Essays on Microeconomics and Industrial Organisation

384 Pages·2004·12.209 MB·English

by  Professor Dr. Pablo Coto-Millán (auth.), Professor Dr. Pablo Coto-Millán (eds.)

Essays on Microeconomics
and Industrial Organisation
Contributions to Economics
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Development in Europe Agent-Based Computational Demography
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East European Transition and EU The Dynamics of the Price Structure
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Systemic Transformation, Trade and Public Debt and Endogenous Growth
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The Dynamics of Clusters and Innovation
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Engelbert Plassmann Markus Gangl
Econometric Modelling of European Money Unemployment Dynamics in the
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2003. ISBN 3-7908-1522-5 2003. ISBN 3-7908-1533-0
Pablo Coto-Millän
Editor
Essays on Microeconomics
and Industrial Organisation
Second, Revised and Enlarged Edition
With 48 Figures and 103 Tables
Springer-Verlag Berlin Heidelberg GmbH
Series Editors
Werner A. Müller
Martina Bihn
Editor
Professor Dr. Pablo Coto-Millän
University of Cantabria
Department of Economics
Avda. Los Castros s/n.
39005 Santander
Spain
[email protected]
ISSN 1431-1933
ISBN 978-3-7908-0104-0 ISBN 978-3-7908-2670-8 (eBook)
DOI 10.1007/978-3-7908-2670-8
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Table of Contents
Introduction 1

PART I Demand 3

1 Modeling Seasonal Integrated Time Series: the Spanish
Industrial Production Index
J. L. Gallego-Gomez 5

1.1 Seasonal Time Series Models 5

1.2 Forecasting 9

1.3 Unobservable Components 11

1.4 Empirical Analysis 12

References 16

2 Passenger's Choice of Air Transport under Road Competition:
the Use of Cointegration Techniques
J. Bafios-Pino, P. Coto-Millan, V. Inglada-Lopez de Sabando 19

2.1 Introduction 19

2.2 The Model 21

2.3 The Data 22

2.4 Marshallian or Non Compensated Demands ofInterurban Passenger

Transport: Air and Road Transport 23

2.4.1 Air Transport Demand 23

2.4.2 Road Transport Demand 25

2.5 Conclusions 27

References 27

3 Introduction of an Innovative Product: the High Speed Train
(AVE)
V. Inglada-Lopez de Sabando, P. Coto-Millan 29

3.1 AVE: Characterisation 29

3.2 Qualitative Analysis 31

3.3 The Concept of Generalised Cost 33
VI Table of Contents
3.4 Comparison Among Different Competing Products 35

3.5 Induction and Substitution Effects 38

3.5.1 Induction Effect 38

3.5.2 Substitution Effect 39

3.5.3 The Demand for the New Product 39

3.6 Impact on Demand 40

References 40

4 An Approach to the Hub-and-Spoke Systems from SVARs
Models. A Practical Application to Container Traffic between
the Port of Bahia de Aigeciras and Other Ports of the Spanish
Port System (Bahia de Cadiz and Las Palmas)
J. I. Castillo-Manzano,P.Coto-Milhln, L. Lopez-Valpuesta 41

4.1 Introduction and Reasons for Analysis 41

4.2 VAR Models: Methodological Approach 42

4.2.1 Impulse Response 43

4.3 Formulating Long-Run Restrictions under a SVAR Model Applied to

a Hub-and-Spoke System 44

4.4 Practical Application to Container Traffic between the Bahia de

Algeciras Port and other Ports of the Spanish Port System 47

4.4.1 Scenario 1:Existence ofaSharedHinterland between the

Infrastructures. Practical Applications: Bivariate SVAR

between the Ports Bahia de Algeciras and Cadiz 48

4.4.2 Scenario 2:Lack ofSharedHinterlandbetween Infrastructures.

A Practical Application : Bivariate SVAR between the Bahia

de Algeciras and Las Palmas Ports 53

4.5 Conclusions 57

References 58

PART II. Production and Costs (Supply) 59

5 Technical and Allocative Inefficiency in Spanish Public
Hospitals
C. Garcia-Prieto 61

5.1 The Model 62

5.2 Definition ofVariables and Functional Specification 66

5.2.1 Outputs 67

5.2.2 Input Prices 67

5.2.3 Fixed Input 68

5.2.4 Functional Form 68

5.3 Estimation and Results 69

5.4 Conclusions 72

References 73
Table of Contents VII
6 Technical Efficiency of Road Haulage Firms
J. Bafios-Pino, P. Coto-Millan, A. Rodriguez-Alvarez, V. Inglada-Lopez

de Sabando 75

6.1 Introduction 75

6.2 Efficiency 76

6.3 Classification of Efficiency Frontiers 78

6.4 A Theoretical Application to Goods Haulage Companies on

Spanish Roads Using Panel Data 80

References 86

7 Technical Efficiency and Liberalisation within International
Air Transport (1992-2000)
P. Coto-Millan, V. Inglada-Lopez de Sabando, B. Rey,
A. Rodriguez-Alvarez 89

7.1 Introduction 89

7.2 Methodology 92

7.3 Description of the Data and the Variables Used 94

7.4 Econometric Specification 94

7.5 Results of the Estimation 95

7.6 Conclusions 100

References 101

8 Technological Innovation and Employment: Intersectoral
Appraisals of Structural Change in the Service Economy
D. Diaz-Fuentes 103

8.1 Introduction 103

8.2 Extent of Structural Change in Services Employment 106

8.3 Innovation and Employment Trends in Structural Change 108

8.4 Embodied Technology and Technology Diffusion in Services 110

8.5 Compositional Structural Change in Employment (Final and

Intermediate Demand for Services) 114

8.6 Conclusions 116

References 117

PART III Market and Industrial Structure 121

9 The Measurement of Intra-industry Trade and Specialisation:
a Review
G. Carrera-Gomez 123

9.1 Measures of Intra-industry Trade and Specialisation 123

9.1.1 Intra-industry Trade Indices 124

9.1.2 Intra-industry Specialisation Indices 131

9.1.3 Comparison of Measures 134
VIII Table of Contents
9.1.4 Later Developments 136

9.2 Trade Imbalance Adjustment 139

9.2.1 Grubel and Lloyd (1975) 139

9.2.2 Aquino (1978) 141

9.2.3 Balassa (1979) 144

9.2.4 Loertscher and Wolter (1980) 145

9.2.5 Bergstrand (1982) 145

9.2.6 Comments and Conclusions 147

9.3 Categorical Aggregation 148

9.3.1 Definition of the Problem 148

9.3.2 Categorical Aggregation Tests 149

9.3.3 Critics and Conclusions 151

9.4 Summary and Conclusions 152

References 153

10 Measurement of Intra-industry Trade: a Categorical
Aggregation Exercise with Spanish Trade Data
G. Carrera-Gomez 155

10.1 Introduction 155

10.2 Methodology 156

10.2.1 Measurement ofIntra-industry Trade 156

10.2.2 Categorical Aggregation : Definition of the Problem

and Assessment Methods 157

10.3 Main Results Obtained 159

10.4 Summary and Conclusions 162

References 163

11 The Determinants of Intra-industry Trade in Spanish
Manufacturing Sectors: a Cross-section Analysis
G. Carrera-Gomez 165

11.1 Spanish Intra-industry Trade Measurement 166

11.2 Analysis of the Determinants ofIntra-industry Trade in Spain 167

11.2.1 Hypotheses 167

11.2.2 Data, Variables and Econometric Model 169

11.2.3 Results 171

11.3 Summary and Conclusions 173

References 173

12 Economic Integration, Vertical and Horizontal Intra-industry
Trade and Structural Adjustment: the Spanish Experience
G. Carrera-Gomez 175

12.1 Data and Methodology 176

12.2 Results 179

12.3 Summary and Conclusions 184

References 184
Table of Contents IX
PART IV. Failures of Market and Industrial Regulation 187

13 Organisation and Regulation of the Port Industry: Europe
and Spain
B. Tovar, L. Trujillo, S. Jara-Diaz 189

13.1 Introduction 189

13.2 Models of Port Property and Management 190

13.3 Private Participation in Ports 191

13.4 Regulation ofPort Activities 193

13.5 Port Services and Terminals 194

13.5.1 Cargo Unitisation 196

13.5.2 Factors of Production and Their Regulation 196

13.6 Port Regulation in the European Union 199

13.6.1 Port Regulation in Spain 201

13.7 Conclusions 203

References 205

14 Positive Theory of Regulation: an Application to Spanish
Foreign Trade
G. Carrera-Gomez, P. Coto-Milhin, J. Villaverde-Castro 209

14.1 Introduction 209

14.2 Data and Variables 210

13.3 Empirical Results 214

14.4 Conclusions 216

References 216

15 Structure, Functioning and Regulation of the Spanish
Electricity Sector. The Legal Framework and the New
Proposals for Reform
F. J. Ramos-Real, E. Martinez-Budria, S. Jara-Diaz 219

15.1 Introduction 219

15.2 Structure, Functioning and Regulation of the Spanish Electricity

Sector between 1983-1996 220

15.2.1 The Reform Process and the Basic Principles Regulating

the System's Operation (1983-1996) 222

15.2.2 Unified Management and Central Planning 223

15.2.3 The Rates and Financial Return Policy of the Legal and Stable

Framework (MLE) 224

15.3 Regulation Reform in the Spanish Electricity Sector from 1997 231

15.4 Conclusions 235

References 236
X Table of Contents
16 Effects of a Reduction of Standard Working Hours on Labour
Market Performance
C. Perez-Dominguez 237

16.1 Effects on Employment 238

16.1.1 The Basic Model 238

16.1.2 The Role of Fixed Labour Costs 239

16.1.3 Effort Effect and Organisational Effect 241

16.2 Effects on Labour Market Participation 244

16.2.1 Labour Market Participation with Compulsory Working Hours 244

16.2.2 Effects of a Reduction of the Working Hours on Aggregate

Labour Supply 246

16.3 Effects on the Unemployment Rate 247

16.3.1 The Basic Case 247

16.3.2 Effects on the Unemployment Rate under a More General

Model 249

16.4 Conclusions 250

References 251

17 Transitional Dynamics and Endogenous Growth Revisited:
the Case of Public Capital
B. Sanchez-Robles 253

17.1 Introduction 253

17.2 Setup of the Models 254

17.3 Solution for the BGP in the CES Case 256

17.4 The Time Elimination Method and the Analysis of Transitional

Dynamics 260

17.5 Discussion of the Main Results of the Simulations 262

17.6 Conclusions 272

Appendix 273

References 274

18 Unions, Wages and Productivity. The Spanish Case,

1981-2000 .

N. Sanchez-Sanchez, B. Sanchez-Robles 277

18.1 Introduction 277

18.2 Theoretical Background 280

18.2.1 Elasticity of Output with Respect to Unions through Wages 281

18.2.2 Elasticity of Productivity to Unions through Changes in

Efficiency 282

18.2.3 Total Elasticity of Productivity to Unions 283

18.3 Empirical Analysis 283

18.4 Data and Variables 285

18.5 Main Empirical Results 286

18.6 Concluding Remarks 293

References 294