absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth abstract this study examines the effects of foreign direct investment fdi and equity foreign portfolio investment efpi on economic growth using data on 80 countries from 1979 through 1998 the results largely suggest that lagged fdi and efpi do not have direct unmitigated positive effects on growth but some data are consistent with the view that the effects of fdi and efpi are contingent on the absorptive capacity of host countries with particular respect to financial or institutional development moreover extreme bound analysis eba of significant results indicates that the estimates are robust compared to other empirical studies on growth

the incidence of and returns to overeducation in the uk the 1991 wave of the british household panel survey is used to examine the extent of and the returns to overeducation in the uk about 11 of the workers are overeducated while another 9 are undereducated for their job the results show that the allocation of female workers is more efficient than the allocation of males the probability of being overeducated decreases with work experience but increases with tenure overeducated workers earn less while undereducated workers earn more than correctly allocated workers both the hypothesis that productivity is fully embodied and the hypothesis that productivity is completely job determined are rejected by the data it is found that there are substantial wage gains obtainable from a more efficient allocation of skills over jobs

foreign direct investment and total factor productivity growth new macro evidence although the role of foreign direct investment fdi in facilitating technology transfer is well known in the literature empirical evidence regarding the effect of fdi on growth is mixed the contradictory results in the literature may be due to the failure to account for endogeneity and for the abortive capacity of the hosting countries using panel data for 49 countries over the period 1974 2008 and the existence of investment promotion agencies in the receiving countries as an instrument our results show that increased fdi stock leads to higher productivity growth we also find a significant positive effect on the interaction between fdi stock and distance to the technological frontier suggesting that the ability of technologically backward countries in absorbing technologies developed at the frontiers increases as more fdi stock is accumulated

foreign direct investment and economic growth an increasingly endogenous relationship summary this paper investigates whether foreign direct investment fdi affects economic growth based on a panel of data for 84 countries over the period 1970 99 both single equation and simultaneous equation system techniques are applied to examine this relationship a significant endogenous relationship between fdi and economic growth is identified from the mid 1980s onwards fdi not only directly promotes economic growth by itself but also indirectly does so via its interaction terms the interaction of fdi with human capital exerts a strong positive effect on economic growth in developing countries while that of fdi with the technology gap has a significant negative impact

mismatch in the spanish labor market overeducation the objective of this article is to explain the job match which is assessed by comparing attained education and job required education as reported by workers we frame our empirical work according to the occupational mobility theory using a cross section of workers from a representative survey of the spanish labor force we consider overeducated workers to be those who report that the level of education their jobs require is below the level of education they have attained our results indicate that overeducated workers have less experience decreased on thejob training and higher turnover than other comparable workers we also observe an improvement in the job match over age and mobility

trade offs in energy and environmental policy abstract the energy sector is undeniably undergoing a critical period faced with multiple challenges whether economic political or technological these challenges are related to the requirements set on the sector to meet a wide range of social demands associated with the three traditional dimensions of a sustainable energy system i e environmental sustainability security of energy supply and economic sustainability in particular the environmental pillar has gained ground after the paris agreement which has reinforced the requirement of a low carbon transformation of the sector a main challenge is to balance trade offs among competing goals when designing energy and environmental policies although making the energy sector greener is a common aspiration of governments and many countries are indeed being successful in this regard the success comes at a price in terms of the other non environmental dimensions of a sustainable energy system the aim of this special issue is to look in detail on some of the most pressing environmental challenges faced by the energy sector as well as the trade offs involved in reaching a greener energy system

the impact of surplus schooling on productivity and earnings this article examines the impact of surplus schooling on individual productivity and earnings it proposes a model that divides workers education into two components education that is required and thus fully utilized in the job and education that exceeds the amount required and thus may be underutilized in the job the model is tested with data from the 1969 1973 and 1977 quality of working life surveys quinn and staines 1979 required schooling for each occupation is derived from estimates by job incumbents and by the dictionary of occupational titles the results show thqt surplus or underutilized education is rewarded at a lower rate than required education with the actual return dependent on the type of job

university quality and labour market outcomes this paper uses proxies for university quality derived from the research assessment exercise and the teaching quality assurance agency to assess the impact of university quality on the labour market outcomes of a cohort of uk graduates the impacts on job quality and earnings were mainly limited to graduates in particular disciplines or those obtaining poor degrees from good universities the results suggest that after controlling for pre entry qualifications labour market outcomes for most graduates depended more on the subject studied and degree classification awarded than on the university attended

foreign investment and productive efficiency the case of mexico this paper examines whether the relative performance of firms within mexican manufacturing industries varies systematically with the presence of foreign subsidiaries it also analyzes how foreign entry influences the technological structure in host country industries the findings suggest that 1 foreign presence in an industry is positively correlated with structural efficiency and 2 foreign entry is related to structural changes only in the modern part of the industries the most important source of spillover efficiency is found to be in the competitive pressure induced by the foreign firms i introduction a widely held view among economists studying foreign investment is that one of the important contributions to the host country is likely to stem from external effects or spillovers the spillovers can be of different kinds the foreign firms may influence the productivity and growth of the domestically owned firm they may change the nature and evolution of concentration they may alter financing marketing and technological and managerial practices in the industries that they enter et cetera because of great methodological difficulties in investigating these effects empirically in addition to lack of data few empirical investigations appear in the literature three available econometric studies deal with the influence of foreign investment on the technical efficiency of host country firms one focuses on australia caves 1974 one on canada globerman 1979 and one on mexico blomstrom and persson 1983 all three find some support for the spillover benefit hypothesis but none of the studies analyzes the nature of spillover efficiency in depth the present paper is an attempt to identify through what mechanisms the spillover efficiency of foreign investment takes place by analyzing the effects of foreign investment on the productive efficiency of the industrial structure in mexico we will examine whether the relative performance of firms within an industry varies systematically with the presence of foreign subsidiaries we will also analyze the impact of foreign investment on structural change that is how foreign entry influences the technological structure in host country industries

overeducation job mobility and earnings mobility among holders of first degrees abstractovereducation has been researched extensively for nearly three decades but some major issues in regard to it are still topics of ongoing debate by using a panel data that combines a survey of two cohorts of israeli first degree holders and data from administrative sources on jobs and wages we examine the contribution of job turnover cognitive abilities and continuing graduate studies to the likelihood of overeducation and wage dynamics the study produces four main findings first rapid job switching makes a negative contribution to the increase in employee s wage and there is a negative correlation between two variables an employee s tenure and the number of past employers in the years after the completion of degree studies and the probability of being overeducated second the contribution of the individual s cognitive abilities and quantitative reasoning skills to the likelihood of becoming overeducated is negative third the wages of overeducated employees are some 11 lower and ris

troubled banks impaired foreign direct investment the role of relative access to credit during the 1980 s theories were developed to explain the striking correlation between real exchange rates and foreign direct investment fdi however this relationship broke down for japanese fdi in the 1990 s as the real exchange rate appreciated while fdi plummeted we propose the relative access to credit hypothesis and show that unequal access to credit by japanese firms contributes to the explanation of declining japanese fdi using bank level and firm level data sets we find that financial difficulties at banks were economically and statistically important in reducing the number of fdi projects by japanese firms into the united states jel g21 f36

a techno economic analysis of eu renewable electricity policy pathways in 2030 the aim of this paper is to assess several pathways of a harmonised european policy framework for supporting renewable electricity res e in a 2030 horizon according to different criteria the pathways combine two main dimensions degrees of harmonisation and instruments and design elements a quantitative model based analysis with the green x model is provided the results of the simulations show that there are small differences between the evaluated cases regarding effectiveness all the policy pathways score similarly with respect to res e deployment i e with different degrees of harmonisation and whether using a feed in tariff a feed in premium a quota system with banding or a quota without banding scheme in contrast the policy costs clearly differ across the pathways but the differences can mostly be attributed to the instruments rather than to the degrees of harmonisation this is also the case with other criteria static and dynamic efficiency and the socioeconomic and environmental benefits in terms of co2 emissions and fossil fuels avoided both the degree of harmonisation and the choice of instrument influence the distribution of support costs across countries finally our findings suggest that keeping strengthened national support leads to similar results to other policy pathways

multinational firms and technology transfer the authors construct an oligopoly model in which a multinational firm has a technology superior to those of local firms in the host country workers employed by the multinational acquire knowledge of the superior technology and can spread their knowledge to local firms by switching employers the multinational chooses to pay a wage premium to prevent local firms from hiring away its workers if the local firms are sufficiently disadvantaged or if there are enough local firms diffusion of the superior technology benefits local firms at the expense of workers whose wages suffer the host government might have an incentive to attract foreign direct investment even when technology transfer will not result because of the wage premium local employees of the multinational firm earn also foreign direct investment with technology transfer may reduce the total economic rent the host country earns

growth effect of foreign direct investment in developing economies the role of institutional quality this paper investigates the effect of foreign direct investment fdi on economic growth conditional on the institutional quality of host countries we first develop several theoretical arguments to show that institutional heterogeneity may be an explanation for the mixed results of previous empirical studies second using a panel smooth regression model on a large sample of developing countries we show that fdi has a positive effect on growth only beyond a certain threshold of institutional quality to benefit from fdi led growth institutional reforms should thus precede fdi attraction policies additionally some reforms seem to promote faster marginal effects of fdi while institutional complementarities may lead to an incremental effect on growth

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

renewable energy policies in europe converging or diverging abstract nations today are urgently challenged with achieving a significant increase in the deployment of renewable energies in europe that need has given rise to a debate about the most effective and efficient support strategy whilst the different interests debate whether full european harmonisation or strengthening of national support policies for electricity from renewable energy sources res e is the best way forward individual national support schemes are rapidly evolving this study investigates how the eu member states have applied support policy types over the last decade by identifying predominant developments in the application of feed in tariffs premiums tradeable green certificates tax incentives investment grants and financing support for specific technologies wind biomass pv this study shows that europe is currently experiencing certain tendencies towards a bottom up convergence of how national policy makers design res e policy supports while some outliers remain the policy supports of most countries become more similar in the policy types applied dominance of feed in tariffs and in their scope of implementation differentiation for installation sizes and stacking of multiple instruments these trends in national decision making which show tendencies of convergence could make an eu driven top down harmonisation of support either dispensable or at least depending on the agreement less controversial

host country reforms and fdi inflows how much difference do they make summary this study examines the effects of various policies on foreign direct investment fdi flows from the perspective of the eclectic theory of international investment and hence the advantages of foreign ownership host country location and internationalization host country policies can influence fdi flows primarily through their influence on the advantages of location in the host country pooled cross section and time series data for 49 less developed countries ldcs over 1970 95 are used to examine the effects of several different types of policy institutional variables including corporate tax rates tariff rates the degree of openness to international capital flows exchange rate distortions contract enforcement nationalization risk bureaucratic delay and corruption a multivariate analysis of the effects on fdi flows of each type of policy with and without controls for other relevant determinants is conducted two different sources of fdi data are employed as well as two different measures of capital controls although there are methodological problems in estimation and especially collinearity problems and relatively severe availability constraints for some of the relevant measures the results demonstrate the relevance and importance for fdi flows of many of the policy institutional variables under study they also indicate that the results from panel methods yield results that differ rather significantly from those obtained from pure cross section analysis because of complementarity between the various elements of a healthy investment climate the effects of some policy reforms estimated from models which do not control for changes in other policies may overstate the effectiveness of individual policy reforms

graduate overeducation as a sheepskin effect evidence from northern ireland this article examines the nature of graduate overeducation amongst a group of applicants to a graduate conversion programme it was found that while a substantial proportion of earnings differentials were associated with a mismatch between individual skill levels and job requirements wage gaps were still likely to occur should such mismatches be eliminated the evidence suggests that graduate wage levels are heavily related to sheepskin effects associated with the attainment of jobs with graduate level entry requirements these sheepskin effects suggest that the process of job categorization is arbitrary in nature with stated job requirements somewhat independent of actual skill requirements the analysis suggests that graduate overeduction is better understood within the context of both skill and categorization mismatches as opposed to skill matches alone

double penalty in returns to education informality and educational mismatch in the colombian labour market abstractthis article examines the returns to education taking into consideration the existence of educational mismatches in the formal and informal employment of a developing country results show that the returns of surplus required and deficit years of schooling are different in the two sectors moreover they suggest that these returns vary along the wage distribution and that the pattern of variation differs for formal and informal workers in particular informal workers face not only lower returns to their education but suffer a second penalty associated with educational mismatches that puts them at a greater disadvantage compare to their formal counterparts

harmonization of renewable electricity feed in laws in the european union this paper focuses on the harmonization of feed in laws in the european union as a support mechanism for the promotion of renewable electricity in particular it proposes a methodology for harmonization based on a feed in law with a modular and transparent premium for renewable electricity producers this premium considers technology costs some grid services political incentives and national priorities the proposed approach includes flexibility mechanisms to update and revise premiums to avoid windfall profits for producers and to share technology innovation benefits with electricity consumers while maintaining incentives for innovation our approach is based on the review of the main features of the german and spanish feed in laws and takes into account other necessary considerations for harmonization such as grid access funding definitions and standards ownership of rights derived from renewables and exceptions for small non commercial producers and energy intensive industries

overeducation in the labor market this article examines the reasons for the observed discrepancy between workers actual and required levels of schooling and the resulting differences in returns to schooling overeducated workers are found to be younger and to have lower amounts of on the job training than workers with the required level of schooling they also have higher rates of firm and occupational mobility characterized by movement of higher level occupations the findings suggest that overeducation can be explained by the trade off between schooling and other components of human capital and by the mobility patterns of overeducated workers

overeducation in the labour market abstract this paper presents a review of the literature on overeducation the paper assesses the consistency of overeducation within the context of a number of theoretical frameworks including human capital theory hct and assignment theory the analysis goes on to discuss the various measurement controversies associated with the study of overeducation in order to provide an assessment of the extent to which the impacts of the phenomenon represent an economic reality as opposed to a statistical artefact after reviewing the literature it is concluded that the impacts of overeducation are likely to be non trivial and that the phenomenon may potentially be costly to individuals and firms as well as the economy more generally the existence of overeducation also raises some doubts with respect to the validity of some of the central assumptions and predictions of hct that are unlikely to be fully explained by gaps in the standard wage equation framework

the pattern of direct foreign investment and economic growth abstract this paper examines the relationship between the sectoral pattern of direct foreign investment dfi and growth using theoretical and empirical analysis the theoretical analysis suggests that different patterns of dfi because of their differential effects on the north south terms of trade and on southern technological development can be expected to affect growth in host countries differently the empirical analysis using crosscountry growth equations however is unable to detect any effects of the pattern of dfi on growth it is argued that detailed case studies of particular countries would be valuable for exploring the empirical issues involved

foreign direct investment regulations and growth this paper explores the linkage between income growth rates and foreign direct investment fdi inflows so far the evidence is rather mixed as no robust relationship between fdi and income growth has been established the authors argue that countries need a sound business environment in the form of good government regulations to be able to benefit from fdi using a comprehensive data set for regulations they test this hypothesis and find evidence that excessive regulations restrict growth through fdi only in the most regulated economies this result holds true for different specifications of the econometric model including instrumental variable regressions

foreign direct investment in oecd countries a special focus in the case of greece foreign direct investment fdi is considered as an important instrument for economic development all over the world the aim of this paper is to examine the fdi inflows determinants for 24 oecd co

overeducation undereducation and the british labour market this paper addresses the issue of overeducation and undereducation using for the first time a british dataset which contains explicit information on the level of required education to enter a job across the generality of occupations three key issues within the overeducation literature are addressed first what determines the existence of over and undereducation and to what extent are over and undereducation substitutes for experience tenure and training second to what extent are over and undereducation temporary or permanent phenomena third what are the returns to over and undereducation and do certain stylized facts discovered for the us and a number of european countries hold for britain

a note on aggregation of skills and labor quality we use a unique new data set that combines data on individual workers and their employers to estimate marginal productivity differentials among different types of workers we then compare these to estimated relative wages leading to new evidence on

the heckman correction for sample selection and its critique this paper gives a short overview of monte carlo studies on the usefulness of heckman s 1976 1979 two step estimator for estimating selection models such models occur frequently in empirical work especially in microeconometrics when estimating wage equations or consumer expenditures it is shown that exploratory work to check for collinearity problems is strongly recommended before deciding on which estimator to apply in the absence of collinearity problems the full information maximum likelihood estimator is preferable to the limited information two step method of heckman although the latter also gives reasonable results if however collinearity problems prevail subsample ols or the two part model is the most robust amongst the simple to calculate estimators

cost effects of international trade in meeting eu renewable electricity targets abstract the european market for renewable electricity received a major stimulus from the adoption of the directive on the promotion of renewable electricity the directive specifies the indicative targets for electricity supply from renewable energy sources res e to be reached in european union eu member states in the year 2010 it also requires member states to certify the origin of their renewable electricity production this article presents a first eu wide quantitative evaluation of the effects of meeting the targets using an eu wide system for tradable green certificates tgc we calculate the equilibrium price of green certificates and identify which countries are likely to export or import certificates cost advantages of participating in such an eu wide trading scheme are determined for each of the member states moreover we identify which choice of technologies results in meeting targets at least costs results are obtained from a model that quantifies the effects of achieving the res e targets in the eu with and without trade the article provides a brief insight in this model as well as the methodology that was used to specify cost potential curves for renewable electricity in each of the 15 eu member states model calculations show that within the eu wide tgc system the total production costs of the last option needed to satisfy the overall eu res e target equals 9 2 eurocent kwh assuming that the production price of electricity on the european power market would equal 3 eurocent kwh in the year 2010 the indicative green certificate price equals 6 2 eurocent kwh we conclude that implementation of an eu wide tgc system is a cost efficient way of stimulating renewable electricity supply

the policy implications of the different interpretations of the cost effectiveness of renewable electricity support abstract the cost effectiveness of support for renewable electricity is a main criterion to assess the success of policy instruments together with effectiveness the costs of support are also a source of significant concern for governments all over the world however significant confusion exists in the literature on the cost effectiveness of public support for renewable electricity while some authors define the concept of cost effectiveness as that which complies with the equimarginality principle many others including documents from relevant organisations european commission international energy agency intergovernmental panel on climate change define it as the lowest costs of support generally equating it with the minimisation of consumer costs the aim of this paper is to clarify the differences between both approaches and their policy implications regarding the choice of instruments and design elements it is shown that they partly overlap and that their policy implications clearly differ leading to very different policy prescriptions while the former favours technology neutral instruments and design elements the minimisation of consumer costs approach favours instruments and design elements which adjust support levels to the costs of the technologies

international investment location decisions abstract in international location tournaments governments compete for foreign investment with tax and other short run incentives such tournaments can be won if agglomeration economies are sufficiently powerful to overcome investors desire to spread investments as a hedge against risk we focus on manufacturing investments by u s multinationals in the 1980s our econometric results suggest that agglomeration economies are indeed the dominant influence on investor calculations paradoxically short run incentives have limited apparent impact on location choice we conclude that high cost tournament play is unnecessary for countries with good infrastructure development specialized input suppliers and an expanding domestic market