DO INNOVATION INCENTIVES WORK? EVIDENCE FROM THE ITALIAN MANUFACTURING SECTOR

The main purpose of this study is to investigate upon the impact of fiscal incentives on firm’s innovative performance. We use data from the 7th, 8th and 9th waves of the “Indagine sulle Imprese Manifatturiere Italiane†by Unicredit (previously managed by Capitalia-Mediocredito Centrale), which contains information on both product and process innovation by manufacturing firms, on the amount of resources invested in R&D (if such amount is positive) and it is also informative of the existence of forms of fiscal incentive for R&D and investment in innovative activities. In our study we use different techniques. First we look at Average Treatment Effects, under the assumption of “selection on observablesâ€, implying that the econometrician has access to all the variables affecting the likelihood of being treated. In this part of the paper we verify whether -everything else constant (i.e. for a given value of the propensity score)- there is evidence that firms that have access to fiscal incentives tend to innovate more. In the second part of our study we cast some doubts on the plausibility of the “selection on observables†assumption and we look more in depth at one specific case of fiscal incentive: the one provided by Law 140/1999 to firms located in “depressed areas†(as defined by the law itself). We focus on this law because it is particularly important from a policy perspective within the Italian dual economy, but also because it allows us a more precise estimate of the treatment effect in a situation where treatment status (i.e. access to the incentive) is likely to depend to the same (unobserved) factors that affect the innovation outcome. In such a situation OLS estimated are biased and inconsistent and we have to use instrumental variable estimation. We choose to instrument treatment using the eligibility rules for treatment and we find the confirmation that indeed an endogeneity issue exists and that its effects are stronger the weaker is the impact of treatment on the outcome variable.

Participation in training of adult workers in European countries. Evidences from recent surveys

The importance of a highly skilled workforce has become increasingly relevant in the context of the European Union new strategy for smart, sustainable and inclusive growth - ¿Europe 2020¿. At the individual level, a good education is increasingly decisive for employment prospects and earnings levels. The skills and competences of the workforce are the product of a large variety of learning activities that take place in diverse institutional contexts. While good initial education provides an essential foundation, learning continues through the working years. Policies encouraging wide participation in continuing training are therefore an important component of lifelong learning strategies. Very little is known concerning differences in continuing training or their causes and consequences. Such information would be useful for assessing policy choices related to training, such as whether to encourage an overall increase in training levels or to attempt to redirect training investments toward groups currently receiving little training. This publication deal with some of these issues. First, some aggregate measures using harmonised data from European surveys on training are constructed and analysed. Next, a set of stylised facts concerning differences in the level of training across European countries are discussed. A more formal analysis of the robustness of cross-country differences in the level of training is included; cross-country rank correlations are calculated between the various measures of training. A concluding section considers some policy implications for this area.JRC.DG.G.9-Econometrics and applied statistic

DO INNOVATION INCENTIVES WORK? EVIDENCE FROM THE ITALIAN MANUFACTURING SECTOR

The main purpose of this study is to investigate upon the impact of fiscal incentives on firm's innovative performance. We use data from the 7th, 8th and 9th waves of the "Indagine sulle Imprese Manifatturiere Italiane" by Unicredit (previously managed by Capitalia-Mediocredito Centrale), which contains information on both product and process innovation by manufacturing firms, on the amount of resources invested in R&D (if such amount is positive) and it is also informative of the existence of forms of fiscal incentive for R&D and investment in innovative activities. In our study we use different techniques. First we look at Average Treatment Effects, under the assumption of "selection on observables", implying that the econometrician has access to all the variables affecting the likelihood of being treated. In this part of the paper we verify whether -everything else constant (i.e. for a given value of the propensity score)- there is evidence that firms that have access to fiscal incentives tend to innovate more. In the second part of our study we cast some doubts on the plausibility of the "selection on observables" assumption and we look more in depth at one specific case of fiscal incentive: the one provided by Law 140/1999 to firms located in "depressed areas" (as defined by the law itself). We focus on this law because it is particularly important from a policy perspective within the Italian dual economy, but also because it allows us a more precise estimate of the treatment effect in a situation where treatment status (i.e. access to the incentive) is likely to depend to the same (unobserved) factors that affect the innovation outcome. In such a situation OLS estimated are biased and inconsistent and we have to use instrumental variable estimation. We choose to instrument treatment using the eligibility rules for treatment and we find the confirmation that indeed an endogeneity issue exists and that its effects are stronger the weaker is the impact of treatment on the outcome variable

The consumer empowerment index. A measure of skills, awareness and engagement of European consumers

The Consumer Empowerment Index is a pilot exercise, aimed at obtaining a first snapshot of the state of consumer empowerment as measured by the Eurobarometer survey (Special Eurobarometer n. 342). It is neither a final answer on empowerment nor a comprehensive study on all the different facets of consumer empowerment, but instead it is meant to foster the debate on the determinants of empowerment and their importance for protecting consumers. This report describes the steps followed in the construction of the Index of consumer Empowerment. In particular the definition of the theoretical framework, the quantification of categorical survey questions, the univariate and multivariate analysis of the dataset, and the set of weight used for calculating the scores and ranks of the Index. The report also discusses the robustness of the results and the relationship between the Index and the socio-economic characteristics of the respondents in order to identify the features of the most vulnerable consumers. The Consumer Empowerment Index identifies Norway as the leading country followed by Finland, the Netherlands and Germany and Denmark. The middle of the ranking is dominated by western countries such as Belgium, France, and UK, with an average score 13% lower than the top five. At the bottom of the Index are some Eastern and Baltic countries like Bulgaria, Lithuania, Poland, and Romania with a score 31% lower on average (this gap reaches 40% and 38% in Awareness of consumer legislation and Consumer skills). A group of southern countries, Italy, Portugal, and Spain score poorly in the Index, especially in the pillar Consumer skills where the gap with the top performers reaches 30%.Consumer empowerment; composite indicators

Language skills and international performance: theoretical framework and research questions

The paper investigates the relationship, surprisingly often forgotten by the literature, between firms' language skills and their international performances. After having contextualized the concept of language within the broader concept of culture, the paper introduces language's characteristics and the functions from the point of view of an internationalized firm. The concepts of language skills and language needs are then defined underling the fact that firms' language needs are determined by the number and the characteristics of the markets of interest as well as by the internationalization strategy adopted. These theoretical concepts and the results of the empirical literature are synthesized into a specific framework from which we deduct a body of research questions to be answered with future ad hoc research. The framework and the research questions are proposed taking the perspective of the Italian SMEs opening to the international markets mainly through import or export strategies.language skills, business communications, internationalization strategies, SMEs

A note on the impact evaluation of public policies: The counterfactual analysis

This report describes concisely, and in an intuitive way, the policy evaluation framework and the different counterfactual analysis evaluation strategies: propensity score matching, regression discontinuity design, differences-in-differences and instrumental variables. For each method we present the main assumptions it relies on and the data requirements. These methodologies apply to any type of policy and, in general, to any type of intervention. A selection of papers applying this approach in the context of labour market interventions is also included.JRC.G.3-Econometrics and applied statistic

The Consumer Empowerment Index

The 2007-2013 EU Consumer Policy Strategy emphasizes the importance of a better understanding of how consumers behave and sets as a main objective “to empower EU consumers”. A thorough knowledge of the capacities, information and assertiveness of consumers is considered crucial for being able to design and develop policies for consumer protection. Using the special Eurobarometer Survey n. 342, the DG Joint Research Center (together with DG Health and Consumers) constructed a composite measure of consumer empowerment encompassing the plurality of aspects implied by the EU policy Strategy. The resulting Consumer Empowerment Index describes consumer empowerment along three main dimensions: Consumer skills, Awareness of consumer legislation and Consumer engagement. The Index covers all 27 European countries plus Iceland and Norway. This report illustrates the different steps on the construction of the Index: the quantification of survey questions, the univariate and multivariate analysis of the dataset, the definition of an operational framework as well the selection of weights. Robustness analysis against alternative methodological choices is included. The relationship between socio economic characteristics of respondents and their level of empowerment is also presented with the aim of characterising the most crucial socio-economic determinants of empowerment and foster the debate on consumer protection.JRC.DG.G.3-Econometrics and applied statistic

School-to-work transitions in Europe: Paths towards a permanent contract

In a context of intensive and global economic competition, European countries are growingly concerned with the consequences of increasing numbers of young people temporarily or permanently prevented from entering the job market and the difficulties faced by college and university graduates to find adequate employment. This study is concerned with analyzing the speed of transition of students to permanent employment as a proxy of professional stability, and by identifying possible discriminatory effects in selected countries. The research questions are addressed with a Cox survival model and a continuous-time Markov chain model where each individual can transit non-sequentially between the following Markov states: (1) education; (2) inactivity; (3)unemployment; (4) fixed-term/temporary employment; and (5) permanent employment (the 5th state being a non-absorbing steady state). The model is tested using the longitudinal ECHP data in thirteen EU member countries, over the period 1994-2001, controlling for individual and household characteristics and labour market characteristics (e.g., youth employment rate and share of temporary contracts). Overall, we find that the Mediterranean countries are the ones where the transition is the most hazardous both in terms of length and number of steps, but that in other countries, the speed of convergence is not necessarily correlated to the number of spells at intermediate states. Moreover, we find that the gender discrimination that affected most of the countries at the beginning of the 1990s, faded away by the end of the decade, replaced by a positive discrimination in favour of the graduates from vocationally oriented programmes

APPLICATIONS DE LA THEORIE DES JEUX A L'EDUCATION: POUR QUELS TYPES ET NIVEAUX D'EDUCATION, QUELS MODELES, QUELS RESULTATS?

This paper examines the use of game theory in educational sciences. It describes the evolution of game theory from the defining axioms of Von Neumann and Morgenstern in 1944 to the present. After the Introduction and this description, the third part presents the methodology used to select research articles compared in this study. The final fourth part presents the results of this literature review. The study reveals a similar interest on the part of economists and educators for the application of game theory to issues of education. However, the extremely small number of published articles can be interpreted as the sign of a problem of adaptability of this method in this research discipline. The paper concludes with a discussion of the nature of this inadaptability

APPLICATIONS DE LA THEORIE DES JEUX A L'EDUCATION: POUR QUELS TYPES ET NIVEAUX D'EDUCATION, QUELS MODELES, QUELS RESULTATS?

This paper examines the use of game theory in educational sciences. It describes the evolution of game theory from the defining axioms of Von Neumann and Morgenstern in 1944 to the present. After the Introduction and this description, the third part presents the methodology used to select research articles compared in this study. The final fourth part presents the results of this literature review. The study reveals a similar interest on the part of economists and educators for the application of game theory to issues of education. However, the extremely small number of published articles can be interpreted as the sign of a problem of adaptability of this method in this research discipline. The paper concludes with a discussion of the nature of this inadaptability