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In this chapter, we investigate two-way causality between health and the hourly wage. We employ insights from the human capital and compensating wage differential models, a panel formed from the National Longitudinal Survey of Youth 1997, and dynamic panel estimation methods in this investigation. We adopt plausible specifications in which a change in health induces a change in the wage with a lag and a change in the wage induces a change in health, also with a lag. We uncover a causal relationship between two of the five measures of health and the wage in which a reduction in health leads to an increase in the wage rate in a panel of US young adults who had completed their formal schooling by 2006 and were continuously employed from that year through 2011. There is no evidence of a causal relationship running from the wage rate to health in this panel. The former result highlights the multidimensional nature of health. It is consistent with an extension of the compensating wage differential model in which a large amount of effort in one period is required to obtain promotions and the wage increases that accompany them in subsequent periods. That effort may cause reductions in health and to a negative effect of health in the previous period on the current period wage. In this framework, employees have imperfect information about the effort requirements of a particular job when they are hired, and employers have imperfect information about the amount of effort new hirers are willing to exert. The result is also consistent with a model in which investments in career advancement compete with investments in health for time – the ultimate scarce resource. The lack of a causal effect of the wage on health may suggest that forces that go in opposite directions in the human capital and compensating wage differential models offset each other.

This paper aims to examine the dynamic nexus between corporate governance (CG) and firm performance in hybrid model countries. It also investigates the effect of horizontal agency conflicts on CG adherence.

This research uses vector autoregression methods and dynamic panels to examine the cross-sectional and longitudinal association between CG and performance, using three CG adherence indexes of transparency, management and board governance. The data set includes annual market and firm performance data from a sample of 93 companies trading in the Mexican stock market for the period 2010–2016.

This study finds evidence of dynamic interdependence between CG and firm performance, as well as weak effects of CG adherence on firms’ performance. The adverse effect of increasing return on equity and return on assets (ROE-ROA) gaps on CG adherence, which results from agency conflicts and insider ownership, is likely behind the weak association between CG and firm performance.

The findings in this study provide evidence that hybrid systems weaken the nexus between CG and firm performance. The propensity to prefer banking and bond debt to issuing stocks, as indicated by a greater ROE-ROA gap, points to favorable provisions for majority shareholders, adverse normative environments for minority shareholders and a low level of compliance with CG measures, among other problems.

This paper seeks to contribute to the study of the link between financial intermediation and economic growth in the context of the European Union and particularly in the context of the integration of new member‐states.

Panel fixed and dynamic Arellano‐Bond estimates (with balanced panels) were used to explain and compare the influence of financial intermediation with the real per‐capita GDP growth in two sub‐sets of EU countries: the first one takes into account the availability of quarterly data and comprises 11 “old” EU countries, excluding Luxembourg, Denmark, Ireland and Sweden, for the period between Q2 1980 and Q4 1998; the second panel includes 24 EU countries (excluding only Luxembourg) for the period between Q2 1999 and Q4 2002. The existing empirical evidence was enhanced by introducing some financial variables to explain the real per‐capita GDP growth, namely, the real domestic credit growth, the real foreign liabilities growth, the real growth of the sum of the bonds and money market instruments, in addition to two ratios: bank assets/bank liabilities and domestic credit/bank deposits.

The results obtained confirm the importance of these variables to the real per‐capita GDP growth and allow one to draw conclusions on some differences in the behaviour and the level of integration of the two groups of EU countries. There is a relatively more homogeneous behaviour in the first panel, while the results for the second panel indicate that, in spite of the relative heterogeneity and the differences in their historical evolution, all the countries have had to adapt rapidly to the increasing competition and to the new EU market conditions.

The paper confirms the influence of financial systems on output growth, as well as the efforts of financial institutions to adapt to the new conditions of the European and global markets in spite of all the differences in the historical evolution and initial conditions among EU member‐states.

The paper attempts to empirically examine the difference in the foreign direct investment (FDI) – private investment relationship between developed and developing countries over the period 2000–2013.

The paper uses the two-step GMM Arellano-Bond estimators (both system and difference) for a group of 25 developed countries and a group of 72 developing ones. Then, the PMG estimator is employed to check the robustness of estimates.

First, there is a clear difference in the FDI – private investment relationship between developed countries and developing ones. Second, governance environment, economic growth and trade openness stimulate private investment. Third, the effect of tax revenue on private investment in developed countries is completely opposite to that in developing ones.

The paper is the first to provide empirical evidence to confirm the dependence of FDI – private investment relationship on governance environment. In fact, contrary to the view (arguments) in Morrissey and Udomkerdmongkol (2012), the paper indicates that FDI crowds out private investment in developed countries (good governance environment), but crowds in developing countries (poor governance environment).

This study aims to identify the most profitable segment of construction firms amongst real estate, industrial construction and infrastructure. This paper also examines the determinants of profitability of real estate, industrial construction and infrastructure firms.

The data of 67 firms (20 real estate, 21 industrial construction and 26 infrastructure) is collected for a 15-year period (2003–2017). Two models are created using total return on assets (ROA) and return on invested capital (ROIC) as dependent variables.. Leverage, liquidity, age, growth, size and efficiency of the firm are identified as firm-specific independent variables. Two economic variables, i.e. growth in GDP and inflation, are also used as independent variables. Initially, the models are tested for stationarity, multicollinearity and heteroscedasticity, and finally, the coefficients are estimated using Arellano–Bond dynamic panel data estimation to account for heteroscedasticity and endogeneity.

The results suggest that industrial construction is the most profitable segment of construction, followed by real estate and infrastructure. Their profitability is positively driven by liquidity, efficiency and leverage. The real estate firms are somewhat less profitable compared to industrial construction firms, and their profitability is positively driven by liquidity. The infrastructure firms have low ROA and ROIC.

The real estate, infrastructure and industrial construction drastically differ from each other. The challenges involved in real estate, infrastructure and industrial construction are altogether different. Therefore, authors present a comparative analysis of the profitability of real estate, infrastructure and industrial construction segments of the construction and compare their determinants of profitability. The results provided in the study are robust and reliable because of the use of a superior econometric model, i.e. Arellano–Bond dynamic panel data estimation with robust estimates, which accounts for heteroscedasticity and endogeneity in the model.

The purpose of this paper is to assess the impact of financial crises on the youth unemployment rate (YUR). The authors consider different types of financial crises (systemic banking crises, non‐systemic banking crises, currency crises and debt crises) and different groups of countries, according to their income level.

After a review of the existing (theoretical and empirical) literature on the determinants of the YUR in general and at the occurrence of economic crises, the authors present empirical estimations on the impact of past financial crises on young workers. The relationship between financial crises and YUR is investigated by employing fixed effects panel estimation on a large panel of countries (about 70) around the world for the period 1980‐2005. The “persistence” over time of the impact is also investigated. Finally the Arellano‐Bond dynamic panel is estimated, confirming the significance of the results.

According to the authors’ empirical estimates, two key results are relevant: financial crises have an impact on the YUR that goes beyond the impact resulting from GDP changes; and the effect on the YUR is greater than the effect on overall unemployment. The inclusion of many control variables – including in particular GDP growth – does not change the sign and significance of the key explanatory variable. The results suggest that financial crises affect the YUR for five years after the onset of the crises; however, the most adverse effects are found in the second and third year after the financial crisis.

Although fully aware of the peculiarities of the last crisis, the authors believe that the econometric results facilitate a better understanding of the impact of the 2007‐2008 financial crisis on the youth labour market.

The main policy implication is that effective active labour market policies and better school‐to‐work transition institutions are particularly needed to reduce the risk of persistence and structural (long‐term) unemployment, since young people have been worst affected by the last crisis.

There are many studies on the characteristics and causes of youth unemployment; considerable research has also been carried out into the labour market impact of financial crises. This paper brings the two strands of literature together, by econometrically investigating the impact of financial crises on YUR.

Applying the general question of aid effectiveness to the sector of education, this paper provides some evidence for a positive effect of development assistance on primary enrolment and completion. However, even the most optimistic estimates clearly show that at any realistic rate of growth, aid will never be able to move the world markedly closer towards the internationally agreed objective of “Education For All”. Universal primary education requires increased efficiency of educational spending by donors and national governments alike. Moreover, there is some evidence that the recipient countries' general political and institutional background matters. Under conditions of bad governance, the impact of aid on enrolment can actually turn negative.

We address the question of how the Internet promotes international trade volume, and especially, whether the global human resources affect the bilateral international trade during the technology development across countries.

A dynamic panel causality analysis is carried out to demonstrate empirically that the causality of the Internet diffusion on the international trade volumes. Evidence shows a significant positive effect of the Internet on international trade volume from time-series and cross-sectional regressions. Furthermore, the magnitude of elasticity is discussed.

There is strong evidence that the Internet stimulates international trade for all countries. Growth of trade volumes changes over time with heteroscedastic responses. The positive impacts of the growth of GDP are diluted by the growth of global human resources.

The data on the number of web hosts is not necessarily correlated to where the site is actually located. We contribute to the new Internet measurement which helps to explain the information transferring that stimulates the international trade and examine the global human resources.

The purpose of this paper is to assess the usefulness and efficiency of customer-based measures such as customer satisfaction (CSI) and perceived loyalty for monitoring and enhancing the financial performance in corporations.

General financial data for the empirical modeling is compiled from national and international databases (Alla Bolag, IMF/IFS, Bloomberg, Eurostat, etc.) and company-specific data from the studied corporation. Customer perception data (like CSI and loyalty) are taken from the Extended Performance Satisfaction Index-initiative database (annual observations for the period 2001-2014 and quarterly for 2008-2014). A hierarchy of structural models is devised on a combined time-series and cross-section (panel and multi-level) approach. The results are based on models estimated by Arellano–Bond procedures (Arellano and Bond, 1991).

The core findings are two. First, there is a strong positive relationship between customer-based measures and financial performance. Second, it is effective to regularly monitor CSI as a forward- looking indicator for understanding future financial performance.

Customer-based measures are highly useful as leading indicators of companies’ future performance and should be incorporated even more into corporate decisions.

According to this survey of contemporary research, very little is academically documented for the full-circle from corporate to branch level. Thus, the prevailing study should be of potential value for companies in general.

Between 2006 and 2012, Mexico implemented a “frontal war against organized crime”. This strategy increased criminal violence and triggered negative consequences across the country’s economic, political and social spheres. This study aims to analyse how the magnitude and visibility of criminal violence impact the housing market of Mexico City.

The authors used different violent proxies to measure the effect of the magnitude and visibility of violence in housing prices. The structure of the data set is an unbalanced panel with no conditions of strict exogeneity. To address endogeneity, the authors calculate the first differences to estimate an Arellano–Bond estimator and use the lags of the dependent variable to instrumentalise the endogenous variable.

Results suggest that the magnitude of violence negatively impacts housing prices. Similarly, housing prices are negatively affected the closer the property is to visible violence, measured through narcomessages placed next to the bodies of executed victims. Lastly, housing prices are not always affected when a violent event occurs nearby, specifically, when neighbours or potential buyers consider this event as sporadic violence.

There are only a few studies of violence in housing prices using data from developing countries, and most of these studies are conducted with aggregated data at the municipality or state level. The authors are using geocoded information, both violence events and housing prices, to estimate more disaggregated effects. Moreover, the authors used different proxies to measure different characteristics of violence (magnitude and visibility) to estimate the heterogeneous effects of violence on housing prices.