Hulya Ulku

R&D, Innovation, and Economic Growth: An Empirical Analysis

This paper investigates the main postulations of the R&D based growth models that innovation is created in the R&D sectors and it enables sustainable economic growth, provided that there are constant returns to innovation in terms of R&D. The analysis employs various panel data techniques and uses patent and R&D data for 20 OECD and 10 Non-OECD countries for the period 1981-97. The results suggest a positive relationship between per capita GDP and innovation in both OECD and non-OECD countries, while the effect of R&D stock on innovation is significant only in the OECD countries with large markets. Although these results provide support for endogenous growth models, there is no evidence for constant returns to innovation in terms of R&D, implying that innovation does not lead to permanent increases in economic growth. However, these results do not necessarily suggest a rejection of R&D based growth models, given that neither patent nor R&D data capture the full range of innovation and R&D activities.

R&D, Innovation and Output: Evidence from OECD and Non-OECD Countries

This article uses data from 41 OECD and nonOECD (Organisation for Economic Co-operation and Development) countries to examine the predictions of nonscale endogenous growth theories that an increase in the share of researchers in labour force leads to an increase in innovation and innovation raises per capita output. The results show that an increase in the share of researchers in labour force increases innovation only in the large market OECD countries. Moreover, an increase in innovation raises per labour GDP (Gross Domestic Product) in all nonOECD countries except for low income countries, while raising it only in the high-income OECD countries. These findings suggest that though the large market OECD countries are the world leader in innovation, nonOECD countries benefit more from it in promoting their growth.

Grants Versus Loans

Under what conditions should grants be preferred to loans? To answer this question, we present a simple model a la Krugman (1988) and show that, for any given level of developmental assistance, the optimal degree of loan concessionality is positively associated with economic growth if countries are poor, have bad policies, and high debt obligations. We then test our model by estimating a modified growth model for a panel of developing countries, and find evidence supporting our predictions. Finally, we assess the determinants of current aid allocations and find that the degree of concessionality is negatively correlated with countries` levels of development.

Integration, Social Networks and Economic Success of Immigrants: A Case Study of the Turkish Community in Berlin

The observation that some immigrants choose not to integrate into the host society has caused political controversies across European states. This paper hypothesizes that immigrants can exploit social networks of different scales in order to substitute for costly integration. Using a novel dataset of Turkish households in Berlin, which was specifically collected for this analysis, we investigate the determinants of integration as well as the impact of integration and networks on households’ economic success. We find evidence that integration promotes income even after accounting for potential endogeneity bias. Using endogenous switching regression model, we test whether local ethnic networks can be successfully used to generate household income. In line with the view that there is a trade-off between integration and the establishment of ethnic contacts, we find that local ethnic and familial networks increase the income of unintegrated migrants, while transnational networks decrease it. Moreover, education is more income improving for integrated than non-integrated immigrants and remaining closely integrated within their own ethnic group is more economically advantageous for poorer households. These results provide evidence that integration is the rational strategy for better-off immigrants while it may be too costly for poorer immigrants.

Determinants of Remittances: The Case of the South Asian Community in Manchester

Abstract This paper investigates the remittance behaviour of the South Asian community using new data from Indian, Pakistani and Bangladeshi households in Manchester. The findings show that standard variables such as income, employment, education, linkages to the home country and host country are important determinants of remittances. Although remittances are sent mainly for consumption purposes, those sent for land acquisition and savings have stronger association with the amount of remittances. In addition, we find strong evidence for the remittance decay hypothesis for Indian and Pakistani migrants, but not for Bangladeshi migrants.

Remitting Behaviour of Turkish Migrants: Evidence from Household Data in Germany

This paper provides an empirical analysis of the remittances of Turkish migrants using data from 590 households in Berlin. It distinguishes between migrants who do and do not intend to return to Turkey and the different uses of remittances. The findings show that those migrants who intend to return remit mostly for reasons of self-interest, while those with no such intention remit for reasons of tempered altruism. There is no evidence of pure altruism in any of the samples. In addition, remitters are more likely to increase the amount of remittances where they are to be spent on education and investment. The same relationship does not hold for basic needs.

Determinants of Integration and Its Impact on the Economic Success of Immigrants: A Case Study of the Turkish Community in Berlin

Using a new data on 590 Turkish households in Berlin, we investigate the determinants and impact of integration on economic performance. We find that usual suspects such as time spent in Germany and education have positive impact, while networks have no impact on integration. There is strong evidence that political integration and the degree of full integration promote income. Using endogenous switching regression models, we show that local familial networks increase the income of unintegrated migrant groups only, while transnational networks decrease it. We also find that education is more welfare improving for integrated than non-integrated immigrants.

Labor market regulations and outcomes in Sweden : a comparative analysis of recent trends

This paper analyzes recent trends in Swedens labor market regulations in relation to comparator economies and examines the relationship between labor market regulations and outcomes. The paper finds that the Swedish labor market responded more rapidly to the recent global financial crisis than the majority of the European Union economies, which helped Sweden to recover quickly. Swedens hiring regulations are more flexible than those of many comparator economies, however, fixed-term contracts of short duration might have adverse consequences for the economy. In addition, Swedens regulations on work during the weekly holidays and mandatory paid annual leave are stricter than those of the majority of comparator economies. Moreover, among the economies of the Organisation for Economic Co-operation and Development, Sweden has one of the largest differences in employment protection between permanent and temporary employees, which could lead to a segmented labor market, where insiders enjoy high job security and outsiders are largely marginalized. This could be cause for concern, given that Sweden has a higher share of involuntary temporary workers among youth and involuntary part-time workers than both the Nordic and European Union averages. While protecting employees is important, excessive protection, particularly if it differs across different types of employment contracts, has been shown to have adverse effects on welfare and economic performance.

Technological Capability, Innovation, and Productivity in Least-Developed and Developing Countries

After decades of rigorous theoretical and empirical research, there is now consensus that technological progress is the engine of sustainable economic growth and development. No country has achieved economic development without investing in some form of technological knowledge and innovation. However, as apparent as this link has become, it remains unclear how technological progress will be achieved in least-developed and developing countries (LDDCs) and how it will affect economic growth and development.