Fiscal Autonomy and EU Structural Funds : The Case of the Italian Regional Income Tax System

In light of the principle of additionality, the inflow of European Union (EU) funds should complement domestic public funds, which are required to cofinance the investment. EU funds should either be unrelated to fiscal decisions of recipient regions, and as such should not affect taxation choices, or they could imply an increase in taxation to finance the additional domestic funds required by the additionality principle. Empirical results linking fiscal autonomy of Italian regions, considered by looking at the number and the level of average tax rates for the regional surcharge on the personal income tax and committed EU funds, suggest the existence of a significant relationship, even after controlling for relevant economic and political factors. The level of average tax rates is lower the more EU funds are received, as is the complexity of the system, measured by the number of income tax brackets

Foreign and spatial spillovers in the European electricity sector

Productivity determinants of the urban domestic electricity sector in a cross-section of EU countries are examined to unveil the existence of two forms of spillover effects: those from foreign firms (foreign spillovers) and those related to spatial interactions (spatial spillovers). The empirical analysis also assesses the importance of industrial disaggregation in the context of the ongoing policy reform process at the EU level, aimed at creating a single competitive market for electricity. Results suggest that domestic productivity is influenced by agglomeration economies, and in particular scale economies, that both foreign and spatial spillovers are present, and that the overall implications of foreign presence and domestic firms\u2019 ownership is differentiated across the generation and distribution segments of the electricity sector. The latter result highlights the importance of properly defining a firm\u2019s relevant market, from the perspective of policy makers and firm managers alik

Productivity in electricity generation : the role of firm ownership and regional institutional quality

The electricity generation sector is considered the most competitive segment of the industry and has undergone significant reforms in recent years. Liberalization,market opening and privatizations have characterized, with country-specific variations, the European electricity supply market. This paper examines the links between possible outcomes of these reforms, in particular firm ownership, and total factor productivity, while also controlling for regional characteristics. Results of the estimation of quantile regressions show that foreign ownership is associated with higher total factor productivity (TFP) levels, while public ownership exhibits a different behavior in different quantiles. Regional institutional quality is positively related to TFP. Results are robust to alternative TFP measure

The rate of return to investment in R&D : The case of research infrastructures

The return to R&D investment and activities has been the object of a vast literature, both from a theoretical and empirical perspective. The aim of this overview is to present a selection of contributions to underscore the main shared findings and highlight open issues, while also providing a preliminary analysis of the returns to R&D investment in large research infrastructures (RIs) in Europe. First, a common methodological framework is distilled from the macro-literature, examining the return to R&D in aggregate terms. Then, the evaluation in the context of specific projects, mainly in large RIs, is examined, followed by the explicit consideration of externalities and spillover effects of research activities. A novel empirical analysis of European RIs is also presented, based on a novel data set, to highlight trends and suggest new avenues for the evaluation of the rate of return to investments in research infrastructures, using both a cost effectiveness ratio and a bibliometric citation count as metrics to evaluate the return to R&D investment in these facilities. Directions for future research are sketched in the concluding section

Smart Specialization Strategies and Smart Cities: An evidence-based assessment of European Union policies

Recently, the European economy has undergone severe stress. After a decade of stable prices, cheap borrowing, and the progress of the process of enlargement (pushing the European Union (EU) to 28 member countries and about half a billion inhabitants), the European economy entered a stage of economic distress which has so far not yet been fully solved. The crisis which began in 2008 has had several manifestations. Unemployment has constantly increased in several EU countries, with a particular burden on the younger generations and with a constant rise in long-term rates (European Commission, 2013). The cost of financing public debt has notoriously risen, in particular in Mediterranean countries and in a few new Member States. In addition, the insufficient degree to which the challenging targets in terms of science and innovation set first by the Lisbon Agenda (European Commission, 2000) and then by the EU2020 follow-up (European Commission, 2010) are being met seems to cast doubts on the long-term possibilities to structurally regenerate the EU economy and truly make it more innovative, and, thus, more competitive

Additionality and regional public finance : Evidence from Italy

To what extent do EU Structural Funds complement or substitute domestic public funds? The intended and unintended effects of the transfer of additional funds on recipients' domestic public expenditure structures are considered and their existence is empirically evaluated. After reviewing the literature on the complementarity, substitutability and displacement effects of additional funds on national and regional public expenditures, we empirically assess these effects in relation to EU funds in Italy. The empirical analysis is based on data on the allocation of EU Structural Funds from 1996 to 2010 with a regional and thematic breakdown and on the Italian Regional Public Accounts. The aim is to develop a useful framework, which can aid in effectively assessing to what extent Structural Funds, or other supranational funds, complement domestic public investments. In light of empirical results, the current verification mechanism in force in the EU is examined, stressing potential weaknesses and proposing possible solutions

Do Smart Cities Invest in Smarter Policies? Learning From the Past, Planning for the Future

Research on Smart Cities has come of age. Intense discussion on this topic has been ongoing for years, and the academic prominence of this concept has also engendered several policy initiatives inspired by this label at different administrative levels. However, to date, no large-scale evaluation of the relationship between urban smartness and smart urban policies has been attempted. This article aims at filling this gap. By building on a solid definition of Smart Cities, the article tests the empirical relationship between urban smartness and the intensity of Smart City policies. A novel data set on four different types of policies and smart urban characteristics is assembled for 314 European Union cities. Empirical results suggest that Smart City policies are more likely to be designed and implemented in cities that are already endowed with smart characteristics. Our findings also point to a higher probability that Smart City policies are implemented in denser and wealthier urban areas. These empirical results call for further research on the real effects of actual implemented Smart City policies, with the aim to verify the potential of this policy concept as an overall urban development model encompassing the main drivers of endogenous urban growth

The winner takes it all : forward-looking cities and urban innovation

This paper offers a new perspective on urban innovation and enters the debate on the contribution of non-material growth-enhancing factors to the socio-economic performance of cities. Because of the often widespread availability of \u201chard\u201d production factors, most cities increasingly compete for attracting non-material production factors whose role, in light of the more widespread diffusion of physical production factors, may ultimately determine their long-run economic success. Against this background, our paper focuses on a relatively neglected non-material factor, viz. urban risk attitude. In fact, cities offer the competitive and challenging environment where individual characteristics of actors may enjoy their highest returns; risk-loving and innovative individuals may sort in large urban agglomerations. The paper tests whether cities attracting such individuals and, thus, enjoying a more positive and open attitude towards risk, tend to innovate more. The empirical analysis of the paper is based on the most recent (2008/2009) wave of the European Values Study. Micro- data on about 80,000 individuals located in different EU urban areas are used to calculate city-specific attitudes towards risk that go beyond individual characteristics. This city-level risk attitude variable is then used within a knowledge production function approach, as an explanatory variable for urban innovation (patent applications to the European Patent Office) along with more traditional knowledge determinants (human capital and R&D expenditures). Our empirical results show that cities with a more open and positive attitude towards risk ceteris paribus also tend to be more innovative. In addition, we find that, unlike traditional knowledge production factors, this factor faces no decreasing returns. While further research might be beneficial in order to more precisely pinpoint the extent of such effects, our findings appear to be robust and suggest a positive role for the urban attitude towards risky endeavours in explaining urban innovation

Public enterprises in the market for corporate control : recent worldwide evidence

This paper analyzes deals involving private and public enterprises, i.e. State-Owned Enterprises (SOEs) worldwide since 2004. We consider four types of deals: privatizations of SOEs, public enterprises acquiring private ones (public-private deals), private reorganizations (i.e private firms acquiring a private target) and public reorganizations. (i.e. both acquirer and target are SOEs). We study whether the pre-deal performance and corporate characteristics of the acquirer and target companies vary across the four types of deals depending on ownership: public or private. Data are taken from Zephyr (Bureau Van Dijk), which provides information on completed deals worldwide and Orbis, a firm-level dataset (also implemented by BvD). Some results of previous literature on M&As performed by private firms ('the inefficiency management hypothesis') are both confirmed and expanded. Acquirers involved in deals are both larger and better performing than their targets but some qualifications are in order with respect to ownership. The difference in size and performance between acquirers and targets is in fact more pronounced for public with respect to private acquirers. The evidence thus points to an active role of SOEs as acquirers, as they significantly out-perform relative to their targets, including private ones, in terms of return on sales. Given these novel findings, further research is needed to examine the motivations behind the different types of deals considered and to verify the role of government ownership in the contemporary global economy