Blanca Sanchez-Robles

INFRASTRUCTURE INVESTMENT AND GROWTH: SOME EMPIRICAL EVIDENCE

This paper explores empirically the relationship between infrastructure and economic growth by including the data of expenditure in infrastructure as a share of GDP in traditional growth cross�?country regressions. Since results are inconclusive, the paper elaborates some new indicators of investment in infrastructure employing physical units of infrastructure. They are positively and significantly correlated with growth in two different samples of countries.

Does equality reduce growth? Some empirical evidence

This study intends to provide some empirical evidence on the connection between equality and growth. Accordingly, two different samples of countries have been explored over the last three decades using panel data. In the first subsample, encompassed by medium income nations, the relationship between equality (proxied by the Gini index) and growth seems to be hump shaped. In the second subsample, made up by high-income countries, the connection is unambiguously negative – more equality is detrimental for growth. These results suggest that the impact of equality on growth may be different at the various stages of development.

Macroeconomic stability and economic growth: the case of Spain

Recent contributions have pointed out to a beneficial effect of macroeconomic stability and market liberalization on economic growth. This paper analyses this issue empirically by means of cointegration techniques, using annual data from the Spanish economy, 1962-95. Some proxies of macroeconomic instability - such as inflation, public deficit and various types of public expenditure as a share of GDP - and market distortions are included in the equations as regressors. The results show a negative correlation of these proxies and economic growth. Therefore, the Spanish experience suggests that macroeconomic stability and market liberalization are prerequisites for economic growth.

Financial efficiency and economic growth: The case of Spain

This paper explores the connection between financial efficiency and economic growth. First, a theoretical model is presented in which financial efficiency enhances economic growth by means of increasing the marginal productivity of a broad concept of capital. Next, some data from the Spanish economy from 1962 to 1995 are explored using cointegration techniques. The main results point to a prominent role of bank institutions in channeling funds from savings to investment. Operative inefficiency of banks has damaged economic growth by providing a smaller amount of funds to the process of development. These results also suggest the existence of imperfections in Spanish capital markets. Finally, some indicators of financial repression such as negative interest rates and inflation seem to have had a deleterious impact on economic growth.

Convergence or Twin Peaks: The Spanish Case

This paper aims to explore the Spanish geographical dynamics of per capita income among provinces, during the period 1955-1997. First, we obtain some preliminary evidence of their behavior over time from the visual inspection of their non-parametric density distributions. These distributions turn to be unimodal in virtually all cases. Next, we compute the transition matrices and the long run equilibria by means of the Markov Chains approach, (along the lines of the contributions of Quah). Basic outcomes of this analysis also tend to predict a patter of convergence among provinces for the period 1955-97. Therefore, and according to these results, the existence of twin peaks in Spanish income distribution does not seem to be supported by the empirical evidence presented here. Other tentative conclusions of the paper are the high level of persistence in the relative position of provinces, consistent with a low degree of mobility in the income distribution. Notwithstanding this fact, the paper detects some particular changes in the placement of provinces according to their per capita income. More specifically, the richest provinces tend to concentrate gradually in the North-East of the country, which may be attributed, in turn, to externalities linked to localization or to the proximity to the rest of Europe. Sectoral reallocation to the industrial sector also seems to have fostered growth of per capita income in those provinces that have experienced it over time.

R&D and Growth in the Spanish Regions: An Empirical Approximation

This paper intends to analyze some features about R&D activities in the recent past in Spain, at the national and regional level. The comparison of some R&D indicators from Spain and other developed countries suggests that Spain is lagging behind especially in terms of the allocation of resources to R&D from the business sector and also in generation of patents. As far as regional behavior is concerned, R&D is concentrated in several regions which are at a remarkable distance from the rest. Finally, we estimate a panel data model linking economic growth to R&D indicators and other variables for the Spanish regions over the years 1995-2008. Main results suggest that total R&D intensity has a positive impact on growth. When R&D is disaggregated according to the type of investor, business R&D has a positive and significant impact on growth. The impact of public and university R&D activities are not significant.

Does Equality Reduce Growth? A Theoretical Justification

This paper designs a simple model that intends to explain theoretically a strange empirical regularity documented by some researchers: more equality reduces growth in rich countries. The main point of the model is to include equality as an argument that increases utility of the representative agents. The model does predict a negative link between equality and growth. The intuition is as follows: more public funds devoted to social programs intended to reduce inequality may crowd out other productive activities, thus damaging per capita growth. In other words, an excessive level of equality in society (especially if it is achieved by Social Welfare programs) may not be optimal from the point of view of growth.

Sectoral structure and real convergence among Spanish regions

This paper intends to carry out some empirical investigation about the link between sectoral structure and real convergence for the case of Spain. First, this paper pursues a descriptive analysis by means of decomposing the variation of productivity in a share effect and a growth effect. This approach is complemented with a panel data estimation. It is found that, despite some tendency toward sectoral homogenization, there are still large productivity differentials among sectors and regions. Other basic findings point out the reallocation of inputs from agriculture to services as a relevant force explaining convergence among Spanish regions in the last decades. There is also some evidence of a catching-up effect in the services sectors, whereas this effect is not detected in the industry sector.

The Relationship between Economics and Psychology in Robbins

Attempts to express certain views about the relationship that Robbins advocates between economics and psychology. Develops two main conclusions: first, Robbins maintains that economic theories are independent of psychological theories, even in those cases in which the economist has tried to present his economic conclusions as grounded on specific psychological theories. This procedure, however, is greatly misleading and can damage the autonomy of economics, making it dependent on the particular theories that are provided to explain human behaviour. At the same time, Robbins defends the view that economics should not be entirely deprived of certain references to psychological or subjective notions. A positivistic attitude as the one that tries to avoid this sort of concept can be the result of a behaviouristic approach to economic science, distrusted by the British economist. It can also be fostered by an empiricist and monistic view of economics, according to which only observable data can be employed as ...

Back to BITs and Bites: Do Trade and Investment Agreements Promote Foreign Direct Investment within Latin America?

In this paper we investigate the impact of regional trade agreements (RTAs) and bilateral investment treaties (BITs) on intra-regional foreign direct investment (FDI) across Latin American countries from 1995 to 2012. We use an augmented gravity model in which we control for cross-country heterogeneity, multilateral resistances and endogeneity of RTAs/BITs. This study empirically reveals that belonging to a well-established RTAs, such as MERCOSUR, is significantly more effective than the enforcement of BITs in fostering intra-regional FDI. We observe heterogeneous impacts within the bloc: BITs exert a positive but small effect, with an estimated increase in FDI stocks between 4-7.25%, for middle income countries such as Argentina, Brazil, Chile, Costa Rica, Mexico and Uruguay. However, we observe a non-significant effect on middle-low income countries as Bolivia, Colombia, Ecuador, Peru and Paraguay. Our results suggest that political risk and the level of institutional development in the host country act as strong determinants of BITs effectiveness. Furthermore, we find that the main determinants affecting intra-bloc FDI are factor endowments and market potential. These findings shed clarity into the current debate on the effectiveness of BITs versus RTAs as an adequate mechanism to attract foreign investment.