Journal of Economic Studies

Arin, K. Peren; De Iudicibus, Alessandro; Sayour, Nagham; Spagnolo, Nicola

2024 Journal of Economic Studies

doi: 10.1108/jes-07-2023-0360

This study tests whether environmental awareness affects firm creation by using Google Trends data and a novel region-level data set from Italy.Design/methodology/approachForward-looking entrepreneurs drive firm creation. The authors hypothesize that more environmentally conscious entrepreneurs will emerge as environmental awareness rises, increasing the number of green and energy firms. The authors test the prediction using Google Trends data and a novel region-level data set from Italy.FindingsThe authors find that not only the number of green and energy-innovative firms but also that of all innovative start-ups increases with rising environmental consciousness. The results imply some “innovation spillover” effects from green sectors to other industries with rising environmental awareness.Originality/valueThe paper hypothesizes that as environmental awareness rises, more environmental-conscious entrepreneurs will emerge, which would increase the number of green and energy firms. Robustness and falsification tests are also offered.

Anderl, Christina; Caporale, Guglielmo Maria

2024 Journal of Economic Studies

doi: 10.1108/jes-06-2023-0289

The article aims to establish whether the degree of aversion to inflation and the responsiveness to deviations from potential output have changed over time.Design/methodology/approachThis paper assesses time variation in monetary policy rules by applying a time-varying parameter generalised methods of moments (TVP-GMM) framework.FindingsUsing monthly data until December 2022 for five inflation targeting countries (the UK, Canada, Australia, New Zealand, Sweden) and five countries with alternative monetary regimes (the US, Japan, Denmark, the Euro Area, Switzerland), we find that monetary policy has become more averse to inflation and more responsive to the output gap in both sets of countries over time. In particular, there has been a clear shift in inflation targeting countries towards a more hawkish stance on inflation since the adoption of this regime and a greater response to both inflation and the output gap in most countries after the global financial crisis, which indicates a stronger reliance on monetary rules to stabilise the economy in recent years. It also appears that inflation targeting countries pay greater attention to the exchange rate pass-through channel when setting interest rates. Finally, monetary surprises do not seem to be an important determinant of the evolution over time of the Taylor rule parameters, which suggests a high degree of monetary policy transparency in the countries under examination.Originality/valueIt provides new evidence on changes over time in monetary policy rules.

de Mello-Sampayo, Felipa

2024 Journal of Economic Studies

doi: 10.1108/jes-10-2023-0605

This survey explores the application of real options theory to the field of health economics. The integration of options theory offers a valuable framework to address these challenges, providing insights into healthcare investments, policy analysis and patient care pathways.Design/methodology/approachThis research employs the real options theory, a financial concept, to delve into health economics challenges. Through a systematic approach, three distinct models rooted in this theory are crafted and analyzed. Firstly, the study examines the value of investing in emerging health technology, factoring in future advantages, associated costs and unpredictability. The second model is patient-centric, evaluating the choice between immediate treatment switch and waiting for more clarity, while also weighing the associated risks. Lastly, the research assesses pandemic-related government policies, emphasizing the importance of delaying decisions in the face of uncertainties, thereby promoting data-driven policymaking.FindingsThree different real options models are presented in this study to illustrate their applicability and value in aiding decision-makers. (1) The first evaluates investments in new technology, analyzing future benefits, discount rates and benefit volatility to determine investment value. (2) In the second model, a patient has the option of switching treatments now or waiting for more information before optimally switching treatments. However, waiting has its risks, such as disease progression. By modeling the potential benefits and risks of both options, and factoring in the time value, this model aids doctors and patients in making informed decisions based on a quantified assessment of potential outcomes. (3) The third model concerns pandemic policy: governments can end or prolong lockdowns. While awaiting more data on the virus might lead to economic and societal strain, the model emphasizes the economic value of deferring decisions under uncertainty.Practical implicationsThis research provides a quantified perspective on various decisions in healthcare, from investments in new technology to treatment choices for patients to government decisions regarding pandemics. By applying real options theory, stakeholders can make more evidence-driven decisions.Social implicationsDecisions about patient care pathways and pandemic policies have direct societal implications. For instance, choices regarding the prolongation or ending of lockdowns can lead to economic and societal strain.Originality/valueThe originality of this study lies in its application of real options theory, a concept from finance, to the realm of health economics, offering novel insights and analytical tools for decision-makers in the healthcare sector.

Habis, Helga

2024 Journal of Economic Studies

doi: 10.1108/jes-11-2023-0640

Our result of this paper aims to indicate that the beta pricing formula could be applied in a long-term model setting as well.Design/methodology/approachIn this paper, we show that the capital asset pricing model can be derived from a three-period general equilibrium model.FindingsWe show that our extended model yields a Pareto efficient outcome.Practical implicationsThe capital asset pricing model (CAPM) model can be used for pricing long-lived assets.Social implicationsLong-term modelling and sustainability can be modelled in our setting.Originality/valueOur results were only known for two periods. The extension to 3 periods opens up a large scope of applicational possibilities in asset pricing, behavioural analysis and long-term efficiency.

Aiello, Francesco; Cardamone, Paola; Mannarino, Lidia; Pupo, Valeria

2024 Journal of Economic Studies

doi: 10.1108/jes-10-2023-0547

The purpose of this study is to investigate whether and how inter-firm cooperation and firm age moderate the relationship between family ownership and productivity.Design/methodology/approachWe first estimate the total factor productivity (TFP) of a large sample of Italian firms observed over the period 2010–2018 and then apply a Poisson random effects model.FindingsTFP is, on average, higher for non-family firms (non-FFs) than for FF. Furthermore, inter-organizational cooperation and firm age mitigate the negative effect of family ownership. In detail, it is found that belonging to a network acts as a moderator in different ways according to firm age. Indeed, young FFs underperform non-FF peers, although the TFP gap decreases with age. In contrast, the benefits of a formal network are high for older FFs, suggesting that an age-related learning process is at work.Practical implicationsThe study provides evidence that FFs can outperform non-FFs when they move away from Socio-Emotional Wealth-centered reference points and exploit knowledge flows arising from high levels of social capital. In the case of mature FFs, networking is a driver of TFP, allowing them to acquire external resources. Since FFs often do not have sufficient in-house knowledge and resources, they must be aware of the value of business cooperation. While preserving the familiar identity of small companies, networks grant FFs the competitive and scale advantages of being large.Originality/valueDespite the wide but ambiguous body of research on the performance gap between FFs and non-FFs, little is known about the role of FFs’ heterogeneity. This study has proven successful in detecting age as a factor in heterogeneity, specifically to explain the network effect on the link between ownership and TFP. Based on a representative sample, the study provides a solid framework for FFs, policymakers and academic research on family-owned companies.

Yebetchou Tchounkeu, Rostand Arland

2024 Journal of Economic Studies

doi: 10.1108/jes-06-2023-0306

This work aims to analyse the relationship between public health efficiency and well-being considering a panel of 102 Italian provinces from 2000 to 2016 and evaluates if there are omitted variable biases and endogeneity biases and also evaluates if there are heterogeneous effects among provinces with different income levels.Design/methodology/approachWe use a multi-input and output bootstrap data envelopment analysis to assess public health efficiency. Then, we measure well-being indices using the min-max linear scaling transformation technique. A two-stage least squares model is used to identify the causal effect of improving public health efficiency on well-being to account for time-invariant heterogeneity, omitted variable bias and endogeneity bias.FindingsAfter controlling for important economic factors, the results show a significant effect of an accountable and efficient public health system on well-being. Those effects are concentrated in the North, the most economically, geographically and environmentally advantageous areas.Research limitations/implicationsThe use of the sample mean, probably the oldest and most used method for aggregating the indicators, could be affected by variable compensation, with consequent misleading results in the process of constructing the well-being index. Another limitation is the use of lagged values of the main predictor as an instrument in the instrumental variables setting because it could lead to information loss. Finally, the availability of data over a long period of time.Practical implicationsThe findings could help policymakers adopt measures to strengthen the public health system, encourage private providers and inspire countries worldwide.Social implicationsThese results draw the attention of local authorities, who play an important role in designing and implementing policies to stimulate local public health efficiency, which puts individuals in the conditions of achieving overall well-being in their communities.Originality/valueFor the first time in Italy, a panel of well-being indices was constructed by developing new methodologies based on microeconomic theory. Furthermore, for the first time, the assessment of the relationship between public health efficiency and well-being is carried out using a panel of 102 Italian provinces.

Magazzino, Cosimo; Auteri, Monica; Schneider, Nicolas; Ofria, Ferdinando; Mele, Marco

2024 Journal of Economic Studies

doi: 10.1108/jes-02-2024-0066

The objective of this study is to reevaluate the correlation among pharmaceutical consumption, per capita income, and life expectancy across different age groups (at birth, middle age, and advanced age) within the OECD countries between 1998 and 2018.Design/methodology/approachWe employ a two-step methodology, utilizing two independent approaches. Firstly, we con-duct the Dumitrescu-Hurlin pairwise panel causality test, followed by Machine Learning (ML) experiments employing the Causal Direction from Dependency (D2C) Prediction algorithm and a DeepNet process, thought to deliver robust inferences with respect to the nature, sign, direction, and significance of the causal relationships revealed in the econometric procedure.FindingsOur findings reveal a two-way positive bidirectional causal relationship between GDP and total pharmaceutical sales per capita. This contradicts the conventional notion that health expenditures decrease with economic development due to general health improvements. Furthermore, we observe that GDP per capita positively correlates with life expectancy at birth, 40, and 60, consistently generating positive and statistically significant predictive values. Nonetheless, the value generated by the input life expectancy at 60 on the target income per capita is negative (−61.89%), shedding light on the asymmetric and nonlinear nature of this nexus. Finally, pharmaceutical sales per capita improve life expectancy at birth, 40, and 60, with higher magnitudes compared to those generated by the income input.Practical implicationsThese results offer valuable insights into the intricate dynamics between economic development, pharmaceutical consumption, and life expectancy, providing important implications for health policy formulation.Originality/valueVery few studies shed light on the nature and the direction of the causal relationships that operate among these indicators. Exiting from the standard procedures of cross-country regressions and panel estimations, the present manuscript strives to promote the relevance of using causality tests and Machine Learning (ML) methods on this topic. Therefore, this paper seeks to contribute to the literature in three important ways. First, this is the first study analyzing the long-run interactions among pharmaceutical consumption, per capita income, and life expectancy for the Organization for Economic Co-operation and Development (OECD) area. Second, this research contrasts with previous ones as it employs a complete causality testing framework able to depict causality flows among multiple variables (Dumitrescu-Hurlin causality tests). Third, this study displays a last competitive edge as the panel data procedures are complemented with an advanced data testing method derived from AI. Indeed, using an ML experiment (i.e. Causal Direction from Dependency, D2C and algorithm) it is believed to deliver robust inferences regarding the nature and the direction of the causality. All in all, the present paper is believed to represent a fruitful methodological research orientation. Coupled with accurate data, this seeks to complement the literature with novel evidence and inclusive knowledge on this topic. Finally, to bring accurate results, data cover the most recent and available period for 22 OECD countries: from 1998 to 2018.

Castelli, Chiara; Comincioli, Nicola; Ferrante, Chiara; Pontarollo, Nicola

2024 Journal of Economic Studies

doi: 10.1108/jes-11-2023-0620

The aim of this study is to investigate the contribution of tangible and intangible investments in driving labour productivity growth in the European Union over the period 2000–2017 and their role in the short and medium run. Additionally, heterogeneity across countries is accounted for by performing estimates separately for Eastern and Western European countries.Design/methodology/approachThe methodology used to conduct the analysis of the determinants of productivity is the two-way fixed-effect and the system generalised method of moments. We also include country-specific dummies in place of our variable on national innovative capacity as a means to further reduce the number of instruments.FindingsThe results reveal a long-term relationship of investment in intangible assets with labour productivity growth, more specifically of investment in R&D. This relationship holds both when considering the whole set of European countries and for Western European countries, demonstrating that R&D is key to enhancing labour productivity growth. On the contrary, the effect for Eastern countries is negative, probably due to the lack of capacity to turn this investment into an efficient and effective way to foster productivity.Originality/valueBesides confirming the well-known role of tangible and intangible assets in productivity, the heterogeneity shown in our analysis highlights the need for improving capabilities in Eastern countries. Diversifying the decisions on the investments in European countries, depending on the specific needs and their heterogeneity, could help bridge the productivity gap and enhance specific capabilities of the country systems.

Andreoli, Francesco; Prete, Vincenzo; Zoli, Claudio

2024 Journal of Economic Studies

doi: 10.1108/jes-01-2024-0016

This paper investigates one of the potential costs of rising segregation in American cities by evaluating empirically the extent at which ethnic-based segregation contributes to the onset and the speed of propagation of the COVID-19 pandemic.Design/methodology/approachRegression analysis based on matched data on early incidence of COVID-19 cases, segregation and covariates. Identification resorts on variations in segregation across MSAs and heterogeneity in the geography and timing of stay-at-home orders.FindingsOne cross-MSA standard deviation increase in segregation leads to a significant and robust rise of COVID-19 cases of 8.7 per 100,000 residents across urban counties.Originality/valueCombines spatial data on COVID-19 cases and segregation; use of a new segregation measure; focus on early incidence of the pandemic and its drivers.

Aiello, Francesco; Errico, Lucia; Rondinella, Sandro

2024 Journal of Economic Studies

doi: 10.1108/jes-02-2024-0094

This paper investigates whether and to what extent operating in inner areas affects the profitability of innovative Italian small and medium-sized enterprises (SMEs) over 2012–2018.Design/methodology/approachGuided by the National Strategy for Inner Areas and the “Investment Compact,” this study distinguishes between inner and core innovative SMEs. It employs various econometric models to estimate a regression for the return on assets of SMEs, differentiating between firms operating in inner and non-inner areas of northwest, northeast, centre and south Italy.FindingsFindings reveal that innovative SMEs in inner areas generally exhibit lower profitability compared to those in non-inner municipalities. However, huge heterogeneity in results is observed across the country. Specifically, innovative SMEs in the inner areas of the south register lower profitability than those operating in non-inner zones. Conversely, innovative SMEs located in the inner municipalities of northwest and northeast Italy show higher profitability than their peers in non-inner areas. The results imply that targeted policies for inner areas are crucial. However, due to the diversity of local impacts, a differentiated approach, depending on the geographic context, is necessary.Originality/valueThe study aims to explore the relationship between inner areas and the performance of innovative SMEs in Italy. More precisely, it examines the effect of operating in a municipality located within an inner area on the profitability of innovative SMEs. This issue has been overlooked in existing literature. Importantly, we aim to determine whether there is a heterogeneous impact based on geographical localisation, specifically in the Northwest, the Northeast, the Centre and the South of the country. Therefore, this paper contributes to the literature by investigating the factors influencing the performance of innovative SMEs and suggesting new policy recommendations for developing inner areas in Italy.