Marcella Nicolini

FDI spillovers in new EU member states

Using an unbalanced panel of firm-level data in Bulgaria, Poland and Romania, we examine the impact of foreign firms on domestic firms’ productivity. In particular, we try to answer the following research questions: (1) Are there any spillover effects of foreign direct investments (FDI), and if so, are they positive or negative? (2) Are spillover effects more likely to occur within or across sectors? (3) Are the existence, the direction and the magnitude of spillovers conditioned by sector and firm-specific characteristics? Our findings show that FDI spillovers exist both within and across sectors. The former arise when foreign firms operate in labour-intensive sectors, while the latter occur when foreign firms operate in high-tech sectors. Moreover, we find that domestic firm size conditions the exploitation of FDI spillovers even after controlling for absorptive capacity. We also detect a great deal of heterogeneity across countries consistent with the technology gap hypothesis.

Do Competition and Ownership Matter? Evidence from Local Public Transport in Europe

This article investigates how the ownership and the selection procedure of firms operating in the Local Public Transport (LPT) sector affect their productivity. In order to compare different institutional regimes, we carry out a comparative analysis of 77 companies operating in large European cities over the period 1997 to 2006. This allows us to consider firms selected either through competitive tendering or negotiated procedures. Retrieving the residuals we obtain a measure of Total Factor Productivity (TFP), which we regress on firm and city characteristics. We find that totally or partially public firms display lower productivity than privately owned firms. Moreover, firms selected through competitive tendering display higher TFP.

Financial Speculation in Energy and Agriculture Futures Markets: A Multivariate GARCH Approach

This paper analyses futures prices of four energy commodities (crude oil, heating oil, gasoline and natural gas) and five agricultural commodities (corn, oats, soybean oil, soybeans and wheat), over the period 1986-2010. Using DCC multivariate GARCH models, it provides new evidence on four research questions: 1) Are macroeconomic factors relevant in explaining returns of energy and non-energy commodities? 2) Is financial speculation significantly related to returns in futures markets? 3) Are there significant relationships among returns, either in their mean or variance, across different markets? 4) Is speculation in one market affecting returns in other markets? Results suggest that the SP G13; Q11; Q43.

Returns in Commodities Futures Markets and Financial Speculation: A Multivariate GARCH Approach

This paper analyses futures prices for four energy commodities (light sweet crude oil, heating oil, gasoline and natural gas) and five agricultural commodities (corn, oats, soybean oil, soybeans and wheat), over the period 1986-2010. Using CCC and DCC multivariate GARCH models, we find that financial speculation is poorly significant in modelling returns in commodities futures while macroeconomic factors help explaining returns in commodities futures. Moreover, spillovers between commodities are present and the conditional correlations among commodities are high and time-varying.

Combined Effects of Capacity and Time on Fares: Insights from the Yield Management of a Low-Cost Airline

Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-based theories predict, it emerges that fares monotonically and substantially increase with flight occupancy. After controlling for capacity utilization, our analysis also supports time-based theories, indicating a U-shaped temporal profile over a two-month booking period, as well as a sharp increase in fares in the two weeks prior to departure.

Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline

Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertemporal price discrimination, the adoption of advance purchase discounts is widespread as the departure date nears, but it may be part of a U-shaped temporal profile, where discounts are preceded by periods of relatively higher fares. Finally, the intervention of yield management analysts appears to play a substantial role.

Futures Price Volatility in Commodities Markets: The Role of Short Term vs Long Term Speculation

This paper evaluates how different types of speculation affect the volatility of commodities’ futures prices. We adopt four indexes of speculation: Working’s T, the market share of non-commercial traders, the percentage of net long speculators over total open interest in future markets, which proxy for long term speculation, and scalping, which proxies for short term speculation. We consider four energy commodities (light sweet crude oil, heating oil, gasoline and natural gas) and seven non-energy commodities (cocoa, coffee, corn, oats, soybean oil, soybeans and wheat) over the period 1986-2010 analyzed at weekly frequency. Using GARCH models we find that speculation significantly affects volatility of returns: short term speculation has a positive and significant impact on volatility, while long term speculation generally has a negative effect. The robustness exercise shows that: i) scalping is positive and significant also at higher and lower data frequencies; ii) results remain unchanged through different model specifications (GARCH-in-mean, EGARCH, and TARCH); iii) results are robust to different specifications of the mean equation.

Productivity Spillovers from Foreign Multinational Enterprises to Domestic Manufacturing Firms: To What Extent Does Spatial Proximity Matter?

Mariotti S., Mutinelli M., Nicolini M. and Piscitello L. Productivity spillovers from foreign multinational enterprises to domestic manufacturing firms: to what extent does spatial proximity matter?, Regional Studies. This paper analyses the role of spatial proximity in productivity spillovers from foreign multinational enterprises (MNEs). Using a database of foreign affiliates located in Italy from 1999 to 2005, it is shown that local firms benefit from the presence of MNEs through both backward and forward linkages. It is found that: (1) spillover effects are more strongly associated with MNEs in knowledge-intensive business services and utilities; and (2) co-location positively affects productivity spillovers, and the effect is stronger for foreign affiliates that are distantly located. This is especially true in the service sector due to the role of temporary spatial proximity and other dimensions of proximity.

Productivity Spillovers from Foreign MNEs on Domestic Manufacturing Firms: Is Co-Location Always a Plus?

The paper analyses productivity spillovers from foreign MNEs on domestic manufacturing firms. Using a database on foreign MNEs in Italy, our results reveal that local firms do benefit from the presence of foreign MNEs, and the effect is higher when local and foreign firms in manufacturing sectors are co-located. However, spillovers benefiting domestic firms are likely to be less influenced by co-location when foreign MNEs are in services sectors as the latter are different from manufacturing industries under a number of aspects that overcome the effect of distance. Indeed, in these sectors, proximity and interaction are often obtained through professional mobility and temporary inter-organizational routines.

Productivity Spillovers, Regional Spillovers and the Role of by Multinational Enterprises in the New EU Member States

There is a widely held assumption that multinational enterprises (MNEs) generate benefits that spill over to the host economy, resulting in productivity growth. Several channels foster the diffusion of such spillovers. They include backward and forward linkages with local firms – through which multinational firms may encourage the entry and development of more efficient local suppliers and final goods producing firms (Markusen and Venables 1999), competition and demonstration effects (Wang and Blomstrom 1992; Glass and Saggi 2002), as well as movements of labour force from multinationals to local firms (Fosfuri et al. 2001). The transmission of spillovers from MNEs to domestic firms, however, is not automatic; rather, it is affected by several factors, most of which can be summarized in the concept of distance, broadly defined in order to encompass both the economic and the geographical dimension. Economic distance concerns relative backwardness and absorptive capacity and determines whether and to what extent local firms eventually benefit from Foreign Direct Investment (FDI)-induced spillovers (Findlay 1978; Glass and Saggi 1998).In this paper, Multinational Enterprises (MNEs) and Foreign Direct Investment (FDI) are used as synonymous.