The global operations of European firms : the second EFIGE policy report

Europe's position in the post-crisis world economy depends on the ability of its firms to carry through effective global export and production strategies. New data from 15,000 firms in Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom show that firm size, productivity, skill intensity and the ability to innovate are associated with better export performance and internationalisation, either through foreign direct investment or outsourcing. Export and foreign production are complementary, particularly for entry into fast-growing emerging markets. But foreign production involves high entry costs and is extremely demanding in managerial, organisational and technological terms,. Firms can improve their competitive skills in the European single market, but competing in the next few years will require more than just exporting to neighbouring EU countrie

Short- and long-term growth effects of special interest groups in the U.S. states: A dynamic panel error-correction approach

The perception of special interest groups as a serious threat to economic growth has strengthened over the years; however, the vast empirical literature surrounding this claim has produced mixed and inconclusive results. This study re-examines the issue incorporating a potentially important aspect that has generally been ignored by previous studies, namely, the implicit suggestion by some of the theoretical works that the extent and the intensity of the growth effects of special interest groups may differ significantly over different time frames. Specifically, this study uses dynamic panel error-correction methods (Pesaran, Shin, and Smith (1999)) to properly determine whether these effects, if they exist, occur mostly in the short run or the long run based on data from a panel of 48 U.S. states for the years 1975 – 2004. The joint Hausman-type test selected the preferred model, which controls for human capital achievement, initial income, income inequality, and the tax burden. This model produced results which are in sharp contrast to the simple linearly negative or positive findings reported in much of the literature by indicating that special interest groups have significant non-linearly inverted U-shaped long-run effects on growth, and that it takes time (about 8 years) for the full effects to become evident. The results provide evidence that U.S. states face a threshold point below which special interest groups’ lobbying and rent-seeking activities boost long-run growth performance but above which they have damaging effects on long-run growth effort. This is confirmed by the Lind and Mehlum (2010) u-test which also suggests that the threshold point is reached when the activities and strength of special interest groups (measured by the percentage of each state’s public and private non-agricultural wage and salary employees who are union members, and which varies from 3.8% to 38.7%)) is at the 15.8% level

Trading Up the Happiness Ladder

How globalization affects happiness is highly disputed. Several studies use an index that amalgamates globalization's different dimensions into a single variable. Unlike previous studies and in order to better illuminate its facets, we adopt a disaggregated perspective on trade (policy) data. Distinguishing actual trade flows and the option value of trade, we find the former to slightly depress happiness, the latter to significantly promote happiness. Segmentation of WVS-data shows that the positive connotation is concentrated in low-income countries still in the process of climbing the income ladder, thus backing the notion of a shift in values

Effects of Psychological Distance on Mental Abstraction: A Registered Report of Four Tests of Construal Level Theory

Construal level theory (CLT) proposes that psychological distance influences the level of abstraction at which something is mentally construed: things perceived as less probable (likelihood) or further away from the here (spatial distance), now (temporal distance), or self (social distance) are thought about more abstractly. This international multi-lab study tests four basic hypotheses derived from core assumptions of CLT and explores potential moderators and boundary conditions of the effects. Participants (N = 11,775) from 27 countries and regions were randomly assigned to one of four experimental protocols focused on different types of psychological distance (temporal, spatial, social, or likelihood), and each experiment manipulated psychological distance (close vs. distant). The protocols for temporal distance (N = 2,941) and spatial distance (N = 2,973) were direct replications of Liberman and Trope (1998, Study 1) and Fujita et al. (2006, Study 1), respectively. The remaining two protocols were paradigmatic replications, applying to social distance (N = 2,926) and likelihood (N = 2,936). The effects of psychological distance on construal level for the four present studies were (original effects within parentheses; positive effects are consistent with hypotheses): dtemporal = 0.08, 95% CI [0.003, 0.16] (cf. d = 0.92); dspatial = 0.04, 95% CI [-0.03, 0.11] (cf. d = 0.55); dsocial = -0.27, 95% CI [-0.34, -0.19]; and dlikelihood = 0.03, 95% CI [-0.05, 0.11]. Pretests indicated that valence and abstraction were confounded in response options on the outcome measure. Controlling for this confound eliminated the hypothesis-inconsistent effect of social distance, d = 0.006, 95% CI [-0.05, 0.07]. These findings provide limited evidence for the predictions of the theory and present a critical challenge for CLT