys and the different model specifications. PubDate: 2019-10-01
Abstract: This paper analyses the Italian economic stagnation in a Kaldorian framework. On the theoretical ground we propose an interpretation of the Italian economic stagnation based on the continuous reduction of aggregate demand and labour productivity. We also consider the role of the banking sector as a factor driving aggregate demand and, in turn, labour productivity. We estimate a VAR for the period 2002–2015 to analyse jointly the evolution of private consumption, real GDP, private investments, credit supply, labour compensation and productivity. Our main empirical finding is that aggregate demand and credit supply significantly affect the path of labour productivity, consistently with Kaldor–Verdoorn Law. PubDate: 2019-10-01
Abstract: Conventional theories of competition classify contests as being either “productive”, when the competitive efforts generate a surplus for society, or “unproductive”, when competition generates no social surplus and merely distributes already existing resources. These two discrete categories of competition create a division of real-world situations into analytical categories that fails to recognize the entire spectrum of competitive activities. Taking the existing models of productive and unproductive competition as benchmark idealizations, this paper revisits the relationship between the privately and socially optimal levels of competition in the full range of intermediate cases, as well as in the extremum cases of destructive and super-productive competition. PubDate: 2019-10-01
Abstract: The effect of early school entry on pupils’ educational outcomes is investigated using data covering the entire population of Italian primary school students and exploiting exogenous thresholds imposed by legislation regulating school entry. Evaluation tests are set at different dates for different cohorts so that the effects of age-at-test and age-at-school-entry on pupils’ performance can be disentangled. Results highlight that despite a negative and significant effect of age-at-test, the negative effect of early enrollment on scores is still present and it lasts for the entire primary education path. PubDate: 2019-10-01
Abstract: Housing market rigidities or inefficiencies can damage labour market outcomes and increase unemployment. Also, a related research stream claims that higher homeownership rates are associated with fewer new businesses. Using a search-and-matching model, this theoretical paper investigates the inexplicably neglected relation between homeownership and entrepreneurship by distinguishing two channels through which homeownership affects the creation of enterprises and jobs. The first channel looks at the job search intensity of homeowners, while the second considers the link between the benefit of being a homeowner and the revenues of a new enterprise that is run by the homeowner. The main result of this paper is that the intrinsic preference for homeownership plays a key role in the establishment of new businesses, while in general homeownership does not encourage the development of existing enterprises. Indeed, a panel analysis in Italy confirms the main finding of the search-and-matching model, namely outright homeownership encourages the creation of new small businesses. PubDate: 2019-10-01
Abstract: Insufficient attention has been paid to the different roles of wage incentives in the competitiveness of family and non-family firms. This paper addresses this issue and uses a sample of listed and non-listed Italian firms for 2007 and 2010 to show that family firms that adopt incentive wages obtain greater gains in competitiveness with respect to non-family firms. Unlike what occurs in non-family firms, the efficiency enhancing effect of incentive wages more than compensates for the premiums paid to employees and enables family firms to achieve significant gains in terms of competitiveness. PubDate: 2019-10-01
Abstract: Worker co-operatives have been shown as characterised by higher wage volatility while providing higher employment stability compared with investor-owned firms (IOFs). These stylised facts show co-operatives’ stronger tendency to preserve employment more than maximising members’ incomes or profits. Most empirical tests in different national contexts also provide evidence of lower wages in worker co-operatives than in IOFs. Such evidence is unexplained to date. To fill this explanatory gap, we resort to the Shapiro and Stiglitz (Am Econ Rev 74(3):433–444, 1984) model of unemployment as a worker discipline device. Given lower agency costs, more efficient monitoring and the absence of wage premiums compensating for the expected costs of contractual failures, we show that equilibrium wages in co-operatives can be lower than in IOFs, while employment, ceteris paribus, is always higher. We draw the following conclusions: (1) Equilibrium unemployment can be at least partly interpreted as a negative external effect of labour contract failures and bilateral opportunism. (2) Shapiro and Stiglitz’s (1984) result is a special case of a broader class of equilibria characterised by contractual imperfections in the agency relation. (3) Various ownership forms can have different impacts on equilibrium unemployment and wages. PubDate: 2019-10-01
Abstract: In this paper, we make use of Bayesian VAR (BVAR) models to conduct an out-of-sample forecasting exercise for CPIF inflation, the inflation target variable at the Riksbank in Sweden. The proposed BVAR models generally outperform simple benchmark models, the BVAR model used by the Riksbank as presented in Iversen et al. (Real-time forecasting for monetary policy analysis: the case of Sveriges Riksbank, Working Paper 16/318, Sveriges riksbank, Stockhol, 2016) and professional forecasts made by the National Institute of Economic Research in Sweden. Moreover, the BVAR models proposed in the present paper have better forecasting precision than both survey forecasts and the method suggested by Faust and Wright (in: Elliott, Timmermann (eds) Handbook of forecasting, 2013). The findings in this paper might be of value to analysts, policymakers and forecasters of the inflation in Sweden (and possibly other small open economies alike). PubDate: 2019-09-13
Abstract: This study explores the relationship between greenhouse gas (GHG) emissions, financial development and disaggregated energy consumption among the top 10 countries with the highest CO2 emissions (Canada, China, Germany, India, Iran, Japan, Korea Republic, Russia, UK and US). The study uses panel data for the period 1990–2014 within a multivariate framework. The econometric techniques of cross-sectional dependence unit root test, panel co-integration (Levine, Lin and Chun; Breitung; Im, Pesaran and Shin; Fisher-Augmented Dickey Fuller and Fisher-Phillips Perrron) tests, fully modified ordinary least squares (FMOLS) and Dumitrescu and Hurlin Granger causality tests are applied for the unit root test, co-integration, estimation of long-run coefficients as well as inference on the causal relationship respectively. Pesaran’s cross-sectional unit root test shows that variables are integrated of the first order. Pedroni’s heterogeneous panel co-integration tests reveal a long-run equilibrium relationship between the dependent and independent variables. The Granger-causality results indicate both short-run and long-run causality among renewable, fossil fuel energy and financial development and GHG emissions. The results’ findings have important policy implications for environmental quality, and thus, GHG emissions’ reduction using a higher percentage of energy from renewable energy. In addition, there is need for countries to increase financial support on renewable energy infrastructure construction as well as transformation of fossil fuel energy utilization. PubDate: 2019-07-20
Abstract: It is widely recognized that childcare has important pedagogical, economic and social effects on both children and parents. This paper is the first attempt to estimate a joint structural model of female labour supply and childcare behavior applied to Italy in order to analyse the effects of relaxing the existing constraints in terms of childcare availability and costs by considering public, private and informal childcare. Results suggest that Italian households might alter their childcare and labour supply behaviors substantially if the coverage rate of formal childcare increases to reach the European targets. Overall, increasing child care coverage is estimated to be more effective in enhancing labour incentives than decreasing existing child care costs, at the same budgetary cost. PubDate: 2019-07-19
Abstract: This paper analyzes the relationship between the likelihood that Italian firms implement bank debt restructuring and the trade credit. It uses a sample of 2377 Italian firms over the period of 2010–2014. The empirical analysis shows that the amount of payables and the unexpected delay in the payment of trade credit are strictly related to the firm’s financial distress. Specifically, the findings suggest that companies in financial distress have used trade credit extensively and suffer from the deferment of receivables. This result supports the hypothesis of a potential credit contagion channel in the supply chain with a cascading effect between buyers and suppliers. PubDate: 2019-07-01
Abstract: This paper uses peer comparisons to analyze the impact of different types of inequalities (i.e., within-group, between-group and overall inequality) and reference income on subjective happiness. This study contributes to an emergent strand of research in which both relative levels of economic resources and the income distribution are regarded as determinants of individual happiness. The empirical findings show that overall and within-group inequality negatively affect individual happiness, inequality between reference groups does not affect happiness, and a higher average income of the reference group increases individual happiness. We examine whether people’s aversion to inequality is conditional on their income position within reference group and institutional differences across European countries. These tests indicate that an increase in inequality or a decrease in average income decreases the happiness of both the rich and the poor. Regarding the differences across countries, people who live in more mobile societies with better welfare systems (e.g. Social-Democratic countries) are less adversely affected by inequality than people living in countries with low social mobility and ineffective systems of social protection (e.g. the Mediterranean countries). The analysis is based on data from the European Quality of Life Survey. PubDate: 2019-07-01
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