Enrique López-Bazo

Decomposing differences in total factor productivity across firm size

This paper investigates the extent to which the gap in total factor productivity between small and large firms is due to differences in the endowment of factors determining productivity and to the returns associated with these factors. We place particular emphasis on the contribution of differences in the propensity to innovate and in the use of skilled labor across firms of different size. Empirical evidence from a representative sample of Spanish manufacturing firms corroborates that both differences in endowments and returns to innovation and skilled labor significantly contribute to the productivity gap between small and large firms. In addition, it is observed that the contribution of innovation to this gap is caused only by differences in quantity, while differences in returns have no effect; in the case of human capital, however, most of the effect can be attributed to increasing differences in returns between small and large firms.

Returns to Local and Transport Infrastructure under Regional Spillovers

This article pays special attention to the spatial dimension of public capital in regional economic growth. We assume that the effect of infrastructure on productivity depends on the type of public infrastructure in question: that is, local infrastructures enhance economic activity in the area where they are located, whereas transport and communication infrastructure may produce both benefits in the area where they are located and positive or negative spillovers to other regions. We also obtain conclusions on whether the link between growth and public capital depends on the amount of existing public capital stocks. Results for the Spanish provinces during a long time period suggest that the returns to local infrastructure are much greater than the returns to transportation, although in both cases, we observe strong decreasing returns to their accumulation. Finally, negative spillovers across regions in transport capital investments are obtained.

Geographical distribution of unemployment in Spain

López‐Bazo E., Del Barrio T. and Artís M. (2005) Geographical distribution of unemployment in Spain, Regional Studies 39 , 305–318. This paper estimates the external shape of the regional distribution of unemployment rates and it studies intradistribution dynamics to analyse the extent of regional inequalities in unemployment rates in Spain over the last decades. It also assesses the contribution of disequilibrium and equilibrium factors in giving rise to spatial differences in unemployment rates. Besides the traditional regression analysis, the effect of those factors on the whole regional distribution is estimated. Results reveal the existence of large differentials across the Spanish provinces in unemployment rates, the geographical distribution of which is characterized by strong persistence. Most of the characteristics of the distribution are induced by the equilibrium component of unemployment, although the influence of market equilibrium variables vanishes over the period under analysis, whereas the unequal distribution of amenities is the major responsible of spatial inequalities in unemployment rates at the late 1990s.

New evidence on international R&D spillovers, human capital and productivity in the OECD

Abstract In this article we show how the use of more reliable data on average years of schooling can change the conclusions about the magnitude of international R&D spillovers based on previous evidence, while pointing to a superior role of human capital.

Public infrastructure and the performance of manufacturing industries: short- and long-run effects

We present a theoretical framework for determining the short- and long-run effects of infrastructure. While the short-run effects have been the focus of most previous studies, here we derive long-run elasticities by taking into account the adjustment of quasi-fixed inputs to their optimum levels. By considering the impact of infrastructure on private investment decisions, we observe how, apart from the direct effect on costs in the short-run, infrastructure exerts an indirect source of influence in the long-run through their effect on private capital. The model is applied to manufacturing industries in the Spanish regions.

Growth and Externalities Across Economies: An Empirical Analysis Using Spatial Econometrics

Recent theoretical models of economic growth have emphasised the role of external effects on the accumulation of factors of production. Although most of the literature has considered the externalities across firms within a region, in this paper we go a step further and consider the possibility that these externalities cross the barriers of regional economies. We assess the role of these external effects in explaining growth and economic convergence. We present a simple growth model, which includes externalities across economies, developing a methodology for testing their existence and estimating their strength. In our view, spatial econometrics is naturally suited to an empirical consideration of these externalities. We obtain evidence on the presence of significant externalities both across Spanish and European regions.

The Spatial Distribution of Human Capital: Can It Really Be Explained by Regional Differences in Market Access?

This article checks for the robustness of the estimate of the impact of market access (MA) on the regional variability of human capital, derived from the New Economic Geography literature. The hypothesis is that the estimate of the coefficient of the measure of MA is actually capturing the effect of regional differences in the industrial mix and the spatial dependence in the distribution of human capital. Results for the Spanish provinces indicate that the estimated impact of MA vanishes and becomes nonsignificant once these two elements are included in the empirical analysis.

Informality and Overeducation in the Labor Market of a Developing Country

In this paper, we explore the connection between labor market segmentation in two sectors, a modern protected formal sector and a traditional- unprotected-informal sector, and overeducation in a developing country. Informality is thought to have negative consequences, primarily through poorer working conditions, lack of social security, as well as low levels of productivity throughout the economy. This paper considers an aspect that has not been previously addressed, namely the fact that informality might also affect the way workers match their actual education with that required performing their job. We use micro-data from Colombia to test the relationship between overeducation and informality. Empirical results suggest that, once the endogeneity of employment choice has been accounted for, formal male workers are less likely to be overeducated. Interestingly, the propensity of being overeducated among women does not seem to be closely related to the employment choice.

Evidence on the purchasing power parity in a panel of cities

Evidence is provided on the PPP hypothesis using a sample of 50 Spanish cities for a long time period through the application of panel data unit root tests. Although results suggest non-rejection of the PPP, short-run deviations – as measured by half-lives – indicate that real factors might be causing a slow rate of convergence to a common price index, even in highly integrated economies.

Regional Heterogeneity in Wage Distributions: Evidence from Spain

Regional differences in real wages have been shown to be both large and persistent in the United States and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer–employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.