George Agiomirgianakis

Human capital and economic growth: Time series evidence from Greece

Abstract This article, examines the relationship between human capital and economic development in Greece. Assuming that the principal institutional mechanism for developing human skills is the formal education, we examine the long-run relationship between educational variables and gross domestic product (GDP), as well as the causal direction between them. Our main result suggests that there exists a cointegrating relationship between education as measured by enrollments rates in primary, secondary, and higher education and the GDP per capita while causality runs through educational variables to economic growth, with the exception of higher education where there exists reverse causality.

The Determinants of Foreign Direct Investment

This study examines panel data evidence concerning empirical relevance between Foreign Direct Investment (FDI) attraction and its determinative effects. The main bulk of FDI is among the developed countries. Indeed, OECD countries has probably been the most potential group in undertaking FDI by caring out about 95% of the total outward FDI while, on average, 75% of the world FDI was directed into OECD countries. In this paper, we first present and analyse the theoretical/empirical findings on FDI, then we focus on assessing the relative significance of the factors that may attract FDI via a panel data regression analysis for a sample consisting of 20 OECD countries for 23 years (1975—1997). Our findings suggest that certain variables such as human capital and trade regime, as well as, the density of infrastructure appear to be robust under different specifications. Positive significance of the agglomeration factor is also observed, confirming the relevant theoretical propositions. However certain deferential variables, such as the governmental policy effect, could not be fully captured due to the statistical homogeneity of the sample.

Size and Determinants of Capital Structure in the Greek Manufacturing Sector

Increasing competition in the European Union (EU) and world markets affects the Greek manufacturing sector. Capital structure is essential for the survival, growth and performance of a firm. There has been a growing interest worldwide in identifying the factors associated with debt leverage. However, nothing has been done so far in contrasting small and medium sized enterprises (SMEs) and large sized enterprises (LSEs) on these aspects. SMEs are very important in the Greek manufacturing sector for employment and growth. Empirical studies show that capital structure and the factors affecting it vary with firm size. In this paper we investigate the determinants of capital structure of Greek manufacturing firms and formulate some policy implications that may improve the financial performance of the sector. Our study utilizes panel data of two random samples, one for SMEs and another for LSEs. The findings show that profitability is a major determinant of capital structure for both size groups. However, efficient assets management and assets growth are found essential for the debt structure of LSEs as opposed to efficiency of current assets, size, sales growth and high fixed assets, which were found to affect substantially the credibility of SMEs. In an era of increasing globalization, the findings imply that Greek SMEs should focus their efforts on (a) increasing their cash flow capacity through better assets management and achievement of higher exports and (b) ensuring good bank relations, but at the same time, turn to alternative forms of financing. Greek LSEs should adopt strategies that will lead to the improvement of their competitiveness and securing new forms of financing. Government policy measures aiming at structural changes and economic efficiency should be designed clearly depending upon its targets: SMEs need policies that will encourage information exchange and co‐operation in local and foreign markets and use of e‐business, as well as, financial assistance. On the other hand, LSEs should be supported by policies aimed at new high‐technology investments, entrance of new firms and foreign investments in the country, tax alleviation and increase of R&D and training expenditures. The upgrading and transparency of the capital market in Greece is expected to improve the capital structure of Greek manufacturing firms.

Human capital and economic growth revisited: A dynamic panel data study

This paper examines the role of human capital on economic growth by using a large panel of data including 93 countries. Given the cross-sectional character in most of the relevant studies, there is a possibility that when the long-run dynamics are considered, education might not be a significant determinant of growth. Following a dynamic panel data approach, the analysis indicates that education has, indeed, a significant and positive long-run effect on economic growth. Moreover, the size of this effect is stronger as the level of education (primary, secondary, and tertiary) increases. This has a straightforward policy implication that governments taking actions towards an expansion of their higher education may well expect larger gains in terms of higher economic growth in their countries.

Market escape through exchange: home swap as a form of non-commercial hospitality

The purpose of this paper is to examine home swap – a form of non-commercial hospitality that has witnessed a great expansion in the last decade. In conjunction with prior writings on various subjects related to home swap, this study can be utilised in compiling a preliminary conceptualisation of home swapping, as a form of non-commercial hospitality, with its own characteristics. In particular this study identifies six dimensions of home swap, namely (a) escape of the market, (b) asymmetric exchanges, (c) need for trustiness, (d) use of a hospitality exchange network, (e) demand for domesticity and (f) quest to experience local authenticity. The results of this study are being utilised to construct a preliminary conceptualisation of home swapping as a distinct vacation alternative building on old virtues and using new technology.

Macroeconomic equilibrium with illegal immigration

Abstract Illegal immigration (ILM) has been analyzed very little in the context of a macroeconomic framework. This paper introduces immigration of illegal unskilled workers into a simple model of an open economy with heterogeneous labor and, within this context, examines its macroeconomic and welfare consequences. The analysis shows that when skilled native wage setters and the policymakers behave as Nash players, ILM improves the position of the entire native labor force, i.e. both skilled and unskilled workers. Moreover, it reduces the inflationary bias associated with expansionary policies and thus has a positive overall impact on ‘social welfare’ in the economy. This result contrasts with several earlier studies that suggest that illegal immigration causes the position of at least some members of an economy to worsen. It also provides one possible macroeconomic explanation as to why illegal immigrants are currently tolerated in ‘inflation prone’ countries despite the fact that their presence sometimes causes social tensions. On the other hand, when native skilled workers and the policymakers behave cooperatively, ILM may in fact make the entire native workforce worse off. This result suggests that countries with ‘aggressive’ unions in skilled labor markets stand to gain from illegal immigration while countries with ‘soft’ unions may lose. Finally, it is shown that domestic labor market conditions determine the ‘optimum’ degree of government intervention in the illegal migrant labor market.

Economic growth, international labour mobility, and unanticipated non-monetary shocks

Abstract Economic growth models often assume that the labour force of a country is fixed and unaffected by international conditions. In recent years, however, observed large labour flows internationally have questioned this assumption. In this paper, we extend a standard economic-growth model and examine the adjustment of a small open economy, operating under conditions of international labour mobility (ILM) in the presence of two unanticipated shocks: an asset-market shock and a goods-market shock. Our findings suggest that the presence of ILM affects the dynamic adjustment of the economy, in response to the two unanticipated shocks. In particular, we show that ILM reduces the variability of the real exchange rate following each shock. However, ILM may worsen or improve conditions of economic growth depending upon the nature of the unanticipated shock. This result has straightforward policy implications for open economies facing asymmetric shocks: countries prone to asset-market shocks stand to loose under ILM and should, therefore, adopt measures hindering ILM while countries prone to goods-market shocks stand to gain from ILM and should thus try to adopt measures encouraging ILM.

Monetary Policy Games and International Migration in a Small Open Economy

The paper shows that international migration may improve the position of both policymakers and unions in small open economies irrespective of whether they cooperate or not. This result implies that both unions and policymakers in small open economies may welcome a further increase in international labor flow in the future. When allowance is made for real GDP per capital considerations on behalf of the policymaker, it is found that aggressive union behavior may increase the inflationary bias. Aggressive unions may insulate themselves, while soft unions lose. The presence of migration does not necessarily lead to a better outcome.

Determinants of export behavior in the Greek manufacturing sector

This paper examines the determinants of export performance of firms in the Greek manufacturing industry, using cross-sectional data from 1652 firms in 1999 and a Tobit regression model. The study finds that firms that have larger size, lower unit labor cost and low capital to labor ratio have a higher propensity to export, confirming the fact that in Greece, which has the second lowest capital to labor ratio among the EU-15 members, export activities are concentrated among firms with low capital intensity, exactly as the theory of competitive advantage would predict.

Determinants of profitability and the decision-making process of firms in the tourism sector: the case of Greece

This paper aims at investigating the determinants of profitability in the tourism sector of Greece. As tourism is one of the main industries in Greece, with a share in total economic activity varying from 15% to 20% of GDP (whether measured directly or indirectly respectively), both the theoretical and practical implications of pinpointing the determinants of profitability are significant: first, at the microeconomic level, these determinants are interwoven with the decision-making process of firms; and secondly, at the macroeconomic level, these determinants should be taken into account when policy makers try to formulate appropriate policies that could support or stimulate investment activity in the tourism sector.