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Article
Publication date: 11 November 2019

Enrico Piero Marelli, Maria Laura Parisi and Marcello Signorelli

The purpose of this paper is to analyse whether several groups of European countries are on track for real “conditional” economic convergence in per capita income and the…

Abstract

Purpose

The purpose of this paper is to analyse whether several groups of European countries are on track for real “conditional” economic convergence in per capita income and the likely speed of convergence. The paper focusses also on the changes of the convergence processes over time.

Design/methodology/approach

Unlike the simple “absolute convergence”, it explores the concept of “conditional” or “club” convergence. Moreover, it adopts the approach of extending the univariate model to take into account the panel dimension over an extended time interval and endogeneity.

Findings

A process of real economic convergence has characterised the period under investigation (1995–2016), but, in general, the size and significance of the parameter is greater for the wide European Union (EU) area (EU25 and above) rather than the Eurozone (EZ). However, the crises occurred after 2008 caused most of such lower convergence in the Euro area.

Research limitations/implications

This paper gives an estimate of the speed/time needed to several groups of European countries (EZ, in particular) to achieve real economic convergence. Future research could further develop the “stochastic” convergence concept.

Originality/value

This is an analysis of convergence in enlarging EU and EZ for an extended period (including the big crisis period and the subsequent recovery). It shows that EZ experienced a drop in the speed of real convergence after 2008 and converge at lower speed than the EU. As a consequence, a specific budget for EZ would be important to provide adjustment mechanisms after potentially large shocks.

Details

Journal of Economic Studies, vol. 46 no. 7
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 19 October 2010

Enrico Marelli and Francesco Pastore

The purpose of this paper is to introduce the special issue on “Labour, productivity and growth”.

Abstract

Purpose

The purpose of this paper is to introduce the special issue on “Labour, productivity and growth”.

Design/methodology/approach

The paper discusses the articles in the special issue, which investigate the main theme – labour, productivity and growth – from different points of view by employing a variety of econometric methods. These include improvement of the evaluation of the impact of labour market flexibility on economic performance, analysis of the macroeconomic law of decreasing returns to labour, a new panel co‐integration method, and a reinterpretation of co‐integration analysis to assess the impact of incomes policy. Institutional variables, in particular the system of industrial relations, are duly considered.

Findings

The papers in the special issue highlight different causes of sluggish economic (productivity) growth in Europe, in the light of not only traditional macroeconomic variables, such as total factor productivity and labour market flexibility, but also such factors as neo‐corporatist industrial relations and management practices, which are generally neglected in the literature.

Originality/value

The paper introduces a number of articles proposing innovations in the interpretation and application of a wide range of theoretical approaches and econometric methodologies. It also discusses several policy suggestions for fighting sluggish productivity growth, including investment in research and development, human capital, flexicurity, innovative industrial relations practices and high‐performance workplace practices also considered capable of affecting macroeconomic performance.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 19 October 2010

Enrico Marelli and Marcello Signorelli

The purpose of this paper is to identify the main “models of growth” characterising the EU countries in the last two decades, with particular reference to the…

Abstract

Purpose

The purpose of this paper is to identify the main “models of growth” characterising the EU countries in the last two decades, with particular reference to the employment‐productivity relationship, and to reveal the key determinants of productivity.

Design/methodology/approach

After a survey of the relevant literature, the empirical section analyses the “models of growth” by graphical inspection, identifying four models (for EU‐27 in the 1990‐2008 period): extensive, intensive, virtuous, and stagnant. Then different econometric investigations (beta convergence, dynamic panel with GMM estimation, fixed effects panel, cross‐section) are used to test the “diminishing returns of employment rate” hypothesis (for the 2000‐2006 period), to assess the convergence processes and to determine the key variables affecting productivity.

Findings

The main finding is the confirmation of the hypothesis mentioned: high employment growth is likely to lead to slower productivity growth. Moreover, besides verifying the beta convergence of productivity per worker, the most significant determinants of productivity are the following: education, a transition index, some structural indicators, and a “shadow economy” proxy. Finally, the descriptive analysis shows that “old” EU countries, coming from two decades of “jobless growth”, shifted to an “extensive” growth model; in contrast, transition countries (NMS) followed the opposite path: reducing employment and raising productivity.

Research limitations/implications

It would be advisable to extend the period of the analysis, as soon as new data become available.

Practical implications

The main policy implication is to get the EU Lisbon strategy – i.e. to create “more and better” jobs – working effectively.

Originality/value

The most original finding is the clear assessment of an employment‐productivity trade‐off. Also, the different models of growth are categorised simply and effectively.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

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Article
Publication date: 23 March 2012

Misbah Tanveer Choudhry, Enrico Marelli and Marcello Signorelli

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

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Article
Publication date: 19 October 2010

Francesco Pastore

The Saint Valentine's Decree (1984) and the ensuing hard‐fought referendum (1985), which reduced the automatisms of scala mobile, started a process of redefinition of wage…

Abstract

Purpose

The Saint Valentine's Decree (1984) and the ensuing hard‐fought referendum (1985), which reduced the automatisms of scala mobile, started a process of redefinition of wage fixing in Italy, which culminated with the final abolition of scala mobile (1992) and the approval of Protocollo d'intesa (1993). Since then, following new corporatist principles, a national system of centralised wage bargaining (concertazione) and so‐called “institutional indexation” have governed the determination of wages. Does incomes policy generate greater coordination in the process of wage formation? Does it cause greater co‐movement of wages, prices, labour productivity and unemployment? This paper aims to answer these questions with reference to one of the G8 economies.

Design/methodology/approach

After testing for unit root each component by using the ADF, Phillips and Perron, DF‐GLS and Zivot and Andrews statistics, the paper tests for co‐integration the so‐called WPYE model using different methods. The Engle and Granger approach is used to assess the impact of incomes policy on the speed of adjustment of real wages, productivity (and unemployment) to their equilibrium value, while the Gregory and Hansen procedure serves as a means to endogenously detect the presence of a regime shift. The paper estimates coefficients before and after the structural break.

Findings

Incomes policy based on the 1993 Protocol has caused a regime shift in the process of wage determination. The long‐run estimates of the WPYE model do not generate stationary residuals except when a dummy for 1993 is added. The share of wages over GDP reduces by about ten percentage points in the early 1990s and has stood at about 57 per cent since 1995. The link with productivity is close to one‐to‐one only before the break. The feedback mechanism, as measured by the coefficient of lagged residuals in short‐run estimates, is increased from −0.46 in the pre‐reform to −0.79 in the post‐reform period, suggesting that incomes policy has increased real wage flexibility indeed. In recent years the link between real wages and (very low) labour productivity growth has weakened. In a sense, incomes policy has introduced a new form of (upward) wage rigidity. Last but not least, incomes policy has changed the correlation with the unemployment rate from positive to not statistically significant.

Research limitations/implications

Future developments will focus on disentangling the impact of incomes policy vis‐à‐vis other policy interventions on WPYE and on unemployment.

Practical implications

The analysis calls for a careful revision of the 1993 Protocol aimed at better protecting the purchasing power of real wages without losing control on inflation, and introducing growth‐generating mechanisms.

Originality/value

The paper studies the impact of incomes policy on WPYE and the Phillips curve by means of co‐integration and structural break analysis. It proposes to interpret the effect of incomes policy on the Phillips curve as changing the coefficient of the error correction mechanism that leads real wages to their long‐run equilibrium value.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 19 October 2010

Leonello Tronti

The purpose of this paper is to assess the role of the Protocol '93 bargaining model in favouring the slow‐down of the Italian economy and to design a correction.

Abstract

Purpose

The purpose of this paper is to assess the role of the Protocol '93 bargaining model in favouring the slow‐down of the Italian economy and to design a correction.

Design/methodology/approach

The impact of the Protocol on factor income distribution is assessed through a deterministic dynamic model, and tested for the 1993‐2008 period. The paper explores theoretically and empirically the weakening of the incentives for both workers and employers to engage in fostering productivity.

Findings

In a macroeconomic setting with structural imbalance between the product and the labour markets reforms, the bargaining model has automatically increased up to 2002 the capital share in income, reducing the incentives for both social partners to accelerate productivity, as the labour share in income and the propensity to invest are co‐integrated (Johansen test). An analytical solution for correcting the bargaining distributive bias is proposed.

Research limitations/implications

Further research should provide a picture of the different distributive behaviours of industrial sectors, particularly for industries exposed to/protected from international competition. The actual functioning of the new bargaining model (the Accordo Quadro of 2009) should also be assessed.

Practical implications

The bargaining model should be reformed so as to restore the right incentives for social partners. National industry‐wide wage bargaining should both incentivise and complement insufficient local bargaining.

Social implications

The benefit of increased productivity and resumed growth has vast social implications, especially with reference to the sustainability of the welfare system.

Originality/value

The scientific literature has lacked any formal description of the dynamic operation of the Italian bargaining model, which is particularly valuable to both social partners and policy makers.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 19 October 2010

Sergio Destefanis and Giuseppe Mastromatteo

The purpose of this paper is to assess the evolution of labour‐market performance in the Organization for Economic Co‐operation and Development (OECD) over the last…

Abstract

Purpose

The purpose of this paper is to assess the evolution of labour‐market performance in the Organization for Economic Co‐operation and Development (OECD) over the last decade, considering the robustness of the claims made in an important OECD follow‐up study.

Design/methodology/approach

The paper sets up an empirical framework calibrated on an important OECD follow‐up study, and suggests some ways in which the impact of unobserved heterogeneity and outliers on policy estimates can be treated in a cross‐section framework. The framework applies to the data for 30 OECD countries.

Findings

The paper finds that changes in labour‐market performance are inversely linked to lagged unemployment. Changes in the share of construction workers are also significant even in the presence of various kinds of policy change indicators. As far as the latter are concerned, the results highlight the role of unemployment benefits and, especially, active labour‐market policies.

Research limitations/implications

The kind of policy change indicators used do not allow the adoption of panel data techniques.

Practical implications

An important policy role seems to emerge for unemployment benefit reforms and, even more so, active labour‐market policies. The evidence also supports the contention that the construction sector is important for labour‐market performance.

Originality/value

The paper brings to the fore novel evidence about cross‐country labour‐market performance at a time when this issue is of high interest for citizens and policy‐makers.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 19 October 2010

Stefano Fachin and Andrea Gavosto

The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004.

Abstract

Purpose

The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004.

Design/methodology/approach

To this end, relying on recent developments in the analysis of non‐stationary dependent panels, the paper develops a new method for estimating total factor productivity (TFP) trends.

Findings

The conclusions confirm the view that the recent decline in Italian labour productivity growth is mostly due to a widespread fall in TFP growth.

Research limitations/implications

The main assumption underlying the proposed TFP estimation method is that technology growth is driven by a single trend common to all units included in the panel (industries, regions or countries).

Originality/value

The paper provides two distinct contributions: empirically, it provides robust evidence that TFP slow‐down is the main cause of recent negative trends in labour productivity in Italy. Methodologically, the paper proposes an approach to estimating TFP that enjoys several advantages: only basic data for input and output flows are needed, the non‐stationary nature of the data is explicitly taken into account, and confidence intervals for TFP growth can be computed. This method can thus be easily applied to many routinely available datasets, to either corroborate existing growth accounting estimates or to obtain previously unavailable estimates.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

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Article
Publication date: 19 October 2010

Annalisa Cristini and Dario Pozzoli

The purpose of this paper is to investigate the use of innovative workplace practices in a sample of manufacturing establishments.

Abstract

Purpose

The purpose of this paper is to investigate the use of innovative workplace practices in a sample of manufacturing establishments.

Design/methodology/approach

The sample comprises manufacturing establishments located in Italy and a comparable sample extracted from the British Workplace Employee Relations Survey (WERS). The paper controls for sector, size, skill quality and industrial relations.

Findings

Job rotation and technical training are positively associated with current performance in both samples. On average, British establishments are more productive: the different endowment in terms of workplace practices, skills and industrial relations accounts for 40 per cent of the gap, while the different efficacy of the endowment on performance accounts for the remainder.

Originality/value

In both samples the introduction of team working implies a relatively important advance along the reorganisation process, which was undertaken in the early stages of reorganisation in British establishments but much later in Italian firms. Linking the progression of the reorganisation to non‐convexities in supermodular production functions may be an interesting line of future research.

Details

International Journal of Manpower, vol. 31 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 29 October 2018

Enrico Baraldi, Francesco Ciabuschi, Olof Lindahl, Andrea Perna and Gian Luca Gregori

The purpose of this paper is to explore two specific areas pertaining to industrial networks and international business (IB). First, the authors look at how business…

Abstract

Purpose

The purpose of this paper is to explore two specific areas pertaining to industrial networks and international business (IB). First, the authors look at how business relationships influence the internationalization in time, from the establishment of the first subsidiary in a foreign market to the following ones, and in space, that is, across different markets. Second, the authors investigate how an increasing external network dependence of subsidiaries in their internationalization may cause a detachment of a subsidiary from the mother company as its knowledge becomes insufficient to guide a subsidiary’s internationalization.

Design/methodology/approach

This paper utilizes an exploratory, longitudinal, single-case study of Loccioni – a manufacturer of measuring and automatic control systems for industrial customers – to illustrate the specific dynamics of the influences of industrial networks on the internationalization of subsidiaries.

Findings

The case study helps to elucidate the roles, entailing also free will and own initiative, of small suppliers’ subsidiaries which operate inside several global factories, and how “surfing” on many different global factories, by means of several local subsidiaries, actually supports these suppliers’ own international developments. This notion adds to our understanding of the global factory phenomenon a supplier focus that stresses how the role of suppliers is not merely that of being passive recipients of activities and directions from a focal orchestrating firm, but can also be that of initiative-takers themselves.

Originality/value

The paper contributes to the IMP tradition by providing a multi-layered and geographically more fine-grained view of the network embedding companies that operate on internationalized markets. This paper thereby sheds light on a less investigated area of research within the IMP tradition: the link between internationalization in different countries and the interconnectedness between the industrial networks spanning these countries. At the same time, this paper contributes to IB theories by showing how a late-internationalizing SME can enter highly international markets by “plugging into” several established “Global Factories” as a way to exploit further opportunities for international expansion.

Details

IMP Journal, vol. 12 no. 3
Type: Research Article
ISSN: 2059-1403

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