Sandra T. Silva

Inequality and Growth: Uncovering the Main Conclusions from the Empirics

Abstract This paper is a critical survey of the empirical literature on the effects of inequality on economic growth. We conclude that it is most likely that the disparities found in the results are due to differences in the type of countries and time periods included in the samples, the variable used to measure inequality, the structure of the data, and the estimation techniques. These findings suggest that the mechanisms that link inequality to growth are likely to operate differently in different circumstances, an element that may offer important guidelines for both policy makers and researchers.

Micro Credit and Territory: Portugal as a case study

This paper studies the relations between micro credit and territory, assuming that micro credit is an important instrument for fighting against poverty and social exclusion. Based on a micro-level database provided by ANDC (Associacao Nacional de Direito ao Credito), a statistical and econometric study has been undertaken in order to identify the territorial idiosyncrasies associated with the employment of micro credit in Portugal. Focusing on the survival of micro credit projects during the period 2006-2009, our study demonstrates the significance for a firm’s survival of variables such as population density, value added growth in each activity and promoters’ qualifications, as well as two regional dummies.

Institutions, Economics and the Development Quest

Institutions crucial for the analysis of how agents deal with uncertainty have been gaining increasing relevance on the economic research agenda. In this paper, we analyze the institutional literature aiming to explain why this perspective obtains better results than others in development economics. In particular, we stress the relevance of New Institutional Economics as an adequate framework for a broad understanding of development issues.

The effects of autocatalytic trade cycles on economic growth

In the first part of this paper the effects of trade cycles on economic growth are discussed to test the hypothesis of autocatalytic trade cycles, which indicates that more innovation is produced in countries that are a part of these cycles. Using United Nations data, a trade network is constructed and from this network, a set of variables that represent the participation of countries in trade cycles are constructed. A clear relation between these variables and economic growth is found. However, this relationship changes for different trade cycle sizes, categories of goods and time scales. Trade cycles also have a positive effect for the trade flows involved, although this effect differ significantly depending on the size of the trade cycle. The second part of the paper shows that the effects of trade cycles can be translated into policy recommendations. These conclusions strenghten existing literature but also add new insights to innovation policy and the pursuit of economic prosperity.

Economics of the Firm and Economic Growth. An hybrid theoretical framework of analysis

Abstract The main goal of this study is to achieve a critical discussion around the conceptualization of the firm and its role in the dynamic process of economic growth. By reviewing the theoretical matrix of the economics of the firm we go beyond the mainstream economics of the firm proposing a hybrid approach combining evolutionary and population ecology, which is likely to constitute a fruitful path for the conceptualization of the firm in the process of economic growth. Specifically, the analysis confronts the distinct theoretical perspectives around some imperative and controversial issues such as the nature of knowledge and learning and the cognitive capacities of economic agents within the firm. We argue that the economic understanding of growth and development of human societies will strongly benefit from a conceptualization of the firm capable of capturing the spirit of the Knightian firm. Overcoming the shortcomings of the mainstream growth models, which conceive firms as a black box, the proposed hybrid approach recalls the true nature of the firm as an organization. Issues related to the organizational arrangements that sustain the feasibility of productive activities and to the incentive contracts are also taken into account. Although acknowledging some recent important contributions within mainstream economic growth theory to adopt more realistic concepts of the firm, we believe that evolutionary and organizational population perspectives include crucial pointers in developing further research aimed at the construction of economic growth models based on a micro-economic perspective that is closer to the reality of firms.

Intellectual Property Rights and Endogenous Economic Growth – Uncovering the Main Gaps in the Research Agenda

Intellectual Property Rights (IPRs) are “the rights to use and sell knowledge and inventions” (Greenhalgh and Rogers, 2007: 541), with the aim of guaranteeing adequate returns for innovators and creators. There are different types of intellectual property protection (Granstrand, 2005): old types such as patents, trade secrets, copyrights, trademarks and design rights, and new forms such as breeding rights and database rights. Nonetheless, patents are commonly considered as the most important and representative IPR (e.g., Besen and Raskind, 1991).

THE IMPACT OF POPULATION AGEING ON ECONOMIC GROWTH: A BIBLIOMETRIC SURVEY

Population ageing and its influence on the economic growth has long been the focus of major concern. Using bibliometric techniques we found that: (1) although ageing has increasingly attracted more researchers within economics literature, the relative weight of ageing and economic growth related papers does not evidence a clear positive trend; (2) recent studies reveal the willingness of researchers to evaluate less immediate mechanisms relating ageing and economic growth; (3) the increase in the use of empirical methods reflects a trend to test economic phenomena with real-world data against the theory; (4) very few studies focus on developing and less developed countries.

The Impact of Ageing and the Speed of Ageing on the Economic Growth of Least Developed, Emerging and Developed Countries, 1990–2013

Studies relating ageing and countries’ economic performance address mostly developed economies. However, extant studies demonstrate that less developed countries (LDC) and emerging economies (EE) are reaching the transition process faster than those from developed regions, which renders the speed of ageing, besides ageing, a critical variable to explore in this context. Comparing system dynamic panel data estimations for 40 LDC, 19 EE and 28 developed countries (DC), between 1990 and 2013, we uncovered that ageing is detrimental to countries’ economic growth, with noticeable nuances depending on countries’ development level. The current level of ageing significantly and negatively impacts on DCs growth but not on that of LDC or EE. For these latter groups, the most relevant issue is the speed of ageing. The current annual growth of old age dependency ratio significantly diminishes EEs growth prospects whereas the lagged annual growth of the ageing index and the old age dependency ratio significantly curtails LDCs growth. Such results emphasize the need for urgent public policies that might mitigate the imbalance in LDCs’ age structure before the speed of ageing leads LDCs to become even much poorer.

HOW POWERFUL ARE TRADE UNIONS? A SKILL-BIASED TECHNOLOGICAL CHANGE APPROACH

This paper proposes a new theoretical framework aiming to understand the link between technological change, skill premium and employment, combining a skill-biased technological change (SBTC) framework with a collective bargaining structure perspective. Our results suggest that in the presence of unions: (i) skill premium might be higher depending on the bargaining structure; (ii) it is possible to achieve higher employment and higher wages without increasing or even implying unemployment (iii) unions fail to anticipate their impact on the path of technological-knowledge bias.

The Influence of Creativity on Entrepreneurship: The Portuguese Case

Literature shows that a high level of new firm creation significantly contributes to regional economic performance and is a clear sign of a thriving economy; hence, the understanding of the factors promoting new firm formation is crucial for economic development. Typically, literature has shown the influence of several variables such as the unemployment rate or the population density on firms’ birth rate. A more recent approach has been suggesting that creativity is one of the factors promoting new firm formation and, thus, economic growth. Richard Florida’s The Rise of the Creative Class (2002) was a seminal contribution for the recognition of the importance of creative people, creative industries, creative economies, and, thus, creativity. Many authors, inspired by this contribution, have been undertaking theoretical and empirical studies to analyze the role of creativity in economics. The aim of this chapter is to follow such contributions, discussing the impact of creativity on entrepreneurship in Portugal. A multivariate linear regression analysis is applied, explaining new firm formation across Portuguese regions with explanatory variables that include both creativity and diversity indexes, innovation indicators and the human capital dimension, as well as other control variables. Our results show little evidence of the influence of creativity on the birth of new firms, while pointing to the relevance of agglomeration effects for new firms’ formation and to the difficulty of immigrants in establishing a firm.