Bank Strategies in Euroland with Special Reference to the Benelux Area.

In its first part, the present essay focuses on one main thesis. The transition to full EMU and the introduction of the euro will have a more effect on European banking than the previous Single Market¨Project (Europe 1992). They deal directly with money, the basic material of banking, and they pave the way to more aggressive bank strategies. In conjunction with other factors, they not only induce "accomodating" reactions, mainly through cost-cutting, but also "autonomous restructurings" : less intermediation, more market activities and, most of all, external growth through M(ergers) and A(cquisitions). This significantly changes the structure and the policies of European banking. Recently important and controversial M and A have occurred in the Benelux area. In the second part of the essay, these developments are analysed in the just described framework. After a global overview two case studies are presented : ABN-AMRO, n° 1 in the Netherlands; the Generale Bank, n° 1 in Belgium. The main conclusion is that the rationale behind the recent M and A is not mere size, but also accelerated rationalisation and penetration in foreign domestic markets, which was previously hampered by defensive and ultimately self-defeating strategies of strengthening the mere national domestic base. However, at the present stage, the importance of institutional resistance, even in small neighbouring countries, should not be under-estimated. Hence, cross-border restructurings in European banking will only increase gradually.EMU, euro, bankstrategies, Benelux financial systems.

Beyond Belgium : the business empire of Edouard Empain in the First Global Economy (1880-1914)

By looking through the lens of a global entrepreneur, this dissertation provides insight into a crucial period in world history: the First Global Economy (1870-1914). To tackle the broader issue of the opportunities and limitations in a paradoxical world of economic globalization and political fragmentation, I take an actor-centered approach. The history of the business empire of the Belgian Edouard Empain (1852-1929) elucidates a complex era characterized by globalization and nation-state formation. By focusing on an entrepreneur originating from a small country but transcending boundaries, the possibilities and risks for international business in this period can be studied. Starting in 1880, the business group of Edouard Empain developed into one of the largest in Belgium and became a global player active on four continents. The Empain group mainly invested in public utilities such as transportation and electricity production as well as in electrical engineering. Within this context, this dissertation answers the following question: What strategies did a multinational enterprise from a small country adopt to seize the opportunities and handle the risks of a world characterized by both economic integration and geopolitical rivalry at a global scale? I argue that, to understand the development of international business in the First Global Economy, we need to acknowledge the importance of the following three domains: the geographical and sectoral strategy, the corporate structure, and the business-government relations. To address these issues, this dissertation uses a wide array of archival sources and secondary literature. It combines a comprehensive approach of the more than eighty Empain companies with selected case studies to understand the dynamics of international business. This allows me to argue that Empain developed strategies in the three abovementioned domains to transform the global economic and political challenges into opportunities. First, his investments were the result of an entrepreneurial logic combined with the pursuit of economies of scale and scope. Secondly, the business group form had many advantages, making it an efficient device for investments in the First Global Economy. Thirdly, thanks to the complex interplay between the multinational enterprise, the home country and the host countries, an entrepreneur from a small country could exploit the international political frictions of the late nineteenth-century world to develop a global business empire

Belgian investment in trams and light railways. An international approach, 1892-1935

[Abstract]: In this article the international investments made by Belgium are analysed both geographically and quantitatively, within the urban transport sector, a sector which has been little researched and in which Belgium played a leading role in several countries. The article looks at the importance of foreign ownership in transport enterprises, a subject of on-going debate in transport historiography. The hypothesis that the article puts forward is that the promotion of tramway enterprises abroad, via Belgian capital, is linked with the search for new markets for the steel and engineering industries. To this end new evidence will be provided which sheds light on this relationship. This contribution will help us to better understand the role of Belgian capital in promoting tramway networks throughout the world, the motives behind such investment and the mechanisms and strategies used

Market Access Strategies in the EU Banking Sector - Obstacles and Benefits towards an integrated European Retail Market

The integration process in the European banking sector considerably differs with regard to product types. Deep integration can be observed in the money market as well as the market for wholesale products. In contrast to that, a strong segmentation of national markets still exists in the field of retail products. In this context, the paper analyses market access strategies of European banks. The analysis is based both on aggregate sectoral data and on four company case studies (BSCH, Nordea Group, BNP Paribas and HSBC). It is explored to which extent different market access strategies contribute to the integration of the European retail markets. A clear result is that mergers and acquisition as well as cooperations and strategic alliances form the most important market access strategies. Direct cross-border sales and the establishment of branches and subsidiaries are of minor importance. All strategies are complicated by considerable natural and politically induced barriers to market access. In particular, such politically induced barriers are different national supervision of banks, different tax legislation, as well as national accounting and take-over principles. Here, further harmonizations are suited to accelerate the integration of European retail markets and thus to increase consumer benefits by lower prices and a higher product variety for financial services.European integration; cross-border banking; mergers and acquisitions

Protectionist Responses to the Crisis: Global Trends and Implications

In this paper we take a systematic look at recent trends in global protectionism and at the potential implications of a protectionist backlash for economic growth, using results from the recent economic literature and new model simulations. We find that there has so far been a moderate increase in actual protectionist measures to restrict trade through tariff and non-tariff barriers. At the same time, evidence from surveys shows that public pressure for more economic protection has been mounting since the mid-2000s, and has possibly intensified since the start of the financial crisis. However, no World Trade Organization (WTO) member has retreated into widespread trade restrictions or protectionism to date. Our model-based simulations suggest that the impairment of the global flow of trade would hamper the recovery from the crisis, as well as the long-term growth of the global economy. At the same time, it is unlikely that protectionism would help to correct existing current account imbalances. Moreover, the countries implementing protectionist measures should expect a deterioration of their international competitiveness, which would further affect the potential for longer-term real GDP growth.Protectionism ; trade ; financial crisis ; competitiveness ; World Trade Organization ; global imbalances.

Convergence in Household Credit Demand Across Euro Area Countries: Evidence from Panel Data.

The paper contributes to the literature on the convergence of financial systems in the euro area by estimating household credit demand in individual countries. Using the ARDL framework advocated notably by Pesaran et al. (1999), the paper provides evidence on the convergence of long run credit demand determinants (interest rates, investment and house prices) among the largest euro area countries, while short run dynamics remain heterogenous across countries. The paper also demonstrates that the equation uncovers demand rather than supply behaviour.Credit demand ; Panel cointegration ; Households ; Bank profitability.

Price, Wage and Employment Response to Shocks: Evidence from the WDN Survey

This paper analyses information from survey data collected in the framework of the Eurosystem's Wage Dynamics Network (WDN) on patterns of firm-level adjustment to shocks. We document that the relative intensity and the character of price vs. cost and wage vs. employment adjustments in response to cost-push shocks depend - in theoretically sensible ways - on the intensity of competition in firms' product markets, on the importance of collective wage bargaining and on other structural and institutional features of firms and of their environment. Focusing on the pass-through of cost shocks to prices, our results suggest that the pass-through is lower in highly competitive firms. Furthermore, a high degree of employment protection and collective wage agreements tend to make this pass-through stronger.Wage bargaining, Labour-market institutions, Survey data, European Union.

Determinants of Productivity per Employee: an Empirical Estimation Using Panel Data

Two different approaches are used in this article to study productivity per employee: the determinants of its growth rate in the 1990s are first examined, and then the determinants of its level, using a more structural approach. ICT are shown to have a positive and significant effect on both growth rates and levels of productivity. This result is consistent with that of Gust and Marquez (2002), although the sample of countries is larger and GMM are used. In both sections of the paper, the employment rate and productivity exhibit a significant negative relationship, arising from the concentration of employment on the most productive members of the workforce. Indicators of financial depth and price stability are found to be significant.Productivity ; Panel ; Generalized method of moments ; Information and communication technology (ICT) ; Growth accounting

Do product market regulations in upstream sectors curb productivity growth? Panel data evidence for OECD countries

The paper focuses on the influence of upstream competition for productivity outcomes in downstream sectors. This relation is illustrated with a neo-Schumpeterian theoretical model of innovation (Aghion et al., 1997) with market imperfections in the production of intermediate goods. In this context, upstream market imperfections create barriers to competition in downstream markets and upstream producers use their market power to share innovation rents sought by downstream firms. Thus, lack of competition in upstream markets curbs incentives to improve productivity downstream, negatively affecting productivity outcomes. We test this prediction by estimating an error correction model that differentiates the potential downstream effects of lack of upstream competition in situations close and far from the global technological frontier. We measure competition upstream with regulatory burden indicators derived from OECD data on sectoral product market regulation and the industry-level efficiency improvement and the distance to frontier variables by means of a multifactor productivity (MFP) index. Panel regressions are run for 15 OECD countries and 20 sectors over the 1985-2007 period with country, sector and year fixed effects. We find clear evidence that anticompetitive regulations in upstream sectors have curbed MFP growth downstream over the past 15 years. These effects tend to be strongest for observations (i.e. country/sector/period triads) that are close to the global technological frontier. Our results suggest that, measured at the average distance to frontier and average level of anticompetitive regulations, the marginal effect of increasing competition by easing such regulations is to increase MFP growth by between 1 and 1.5 per cent per year in the OECD countries covered by our sample. Our results are robust to changes in the way MFP and the regulatory burden indicators are constructed, as well as to variations in the sample of countries and/or sectors.Productivity, Growth, Regulations, Competition, Catch-up.