http://repub.eur.nl/res/concept/jel-O57/ Recent publications classified by JEL Code O57 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/38710/ 2012-12-01T00:00:00Z Regression analyses of cross-country economic growth data are complicated by two main forms of model uncertainty: the uncertainty in selecting explanatory variables and the uncertainty in specifying the functional form of the regression function. Most discussions in the literature address these problems independently, yet a joint treatment is essential. We present a new framework that makes such a joint treatment possible, using flexible nonlinear models specified by Gaussian process priors and addressing the variable selection problem by means of Bayesian model averaging. Using this framework, we extend the linear model to allow for parameter heterogeneity of the type suggested by new growth theory, while taking into account the uncertainty in selecting explanatory variables. Controlling for variable selection uncertainty, we confirm the evidence in favor of parameter heterogeneity presented in several earlier studies. However, controlling for functional form uncertainty, we find that the effects of many of the explanatory variables identified in the literature are not robust across countries and variable selections. Salimans, T. http://repub.eur.nl/res/pub/22337/ 2011-01-01T00:00:00Z Regression analyses of cross-country economic growth data are complicated by two main forms of model uncertainty: the uncertainty in selecting explanatory variables and the uncertainty in specifying the functional form of the regression function. Most discussions in the literature address these problems independently, yet a joint treatment is essential. We perform this joint treatment by extending the linear model to allow for multiple-regime parameter heterogeneity of the type suggested by new growth theory, while addressing the variable selection problem by means of Bayesian model averaging. Controlling for variable selection uncertainty, we confirm the evidence in favor of new growth theory presented in several earlier studies. However, controlling for functional form uncertainty, we find that the effects of many of the explanatory variables identified in the literature are not robust across countries and variable selections. Salimans, T. http://repub.eur.nl/res/pub/19841/ 2010-06-04T00:00:00Z In low and middle income countries road traffic accident fatalities will become in the near future one of the three major causes of death. Given that in particular the active population accounts for these fatalities, the potential economic implications are large, on the micro and the macro level. Yet, so far not much is known about the determinants and economic consequences of low road safety, in particular about the factors influencing road users’ behavior. Obviously this makes the design of interventions to prevent road traffic accidents and to care for the victims a serious challenge. The objective of this note is to summarize and review the existing knowledge on the determinants of road traffic accident fatalities, to identify the relevant research gaps in particular for low and middle income countries and to suggest ways to collect data and to conduct experiments that help to close these gaps. We also present a cross-country analysis of the determinants of road traffic accident fatalities that takes into account a wide range of potential environmental, economic and social factors. Grimm, M. Treibich, C. http://repub.eur.nl/res/pub/19363/ 2010-04-29T00:00:00Z The significant impact of international tourism in stimulating economic growth is especially important from a policy perspective. For this reason, the relationship between international tourism and economic growth would seem to be an interesting and topical empirical issue. The purpose of this paper is to investigate whether tourism specialization is important for economic development in 159 countries over the period 1989-2008. The results from panel threshold regressions show a positive relationship between economic growth and tourism. Instrumental variable estimation of a threshold regression is used to quantify the contributions of tourism specialization to economic growth, while correcting for endogeneity between the regressors and error term. The significant impact of tourism specialization on economic growth in most regressions is robust to different specifications of tourism specialization, as well as to differences in real GDP measurement. However, the coefficients of the tourism specialization variables in the two regimes are significantly different, with a higher impact of tourism on economic growth found in the low regime. These findings do not change with changes in the threshold variables. The empirical results suggest that tourism growth does not always lead to substantial economic growth. Chang, C.L. Khamkaew, T. McAleer, M.J. http://repub.eur.nl/res/pub/17667/ 2010-01-04T00:00:00Z European economic integration is commonly believed to be incomplete, and that further reforms are needed. In this context, the union of U.S. states is considered the benchmark of complete economic integration and is often the basis for comparison regarding the extent of E.U economic integration. Yet, with low trade barriers and with productive factors at least notionally mobile across E.U. countries, is the belief that U.S. states are more integrated than E.U. member states correct? To address this question, this paper first develops three theoretical predictions about the distribution of output and factors that would arise among members of a fully integrated economic area in which goods, capital and labor are freely mobile and policies are harmonized. These theoretical predictions are then empirically tested using data on the output and factor stocks of 14 E.U. member states and the 51 U.S. states (includes District of Columbia) for the period 1965 to 2000. The empirical results convincingly support each theoretical prediction. Hence, contrary to popular belief, the extent of E.U. economic integration is not statistically different from that among U.S. states. Bowen, H.P. Munandar, M.I.S.H. Viaene, J.M.A. http://repub.eur.nl/res/pub/17310/ 2009-11-24T00:00:00Z The significant impact of international tourism in stimulating economic growth is especially important from a policy perspective. For this reason, the relationship between international tourism and economic growth would seem to be an interesting empirical issue. In particular, if there is a causal link between international tourism demand and economic growth, then appropriate policy implications may be developed. The purpose of this paper is to investigate whether tourism specialization is important for economic development in East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, the Middle East and North Africa, North America, South Asia, and Sub-Saharan Africa, over the period 1991-2008. The impact of the degree of tourism specialization, which is incorporated as a threshold variable, on economic growth is examined for a wide range of countries at different stages of economic development. The empirical results from threshold estimation identify two endogenous cut-off points, namely 14.97% and 17.50%. This indicates that the entire sample should be divided into three regimes. The results from panel threshold regression show that there exists a positive and significant relationship between economic growth and tourism in two regimes, the regime with the degree of tourism specialization lower than 14.97% (regime 1) and the regime with the degree of tourism specialization between 14.97% and 17.50% (regime 2). However, the magnitudes of the impact of tourism on economic growth in those two regimes are not the same, with the higher impact being found in regime 2. An insignificant relationship between economic growth and tourism is found in regime 3, in which the degree of tourism specialization is greater than 17.50%. The empirical results suggest that tourism growth does not always lead to economic growth. Chang, C.L. Khamkaew, T. McAleer, M.J. http://repub.eur.nl/res/pub/18653/ 2009-10-01T00:00:00Z This article examines the global spillover of foreign product introductions and takeoffs on a focal country's time to takeoff, using a novel data set of penetration data for eight high-tech products across 55 countries. It shows how foreign clout, the susceptibility to foreign influences, and intercountry distances affect global spillover patterns. The authors find that foreign takeoffs, but not foreign introductions, accelerate a focal country's time to takeoff. The larger the country, the higher its economic wealth, and the more it exports, the more clout it has in the global spillover process. In contrast, the poorer the country, the more tourists it receives, and the higher its population density, the more susceptible it is to global spillover effects. Cross-country spillover effects are stronger the closer the countries are to one another, both geographically and economically, but not necessarily in terms of culture. The model the authors develop also quantifies the spillover between each country pair, allowing it to be asymmetric. Everdingen, Y.M. van Fok, D. Stremersch, S. http://repub.eur.nl/res/pub/21916/ 2009-09-01T00:00:00Z In this paper the relationship between a country’s prevalence of new ventures and its rate of economic growth is investigated, while taking into account new ventures’ export orientation. It is generally acknowledged that new venture creation as well as export activity may both be important strategies for achieving national economic growth. However, to our knowledge no attempt has been made to investigate empirically the role of export-driven new ventures in economic growth. We focus on the national level and use data for a sample of 34 countries over the period 2002–2008. Our results suggest that, on top of a positive relation between entrepreneurial activity in general and subsequent macroeconomic growth, there is an additional positive effect of export-oriented early-stage entrepreneurship in higher-income countries. However, there is no such additional effect in lower-income countries. Hessels, S.J.A. Stel, A.J. van http://repub.eur.nl/res/pub/16312/ 2009-01-01T00:00:00Z We estimate the empirical bimodal cross-section distribution of real Gross Domestic Product per capita of 120 countries over the period 1960–1989 by a mixture of a Weibull and a truncated normal density. The components of the mixture represent a group of poor and a group of rich countries, while the mixing proportion describes the distribution over poor and rich. This enables us to analyse the development of the mean and variance of both groups separately and the switches of countries between the two groups over time. Empirical evidence indicates that the means of the two groups are diverging in terms of levels, but that the growth rates of the means of the two groups over the period 1960–1989 are the same. Paap, R. Dijk, H.K. van http://repub.eur.nl/res/pub/13616/ 2008-10-24T00:00:00Z This article examines the global spill-over of foreign product introductions and takeoffs on a focal country’s time-to-takeoff, using a novel data set of penetration data for 8 high tech products across 55 countries. It shows how foreign clout, the susceptibility to foreign influences, and inter-country distances affect global spill-over patterns. The authors find that foreign takeoffs, but not foreign introductions, accelerate a focal country’s time-to-takeoff. The larger the country, the higher its economic wealth, and the more it exports, the more clout it has in the global spill-over process. In contrast, the poorer the country, the more tourists it receives and the higher its population density, the more susceptible it is to global spill-over effects. Cross-country spill-over effects are stronger the closer the countries are to one another, both geographically and economically, but not necessarily in terms of culture. The model the authors develop also quantifies the spill-over between each country-pair, allowing it to be asymmetric. Everdingen, Y.M. van Fok, D. Stremersch, S. http://repub.eur.nl/res/pub/14044/ 2008-08-29T00:00:00Z This paper addresses heterogeneity in determinants of economic growth in a data-driven way. Instead of defining groups of countries with different growth characteristics a priori, based on, for example, geographical location, we use a finite mixture panel model and endogenous clustering to examine cross-country differences and similarities in the effects of growth determinants. Applying this approach to an annual unbalanced panel of 59 countries in Asia, Latin and Middle America and Africa for the period 1971-2000, we can identify two groups of countries in terms of distinct growth structures. The structural differences between the country groups mainly stem from different effects of investment, openness measures and government share in the economy. Furthermore, the detected segmentation of countries does not match with conventional classifications in the literature. Basturk, N. Paap, R. Dijk, D.J.C. van http://repub.eur.nl/res/pub/15776/ 2007-04-01T00:00:00Z The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The objective of this paper is to explore how postmaterialism may explain these differences. A distinction is made between nascent entrepreneurship, new business formation and a combination of the two, referred to as total entrepreneurial activity, as defined within the Global Entrepreneurship Monitor (GEM). The model is also tested for the rate of established businesses. The measure for postmaterialism is based upon Inglehart’s four-item postmaterialism index. A set of economic, demographic and social factors is included to investigate the independent role postmaterialism plays in predicting entrepreneurial activity levels. In particular, per capita income is used to control for economic effects. Education rates at both secondary and tertiary levels are used as demographic variables. Finally, life satisfaction is included to control for social effects. Data from 27 countries (GEM, World Values Survey and other sources) are used to test the hypotheses. Findings confirm the significance of postmaterialism in predicting total entrepreneurial activity and more particularly, new business formation rates. Uhlaner, L.M. Thurik, A.R. http://repub.eur.nl/res/pub/15777/ 2007-04-01T00:00:00Z Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these 3 years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities. Wennekers, A.R.M. Thurik, A.R. Stel, A.J. van Noorderhaven, N. http://repub.eur.nl/res/pub/15778/ 2007-04-01T00:00:00Z The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The present paper offers some new thoughts about the determinants of entrepreneurial attitudes and activities by testing the relationship between institutional variables and cross-country differences in the preferences for self-employment as well as in actual self-employment. Data of the 25 member states of the European Union as well as the US are used. The results show that country specific (cultural) variables seem to explain the preference for entrepreneurship, but cannot explain actual entrepreneurship. The present paper also introduces the remaining four papers of the special issue of the Journal of Evolutionary Economics, which center around the theme Entrepreneurship and Culture. Freytag, A. Thurik, A.R. http://repub.eur.nl/res/pub/15791/ 2007-03-01T00:00:00Z We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. [Djankov et al. 2002, ‹The Regulation of Entry’, Quarterly Journal of Economics 117(1), 1–37] between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering. Stel, A.J. van Storey, D. Thurik, A.R. http://repub.eur.nl/res/pub/7853/ 2006-06-30T00:00:00Z The paper claims that the analysis of the private business sector needs to concentrate on entrepreneurship. Based on fieldwork the paper proceeds by describing how Chinese entrepreneurs perceive the (economic) problems whose solutions pre-determine the economic performance of new firms. Entrepreneurship takes the form of institution building by which the high transaction costs can be mitigated and the value of assets and contracts be protected. The empirical research identified corporate governance, incentive contracts, local autonomy and networking as the crucial “hybrids” for mobilising investment and limiting moral hazard. Krug, B. http://repub.eur.nl/res/pub/7854/ 2006-06-30T00:00:00Z The paper offers a frame for investigating the extent to which decentralisation, and subsequent locally chosen institutions shape private organisational and institutional innovation. To include the numerous locally based “economic regimes” matters as the resulting business system reflects political institution setting and private organisational innovation. Such a frame is a necessary first step for empirical studies attempting to explain the heterogeneity of China’s business systems, the emergence of hybrid organisations, and last but none the least, the different growth rates that can be observed across China. Krug, B. Hendrischke, H. http://repub.eur.nl/res/pub/7331/ 2006-02-06T00:00:00Z We advance a conceptual frame for explaining economic transformation in China that combines a dynamic and a comparative perspective by taking the analysis of Fiscal Federalism one step further. Using insights from the comparative business systems literature we show that devolution of power at the beginning of the reform process introduced local autonomy, which stimulated a diversity of local regulatory regimes. As the central political leadership is no longer the sole supplier of institutional change, local governments become equal contributors to the formation of local business systems. Yet, local governments only partially define emerging local business systems. Local governance at the enterprise level is defined by the interaction between political and economic entrepreneurship, or, phrased in institutional terms, local business systems emerge from the interplay between the formal architecture of local autonomy and the informal institution of networking. In a comparative perspective this interaction, and its underlying driving forces for co-operation, namely: procedural uncertainty, relational risk and institutional change, will lead to diversity in outcomes. In a dynamic perspective both market competition and networking will ensure further competition between business systems, while political unification, imitation or scale economies will ask for convergence of local business systems beyond the local nexus. Krug, B. Hendrischke, H. http://repub.eur.nl/res/pub/9704/ 2006-01-01T00:00:00Z Prepared for Journal of Evolutionary Economics (2007) Freytag, A. Thurik, A.R. http://repub.eur.nl/res/pub/11142/ 2005-08-01T00:00:00Z We address the question whether sub-Saharan African countries have lower average growth rates in real GDP per capita than countries in Asia, Latin and Middle America and the Middle East. In contrast to previous studies, countries are no a priori assigned to clusters based on geographical location. Instead, we propose a latent-class panel time series model, which allows a data-based classification of countries into clusters such that within a cluster countries have the same average growth rate. Our empirical results suggest that three clusters are sufficient to describe the different growth paths. Twenty-six African countries belong to the low growth cluster, but 8 African countries show growth rates comparable with many countries in Asia, Latin and Middle America and the Middle East. Paap, R. Franses, Ph.H.B.F. Dijk, D.J.C. van