The third way: the renewal of social democracy

/pdf/the-impact-of-entrepreneurship-on-economic-growth-3fd9un458b.pdf

The Impact of Entrepreneurship on Economic Growth

The present chapter deals with the consequences of entrepreneurship for macro-economic growth. It consists of eight sections: (1) Introduction; (2) The influence of economic development on entrepreneurship; (3) Types of entrepreneurship and their relation to economic growth; (4) The effects of the choice between entrepreneurship and employment; (5) Entrepreneurship in endogenous growth models; (6) Strands of empirical evidence; (7) The time lag structure; and (8) Conclusion.

/pdf/the-impact-of-entrepreneurship-on-economic-growth-5avkm2r7b2.pdf

Geography and Trade

In the present paper we address the relationship between business ownership and economic development. We will focus upon three issues. First, how is the equilibrium rate of business ownership related to the stage of economic development? Second, what is the speed of convergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership hamper economic growth? Hypotheses concerning all three issues are formulated in the framework of a new two-equation model. We find confirmation for the hypothesized economic growth penalty on deviations from the equilibrium rate of business ownership using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development.

/pdf/economic-development-and-business-ownership-an-analysis-4a8kogxfbn.pdf

Economic Development and Business Ownership: An Analysis Using Data of 23 OECD Countries in the Period 1976–1996

The attempt to define the term “competitiveness of nations” has reached the phase of decreasing returns. Fortunately, the literature seems to be converging slightly, a tendency, we hope to accelerate. We propose (1) defining competitiveness as “the ability of a country or location to create welfare.” We maintain (2) that a comprehensive evaluation contains an output evaluation and a process evaluation. We claim (3) that the output evaluation (competitiveness achieved) is closely related to a welfare assessment, with a specific slant and stepwise operationalisations. Furthermore, (4) process evaluation (investigating the ability) is related to the analysis of production and technology functions, adding qualitative elements like strategies, and the strengths and weaknesses of a country. This consensus is at variance with the concept of price competitiveness; it sidelines the importance of external balances, while the productivity approach to competitiveness is nested within. Dangerous obsessions and wrong policy conclusions can never be excluded, but are much less likely if we use this approach to competitiveness—as compared to concepts focusing on price competitiveness or on external balances. Specifically, the greater competitiveness of one country must not necessarily go hand in hand with lower competitiveness in other countries. In advanced countries specifically, policies promoting the ability to create welfare will create positive spillovers into other economies.

Competitiveness: From a Dangerous Obsession to a Welfare Creating Ability with Positive Externalities

https://www.tandfonline.com/doi/pdf/10.1080/15140326.2004.12040610

Industrial Specialisation and Geographic Concentration: Two Sides of the Same Coin? Not for the European Union

This paper proposes using the unit value of exports to discriminate between markets in which the quantity traded depends more on price competition and those markets in which the quantity traded depends more on non-price competition. The unit value of the exports is a measure available at practically all levels of disaggregation. This measure thus enables us to judge competitiveness for broad industries as well as to trace its sources and structures in narrowly defined product markets. The author proposes an easy way to discriminate between industries in which low unit values signal low costs and those industries in which high unit values signal high quality or highly processed goods, and he applies this concept of revealed price elasticity (REVELAST) to the German economy. Copyright 1997 by Oxford University Press.

The use of unit values to discriminate between price and quality competition

Real world industrial policy is often poorly designed and always heavily opposed. Good intentions are overshadowed by bad outcomes. However, no commonly accepted definition exists; concepts differ across nations, regions, stage of development and over time. After switching from the sectoral to the horizontal approach—and facing never ending problems with targeting, large projects and specific technologies—industrial policy seemed to phase out at the end of the last century. Recently, interest has re-emerged, due to globalisation, outsourcing, low growth and high unemployment (specifically in Europe). We present evidence on past strategies and the performances of various concepts. We describe the new “matrix approach to industrial policy” developed by the European Commission. Finally, we venture to define elements of a “Systemic Industrial Policy”. This new type of industrial policy differs decisively from policies of the past, and has been receiving an impetus from the EU “Lisbon Strategy”, as well as from the rise of China and the new EU member countries. It is the complementary policy to globalisation, increasing its benefits and empowering and retraining potential losers. Systemic Industrial Policy supports basic education, training and entrepreneurship in developing countries, promotes FDI and exports in catching-up economies and merges with innovation strategies, cluster policy and dynamic competitiveness in high income countries. It goes beyond combating market failures, as it builds on economic laws, comparative and competitive advantages and changing specialisation patterns. It acknowledges limited knowledge of policy makers, mutual learning and co-operation between firms, institutions and government.

Industrial Policy: A Dying Breed or A Re-emerging Phoenix

After a period of decline in interest and premature predictions of demise, industrial policy is back on the scene. Avariety of trends have contributed to the renewed interest. In the developingworld, there has been a pushback against the market-fundamentalist approach, typically associated with the Washington Consensus. Even when growth rates have been high, economies in Sub-Saharan Africa and Latin America have experienced unsatisfactory rates of productive transformation and shortfalls in generating quality jobs in manufacturing or modern services. This has created a demand for proactive government policies to diversify and upgrade economies beyond simply freeing up markets. In the advanced economies, generalized labor market malaise and the lingering effects of the financial crisis have produced similar effects. Low growth dynamics occurred especially in the euro zone, as countries with trade and budget double deficits with a common currency struggled to come out of the crisis. The continuing decline in the employment shares of manufacturing in the USA and Western European countries and the increasing competitive threat posed by China on world markets have pushed in the same direction. Interest in Journal of Industry, Competition and Trade https://doi.org/10.1007/s10842-019-00322-3

/pdf/rebirth-of-industrial-policy-and-an-agenda-for-the-twenty-1munxevan1.pdf

Karl Aiginger

Papers

Competitiveness: From a Dangerous Obsession to a Welfare Creating Ability with Positive Externalities

Industrial Specialisation and Geographic Concentration: Two Sides of the Same Coin? Not for the European Union

The use of unit values to discriminate between price and quality competition

Industrial Policy: A Dying Breed or A Re-emerging Phoenix

Rebirth of Industrial Policy and an Agenda for the Twenty-First Century