Augmented Solow Model with Mincerian Schooling and Infrastructure Externalities

According to Crescezni and Rodriguez-Pose (2008) backward European regions should follow balanced strategies in which infrastructure development is coordinated with policies aimed at developing human capital and the innovative potential of regions. In order to asses their postulates we extend the analysis of Carstensen et al. (2009) further augmenting the neoclassical Solow Model to incorporate both Mincerian schooling externalities and infrastructure externalities in a single theoretical framework. Infrastructure is introduced into the model in a manner similar to Hicks-neutral technological change – potentially rising overall efficiency of economy. We do not assume ax ante the existence of positive externality. Solving the model we obtain a structural equation which is then econometrically tested in order to obtain estimates of both education and infrastructure externalities for a group of European states. Estimates for panel data model bring interesting results. Infrastructure and education externalities are both postitive and statistically significant. The education externality is however significantly stronger for CEE countries while infrastructure externality is not statistically significant for the same group of countries.economic growth, human capital, infrastructure development, augmented Solow model

In search for accumulative effects of European economic integration

The forthcoming eastern enlargement of the European Union is generally perceived to constitute one of the most significant challenges to the process of European integration so far. The economic impact of the enlargement is likely to be considerable. The enlargement, as any other previous episodes of integration deepening or widening, is going to trigger various static as well as dynamic effects. Due to the increase in internal heterogeneity of the economic block, the effects are likely to be spatially asymmetric. From the point of view of both existing as well as acceding member states the dynamic growth or accumulative effect understood as a permanent change in the long-term average growth rate of GDP per capita is especially appealing. However, theoretical and empirical studies are rather inconclusive as to the very existence, direction and significance of long-term growth effects of economic integration in general and of European integration process in particular. The present study attempts to shed some light on the issue. The study utilizes a two-way panel data approach to analyze a balanced panel of data composed of a group of 20 developed countries covering eight consecutive subperiods between 1960-1999.European economic integration, economic growth, panel data estimation

New empirical insights into the growth effects of economic integration within EU

This paper investigates the existence of medium and long-run growth effects of economic integration within the European Union. We apply the system GMM methodology to estimate a number of dynamic panel data models. The study is undertaken for a panel sample consisting of 27 advanced economies and covering eight time periods between 1960 and 1999. We propose a number of new economic integration variables which presumably better reflect the complex nature of the economic integration process within the EU characterized by gradual widening and deepening. Our results point to an existence of a positive long-term relationship between economic integration and growth rates of real GDP per capita. At the same time we identify a negative medium-run effect on growth of accession into the EU. Both deepening and widening of the economic integration are found to be beneficial to long-term growth performance of Member States. The benefits associated with accession and membership in the EU are found to be asymmetrical.economic growth, European economic integration, dynamic panel data models, system GMM estimator

Product variety and the export pattern of Poland 1999-2006

The goal of this article is to investigate the role of product variety and changes in the product variety in the patter of exports of Poland a middle-sized open economy in the second phase of economic transition to a benchmark group of countries – EU15. The analysis covers the period 1999-2006 and is carried out on highly disaggregated trade data. In the analysis we utilize both simple index of variety of products as well as an index of relative variety of products. Attention is given to the scope and structure of intra-industry trade. The overall product variety in exports to EU15 as measured by simple product counts is found to have decreased while relative product variety in comparison to EU15 Member States remained at roughly unchanged level. Furthermore we investigate the link between the changes in export variety and the growth of TFP in Polish manufacturing industry sectors. The conclusions are drawn from dynamic panel data model controlling for several features suggested by the literature of the subject. The results are rather intriguing and need further robustness tests.product variety, productivity, horizontal differentiation, system GMM estimator

In search for accumulative effects of European economic integration

The forthcoming eastern enlargement of the European Union is generally perceived to constitute one of the most significant challenges to the process of European integration so far. The economic impact of the enlargement is likely to be considerable. The enlargement, as any other previous episodes of integration deepening or widening, is going to trigger various static as well as dynamic effects. Due to the increase in internal heterogeneity of the economic block, the effects are likely to be spatially asymmetric. From the point of view of both existing as well as acceding member states the dynamic growth or accumulative effect understood as a permanent change in the long-term average growth rate of GDP per capita is especially appealing. However, theoretical and empirical studies are rather inconclusive as to the very existence, direction and significance of long-term growth effects of economic integration in general and of European integration process in particular. The present study attempts to shed some light on the issue. The study utilizes a two-way panel data approach to analyze a balanced panel of data composed of a group of 20 developed countries covering eight consecutive subperiods between 1960-1999.European economic integration, economic growth, panel data estimation

Deep determinants of economic growth – empirical verification with panel data models

We verify the impact of the so-called deep determinants on the level of economic real GDP per capita for an unbalanced panel of 207 economies within the period 1996-2004 using the Hausman-Taylor method of estimation. Institutional variables are detected to be endogenous. The results confirmed the assumed impact of deep determinants on the observed disparities in economic development. In most cases the basic specification of the model suggested by the empirical literature (log of openness, rule of law, distance from equator) is statistically significant and the impact of the variables has the anticipated direction. Several other specifications are tested and they perform pretty well. As the distance from equator has been detected not to be statistically insignificant in several specifications (for Asia and Europe) a combination of exogenous geographical variables enters the model with positive results. The basic specification of the model fits well the context of Africa and South America. It however performs badly for Asia. The quality of institutions is of prime importance for southern hemisphere economies as well as for former (currently economies in transition) and current socialist economies. The permanent improvement in the quality of institutions is the key determinant of success of economic transformation – underperformance in this area leads to smaller gains in terms of GDP per capita levels attained.economic growth, economic development, institutions, geography, openness, panel data models, Hausman-Taylor estimator

Spatial econometric analysis of the determinants of location of manufacturing industry and market services sectors in Poland

The paper comprises econometric analysis of location determinants of manufacturing industry and market services in Poland. A wide range of location determinants are analyzed taking into account exogenous and semi-endogenous region-specific aspects, sector-specific aspects (such as labor and capital intensity, economies of scale, intensity of forward and backward linkages, wage rates, knowledge intensity and technology level) as well as interactions between sector-specific and region-specific aspects. The analysis is carried out for an unbalanced data panel of manufacturing industry and market services sectors at the level of 3-digit NACE at the NUTS 2 level (16 voivodeships). The data cover the period from 1995 to 2006. We perform the estimation using Restricted Maximum Likelihood method (REML). The results point to positive spatial autocorrelation both for manufacturing industry and market services sectors. Sector-specific and region-specific effects as proxied by sectoral dummies are important.location, industrial manufacturing, market services, Poland, spatial panel, Restricted Maximum Likelihood method

Handel zagraniczny panstw Grupy Wyszehradzkiej. Zmiany strukturalne i rola handlu wewnatrzgaleziowego.

The goal of this article is to investigate structural adjustments in trade relations of the Visegrad countries resulting from their accession into the European Union and advanced stage of economic transition. Particular emphasis is placed on the similarity of adjustments in geographic trade patterns, the intensity and nature of intra-industry trade flows and their decomposition into horizontal and vertical IIT with up-market and down-market specialization. The paper utilizes a novel approach proposed by Ito and Okubo (2011) using the full information on price differentials in imports and exports to calculate unit value differences measure of intra-industry trade. The method brings a considerable improvement in comparison to previous methods. The empirical results for this particular group of small open-economies are compared with theoretical postulates of new trade theories. English summary. Paper in Polish.international trade, intra-industry trade, Visehrad group, up-market specialization, down-market specialization

Glebokie determinanty wzrostu gospodarczego – weryfikacja empiryczna z wykorzystaniem metod estymacji panelowych.

Na bazie niezbilansowanego panelu danych dla okresu 1996 – 2004 oraz 207 panstw i terytoriow dokonano oceny znaczenia glebokich determinant wzrostu w determinowaniu poziomu rozwoju gospodarczego. W odroznieniu od dotychczasowej analizy empirycznej przedmiotu wykorzystano panelowe modele ekonometryczne szacowane przy pomocy metody Hausmana-Taylora. Analiza ekonometryczna wskazala na endogenicznosc zmiennych instytucjonalnych. Uzyskane wyniki potwierdzily statystyczna istotnosc glebokich determinant w wyjasnieniu roznic w poziomie rozwoju. W wiekszosci przypadkow specyfikacja bazowa modelu – obejmujaca logarytm naturalny indeksu otwartosci, rzady prawa oraz odleglosc od rownika – okazala sie miec statystycznie istotny wplyw na poziom rozwoju gospodarczego, a kierunek ich oddzialywania jest zgodny z oczekiwaniami. Okazalo sie jednoczesnie, ¿e zmienne powy¿sze moga byc zastapione przez inne zmienne instytucjonalne (m.in. efektywnosc rzadow czy jakosc regulacji), czy zmienne geograficzne (w tym kilka zmiennych geograficznych jednoczesnie) przy zachowaniu kierunku i istotnosci wplywu. Ma to o tyle du¿e znaczenie, ¿e w przypadku Europy i Azji odleglosc od rownika okazala sie nie odgrywac statystycznie istotnej roli w determinowaniu poziomu rozwoju. Ogolnie rzecz biorac model bazowy sprawdza sie bardzo dobrze w przypadku Afryki i Ameryki Poludniowej wydaje sie natomiast niedopasowany do specyfiki kontynentu azjatyckiego. Jakosc instytucji wydaje sie miec szczegolnie du¿e znaczenie w determinowaniu rozwoju panstw polkuli poludniowej jak i obecnych i bylych panstw socjalistycznych. Dla osiagniecia korzysci rozwojowych w procesie transformacji systemowej szczegolnie du¿y nacisk nale¿y polo¿yc na jak najlepsza i trwala poprawe jakosci instytucji.economic growth, deep determinants, geography, integration, openness, institutions, panel data, Hausman-Taylor estimator