A multi-level approach to test for the determinants of income polarization both at the household as well as the country level is applied to a panel of about 300,000 households in EU countries over the period of 2003-2009. Among the policy relevant macro variables, higher progressive labour taxation and to a certain extent capital taxation is positively correlated with lower levels of income polarization. Also public expenditures on social protection, education and economic subsidies are related to a lower degree of polarization. Finally, lower unemployment, a stronger industrial base and more ...more

German manufacturing firms increasingly engage in service trade activities. Micro-level data show that producer service exports of German manufacturers amounted to EUR 30 billion in 2005. In particular, construction, engineering and R&D services are exported. The machinery industries and automobile and chemicals producers dominate the overall pattern. The types of services exported vary strongly across industries. Furthermore, export activities are concentrated on a few large exporters. Service exports of advertising, data processing and R&D services are found to likely support foreign affiliat...more

While up to the 1990s, R&D was still ‘an important case of non-globalization’ (Patel and Pavitt 1991), the internationalization of business R&D activities has accelerated significantly during the past two decades. R&D activities of foreign affiliates have become one of the most dynamic elements of the process of globalization. Until recently, the main recipients of cross-border R&D expenditure were developed countries, though new players have emerged lately, particularly in Asia. Against that backdrop, the paper applies a recently compiled novel data set on R&D expenditure of foreign-owned fir...more

This paper examines the impact of offshoring on labour elasticities for a sample of 40 countries over the period 1995-2009 using the recently compiled World Input-Output Database (WIOD). Including measures of narrow and broad offshoring, as well as indicators of manufacturing and services offshoring, in conditional and unconditional labour demand equations we find that offshoring has an overall neutral or slightly positive effect on employment. This result hides differences across industry types and across employment types however, with additional results indicating a negative effect of services offshoring in many industry types. Positive effects of other offshoring measures are found in high-tech manufacturing and for high-educated employment in particular....more

A major international transmission channel of productivity increases is trade in intermediate products and services. This paper analyses international rent spillovers at the industry level and for the first time investigates effects from the service sector in this international framework. The World Input-Output Database (WIOD) allows us to improve over the traditional approach of using trade in intermediates in the estimation of international spillovers by making use of input-output linkages between industries in different countries. Our results using this novel approach confirm the productivi...more

Following the conclusion of the TRIPS Agreement, much has been written on the potential costs and benefits of stronger Intellectual Property Rights (IPRs) protection in terms of its impact on innovation and technology transfer, as well as economic growth and welfare. This paper documents the development of IPR regimes within countries and internationally, before surveying the theoretical and empirical literature linking the protection of IPRs to economic growth, innovation and technology diffusion....more

This paper examines the development of exports within the expanded European Union over the period 2000-2007. The paper addresses the issues of how and why within-bloc exports have developed following accession. The paper shows that exports within CEFTA and within other accession countries have grown more quickly than those between old EU members, but that after accounting for traditional gravity determinants there has been no significant change in this behaviour following accession in 2004. As such, this is likely to reflect a natural realignment of trade patterns following the communist era, as well as the relatively stronger performance of the new entrants when compared with existing EU members. The results also indicate that much of the increase in exports within the accession countries has been due to an increase in the variety of products traded, rather than an increase in the volume of existing products....more

In this paper we examine the link between international outsourcing – or offshoring – and the skill structure of labour demand for a sample of 40 countries over the period 1995 2009. The paper uses data from the recently compiled World-Input-Output-Database (WIOD) to estimate a system of variable factor demand equations. These data allow us to exploit both a cross-country and cross-industry dimension and split employment into three skill categories. Our results indicate that while offshoring has impacted negatively upon all skill levels, the largest impacts have been observed for medium-skilled (and to a lesser extent high-skilled) workers. Such results are consistent with recent evidence indicating that medium-skilled workers have suffered to a greater extent than other skill types in recent years....more

Similar to other countries in the European periphery, Kosovo lacks competitiveness, has adopted the euro as its national currency and started an integration process with the EU. The next milestone in this process is the signing of an FTA with the EU. We simulate full trade liberalization vis-à-vis the EU, using the Global Simulation Model. Our results suggest a slight output loss in almost all industries in Kosovo due to a drop in prices. Moreover the government budget is expected to lose about 5% of its revenues due to the tariff cut. A shift towards more direct taxation and measures aimed at improving the investment climate in Kosovo are recommended....more

During economic downturns, labour hoarding becomes an attractive human resource strategy if sizeable search and training costs render hiring and training new workers too costly. The paper sheds light on the prevalence and extent of labour hoarding in five New EU Member States and Turkey during the global financial crisis, which spread quickly like wildfire after the bankruptcy of Lehman Brothers in September 2008. It applies a unique firm-level panel, constructed by merging the World Bank Financial Crisis Survey (FCS) with the Business Environment and Enterprise Performance survey (BEEPs) and ...more