Spring 2018


European Regional Policy

Julian Ramajo, Miguel A. Márquez

The Economic Effects of the Cohesion Policy in Extremadura 1994-2020: 25 Years of Programs and Funds of the European Union

The objective of this work is to provide an exploratory analysis of the economic effects of various Operational Programs implemented in Extremadura, the only Spanish region that, in the context of the European Cohesion Policy, still remains in the group of less developed regions (with a per capita income lower than 75% of the European average). After carrying out an examination of some of the most relevant socio-economic characteristics of Extremadura, a homogeneous summary of the expenditure made during the programming periods 2000-2006 and 2007-2013 is included as a starting point, followed by a brief description of the general spending guidelines in the current period (2014-2020). Subsequently, a review of the works that have estimated the contribution of the European cohesion policy to the growth of Extremadura production and employment during the periods 1994-1999, 2000-2006, 2007-2013 and 2014-2020 is presented. As results, some of the quantifications existing in the literature on the economic effects of the different multiannual financial frameworks are systematized. The conclusions obtained highlight the importance of the European territorial cohesion policy for regions that, like Extremadura, are affected by important structural weaknesses that make their prosperity and competitiveness very difficult.

Keywords: cohesion policy; structural funds; operational programs; Extremadura

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Sergio Soza-Amigo, Patricio Aroca, José M. Rueda-Cantuche

The Development and Fields of Influence

By using OECD Input-Output in three different periods of time: mid-1990’s, beginning and end of the 2000’s, we discuss the evolution of their economic structures and their sectors along with a comparison among their structural similarities, measures by their Gross Domestic Product (GDP) per capita in purchaser’s power parities (ppp). Structural changes and similarities are discussed using fields of influence. The results revealed that economies tend to be stable in their structures depending on their level of development and the profusion of their fields of influence, with the exception of two countries with low GDP per capita but economic structures of developed countries.

Keywords: Analysis Input-Output; Fields of Influence (FoI); Structural Change

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José Luis Navarro-Espigares, José Aureliano Martín-Segura, César Pérez-López, Guillermo Maraver-Tarifa

Waste Management in the Spanish Municipalities: Is Commitment to Local Agenda 21 more than good Intentions?

Spain is one of the European countries with more municipalities adhering to the Local Agenda 21 (LA21). Environmental spending exerts a great influence on implementing LA21. But some authors raise doubts about the firm commitment of local governments to LA21 objectives.

Thus, the main objective of this paper is to verify whether political commitment is backed up with action towards meeting the objectives of sustainable development by means of budgetary support for waste management policies.

To accomplish this, we applied the Difference in Differences technique for the period 2002-2012 in the Spanish municipalities. Our initial results confirmed the original hypotheses and showed that local governments that adhered to LA21 were genuinely committed to achieving at least one LA21 goal and offering greater budgetary support for waste management. However, the sensitivity analysis revealed unexpectedly ambiguous evidence about the research question, in that we observed a great volatility of results depending on the sample and dependent variables chosen.

Keywords: Local Agenda 21; waste management; difference in differences

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Roldán Andrés-Rosales, Carlos Bustamante Lemus, Giovanna Saraí Ramírez Argumosa

Social Exclusion and Economic growth in the Mexican Regions: A Spatial Approach

The main purpose of this paper is to analyze the importance of social exclusion and its relationship to economic growth in the main Mexican regions. The principal components technique was used to build a multi-dimensional indicator based on the information provided by the Mexican Institute for Statistics and Geography (INEGI), by taking into account the main factors provoking such exclusion. An econometric inference on the regional growth was made using the spatial panel data to find the direct and indirect effects that it has on the social exclusion in the different regions of this country.

Keywords: social exclusion; spatial econometrics; economic growth

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María Concepción Peñate Valentín, María del Carmen Sánchez Carreira

Public Procurement of Innovation. A Regional Analysis of the Spanish Experience

Public sector could play a crucial role as consumer to foster innovation through public procurement of innovation (PPI). PPI is a R&D, innovation and development policy tool, which shows high potential and relevance in OECD economies. In comparison with other tools, its main advantages are guaranteeing a considerable launch market for innovations developed by the private sector, as well as reducing risks linked with new and expensive technologies. For the public sector, this tool improves the efficiency and quality of public services, and contributes to reduce costs in the medium and long term.

The main aim of this paper is to analyze the experience on PPI in Spain from a regional perspective, focused on types, funding, main sectors, areas of development, and results in products and services. Ninety cases are analyzed from an own-made database, in which a similar behavior among regions is noticed. Nonetheless, several differences are found regarding the relevance of sectors and European funding. Concerning the sectors, industry and services are the predominant activities in the most developed and innovative regions, highlighting knowledge-intensive activities. European funding constitutes a crucial element to implement PPI in less developed and innovative regions.

The results suggest that different levels of innovation and development determine the effectiveness of PPI and the development of innovations.

Keywords: public procurement of innovation; innovation policy; regional diversity; Spain

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Agustí Segarra Blasco

Subsidies, Loans and Tax Incentives for Business R&D in Catalonia

The aim of the study is to analyze the impact of public support on R&D investment among Catalan firms. The text approaches the analysis from a triple perspective. Firstly, it details the characteristics of Catalan firms that have benefitted from public support for R&D. Secondly, it establishes whether public support fulfills the principle of additionality and stimulates the innovative efforts of Catalan companies. And thirdly, it analyses whether support affects the composition of private investments in R&D. To address these issues, we have information provided by the questionnaires of the Community Innovative Survey (CIS) which, based on a sample of 3,410 Catalan firms, reflect the aid received during the period 2010-2012. A two-stage Heckman model is applied during the econometric development to correct sample selection bias. Of the results obtained, two stand out. On the one hand, public support produces a positive effect on the innovative efforts of Catalan firms; and on the other, government support alters the composition of the R&D investments of innovative Catalan firms in favour of the investments with lower risk and closer to the market.

Keywords: Public support for R&D, subsidies, loans, tax relief, private investments in R&D

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Jackeline Jiménez, Rafael Alvarado

Effect of Labor Productivity and Human Capital on Regional Poverty in Ecuador

The objective of this research is to examine empirically the relationship between labor productivity and human capital with regional poverty in Ecuador. In order to correct the bias caused by endogeneity and the omission of spatial dependence, we used regressions with instrumental variables and spatial econometric techniques. We estimated two sets of regressions. In the first, the dependent variable is the poverty rate and the independent variable is human capital. In the second, the poverty rate is a function of labor productivity. In both sets of models we include covariates associated with the social and economic characteristics of the regions. The results show that labor productivity and human capital can be public policy mechanisms to reduce poverty in less developed regions with spillover effects in neighboring regions.

Keywords: poverty; human capital; labor productivity; spatial econometrics

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Surveys and Debates

Majed Atwi, Ramón Barberán, Jesús Mur, Ana Angulo

CO2 Kuznets Curve Revisited: From Cross-Sections to Panel Data Models

The Environmental Kuznets Curve (EKC) predicts that environmental degradation intensifies when per capita income increases and subsequently subsides after a certain income level is reached, resulting in an inverted U-shaped relationship. There is abundant literature on the topic that corroborates the existence of a positive income elasticity for environmental quality. However, results are controversial.

We take the case of CO2, by comparing the results of the cross-sectional estimates with those derived from a panel approach. To this end, we use data from 182 countries during the period 1992-2011. We found that the EKC hypothesis is acceptable under both approaches, although the estimated turning points in cross-sections seem unreliable. Our application underlines the importance of adequately address central problems such as heterogeneity, structural breaks and spatial interaction.

Keywords: Kuznets environmental curve; CO2 emissions; spatial effects; structural breaks; heterogeneity

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Books reviews