Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers

This article aims to evaluate the effect of insurance on production, technical efficiency, and input use of Italian specialised-quality grape growers. A panel instrumental variable stochastic frontier approach is applied over the years 2008–2017 using data from the Farm Accountancy Data Network. The results show the requirement to correct for the endogeneity that stems from insurance adoption. Insurance has an enhancing effect on production and efficiency and reduces the use of intermediate inputs. It suggests that insurance helps to diminish the risk-averse farmers’ suboptimal input use due to the presence of uncertainty. Crop insurance leads risk-averse farmers to behave as if they were risk neutral and employs the profit-maximising input vector. Therefore, by reducing the risks linked to the uncertainty of outcomes, crop insurance leads grape growers to go in the direction of profit maximisation.

Exact tail asymptotics for a three-dimensional Brownian-driven tandem queue with intermediate inputs

In this paper, we consider a three-dimensional Brownian-driven tandem queue with intermediate inputs, which corresponds to a three-dimensional semimartingale reflecting Brownian motion whose reflection matrix is triangular. For this three-node tandem queue, no closed form formula is known, not only for its stationary distribution but also for the corresponding transform. We are interested in exact tail asymptotics for stationary distributions. By generalizing the kernel method, and using extreme value theory and copula, we obtain exact tail asymptotics for the marginal stationary distribution of the buffer content in the third buffer and for the joint stationary distribution.

Essays On Deep Trade Agreements

<div>The number of preferential trade agreements (PTAs) has increased tremendously since 1990. The natural question to ask is why. PTAs are not only about lowering down tariffs further than the most favoured nation (MFN) tariff levels. There are many economic and non-economic policies other than border policies that are addressed in PTAs. Trade agreements dealing with border policies (tariffs) are referred to as “shallow”; and those that are dealing with a broader set of policies are referred to as “deep”. Therefore, PTAs are about something deeper. Parallel to the increase in the PTAs, trade in intermediate inputs has grown exponentially over past decades. Therefore, the first question that arises is whether trade in intermediate inputs generates the need for deep integration. In this dissertation, we show that the nature of trade in intermediate goods requires deep integration. The second question to be addressed is whether the deep trade agreements need to be preferential. With a three-country model, we show that the deep bilateral agreements are rarely chosen over the shallow agreements. Finally, by introducing the deep integration in the multilateral trading system, we conclude that although trade in intermediate inputs calls for deep integration, they do not call for deep PTAs. However, deep integration is better implied under multilateral agreements. Therefore, the deep integration in economic policies does not contribute to the increase in the number of PTAs.</div>

Essays On Deep Trade Agreements

<div>The number of preferential trade agreements (PTAs) has increased tremendously since 1990. The natural question to ask is why. PTAs are not only about lowering down tariffs further than the most favoured nation (MFN) tariff levels. There are many economic and non-economic policies other than border policies that are addressed in PTAs. Trade agreements dealing with border policies (tariffs) are referred to as “shallow”; and those that are dealing with a broader set of policies are referred to as “deep”. Therefore, PTAs are about something deeper. Parallel to the increase in the PTAs, trade in intermediate inputs has grown exponentially over past decades. Therefore, the first question that arises is whether trade in intermediate inputs generates the need for deep integration. In this dissertation, we show that the nature of trade in intermediate goods requires deep integration. The second question to be addressed is whether the deep trade agreements need to be preferential. With a three-country model, we show that the deep bilateral agreements are rarely chosen over the shallow agreements. Finally, by introducing the deep integration in the multilateral trading system, we conclude that although trade in intermediate inputs calls for deep integration, they do not call for deep PTAs. However, deep integration is better implied under multilateral agreements. Therefore, the deep integration in economic policies does not contribute to the increase in the number of PTAs.</div>

Substitution between production factors and intermediate inputs in the light of KLEMS growth accounting for Poland

The generally adopted view is that the gross-output-based MFP is the most correct in terms of methodology, and the value-added-based MFP is its imperfect substitute performed when some data are missing. In this paper, however, performing both of them and comparing their results is proposed as a valuable means to studying the development of outsourcing in the economy. The paper presents the elaboration of the methodology for the latter, which is its main contribution to the field. The case of the Polish economy is used as an applicative example (covering the period between 2005 and 2016), as KLEMS growth accounting has recently been implemented in Poland. The results demonstrate that around the year 2011, the expansion of outsourcing ceased. Since outsourcing was one of the main processes of the Polish transition, this observation can be considered as an indication of the maturing of the market economy in Poland. Moreover, KLEMS growth accounting makes it possible to study this issue through NACE activities, i.e. at the industry level. It shows that manufacturing (section C of NACE) is predominantly responsible for the situation described above, which is the main empirical finding of the study. The dominant role of manufacturing is also confirmed by some other sectoral observations of lesser importance. The methodology developed in this paper can potentially be applied to other countries for which both kinds of MFP are performed.

The Impact of ICT Investment and Diffusion on Economic Growth: Empirical Evidence from Rwanda

This study evaluates the influence of Information and Communication Technologies (ICT) investment and diffusion on Rwanda's economic growth. At the level we recommend, ICT imports greatly improve intermediate inputs to capital goods, resulting in increased economic growth. We use the most recent available data on technical innovation and investment for our empirical study, which spans the years 2005Q1 to 2020Q4. The results of regression analysis show that ICT development has little effect on Rwanda's economic growth. However, we notice a patchwork of information on ICT investment. We utilize ICT goods exports and imports as a proxy for ICT investment, based on previous research. Surprisingly, ICT goods exports have had no impact on Rwanda's economic growth. We do notice, however, that a 1% increase in ICT goods imports boosts economic growth by 3.9 percent. At this level, ICT goods import greatly boost the intermediate input to capital goods, resulting in increased economic growth. As a result, officials should ensure that ICT goods imports should be prioritized through supporting ICT investment to boost economic growth.

Digital technologies, employment, and skills

This article investigates the relationship between the diffusion of digital technologies, employment, and skills. The empirical analysis is carried out on industry-level data of six major European economies (Germany, France, Spain, Italy, the Netherlands, and the UK) over the 2009–2014 period. We analyze two dimensions of digitalization: industries’ consumption of intermediate inputs from digitally intensive sectors and investment in Information and Communication Technology (ICT) tangible and intangible assets, considering also patterns of demand, education, technological change, and offshoring. The results show that job creation in industries is positively associated with an increasing share of digital goods and services in total intermediate inputs and is negatively linked with processes of ICT capital deepening. We then explore how these two different patterns of digitalization are related to the evolution of four occupational groups—managers, clerks, craft, and Manual workers, defined on the basis of International Standard Classification of Occupations classes—finding a positive link between ICT consumption and managerial jobs, and negative ones between digital variables and mid-skill occupations.

Global Value Chain Participation, Competition, and Markups: Evidence from Ethiopian Manufacturing Firms

This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.