Número: 161
Autor(es): António Portugal Duarte, Fátima Sol Murta
Mês: Maio
Ano: 2022

The aim of this paper is to analyze the macroeconomic impacts of the Covid-19 pandemic in the European Union (27 countries) and, particularly, in four of its economies – Germany, Spain, Italy and Portugal. For this purpose, a counterfactual analysis was conducted based on an ARIMA forecasting model through which the behavior of a set of macroeconomic variables (Gross Domestic Product, public debt, inflation rate, public deficit, and unemployment rate) is examined in the context of the Covid-19 pandemic against a hypothetical scenario without pandemic. In general, the results point to a significantly better performance of all variables in the four countries and in the European Union if the Covid-19 pandemic had not existed.

 

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Número: 160
Autor(es): Carlos Oliveira
Mês: Maio
Ano: 2022

Over the last three decades, wage inequality and the importance of the minimum wage presented an interesting negative correlation in Portugal. Using a semiparametric approach, counterfactual decomposition methods, and an extremely rich matched employer-employee dataset of all employees in the country, this paper presents significant visual and quantitative evidence of how the minimum wage structurally reshaped the wage distribution. The remarkable rise in the real minimum wage of 2006-2019 fully explained the sharp decline in wage inequality, and 40% of average wage growth - for women, who benefited the most, that was 60%. Spillover effects reached up to 40% above the minimum, being at times more important than the bite itself. The minimum wage reduced within and between wage in- equality in several fronts, cutting the gender wage gap by a quarter, potentially decreasing the returns to education, and raising wages of workers at less productive firms. While the minimum wage bite was felt in workers’ base wages, spillovers predominantly manifested in total wages.

 

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Número: 159
Autor(es): Roxanne Merenda
Mês: Janeiro
Ano: 2021

This paper exploits a panel data ranging from 2010 to 2019 to investigate firm-levelThis paper exploits a panel data ranging from 2010 to 2019 to investigate firm-leveldeterminants of export intensity in the Portuguese defense industry, using a fixed effectsmodel. As in any study exploiting corporate finance panel data, it is likely that some variablesare endogenous due to reverse causality. Although we address this issue, the interpretation ofour results cannot be fully causal. We find evidence that learning economies, proxied by exportpersistence, are the largest determinants associated with export intensity at firm level. Workerproductivity and firm size also play a positive and significant role. Financial indicators such asfinancial pressure and leverage ratio negatively correlate with export intensity, albeit notalways significantly. Finally, and contrary to the literature, we cannot find evidence that thePortuguese defense industry’s competitiveness rely on investment and R&D, nor is it impactedby geographical agglomeration.

 

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Número: 158
Autor(es): Rita Bessone Basto, Ana Martins e Guida Nogueira
Mês: Janeiro
Ano: 2021

The competitiveness of an economy increasingly depends on its ability to innovate. Theory suggests that innovation makes an important contribution to growth both at the firm level and at the national level. Innovative economies that deliver new differentiated products and services and/or develop more efficient production processes are often more productive, more resilient and adaptable in the face of adversity and change, and better able to support higher living standards and thus greater well-being. However, because knowledge is a public good, without government support, private agents are likely to underinvest in R&D, as it usually leads to higher social returns than private ones. In this context, it is strategically important to use public funds to promote innovative activity in firms to achieve the optimal level of R&D investment. Since 2000, indirect public support through tax credits has become more prominent and is currently the main form of public R&D support for most OECD countries. This paper evaluates the impact of SIFIDE, the Portuguese system of tax incentives to corporate R&D investment, on firms’ behaviour. The results show the effectiveness of SIFIDE in promoting investment in R&D, both through the impact of the program on intangible investment and on R&D staff.

 

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Número: 157
Autor(es): Ana Martins, Guida Nogueira and Eva Pereira
Mês: Janeiro
Ano: 2021

Outsourcing is one of the main drivers behind economic globalization, especially international outsourcing. In general terms it refers to the process of moving stages of production to external providers, either domestic (usually labelled as domestic outsourcing) or international (commonly labelled as offshoring or simply outsourcing). Over time, technological advances in transportation and ICT developments, led to a substantial rise in this phenomenon, growing in extent and nature, from simple to more complex tasks related to both manufactures and services supply. International outsourcing is usually expected to reduce production costs and to increase efficiency, however it has received substantial attention from policy makers for its potential negative consequences on the labour market. This paper combines Portuguese firm-level data from the International Sourcing surveys and longitudinal administrative business record data, to explore the impacts of the sourcing status on a variety of firms’ performance measures specially focusing on employment, competitiveness and productivity. The results suggest that international sourcing has an ambiguous effect on firm level total employment, but a positive effect on both the subset of workers that receive a salary (a proxy to employees) and on R&D jobs, coupled with an increasing effect on firm level total labour costs. Alongside these results, our findings also show that offshoring has a positive causal effect on both firm-level export intensity and trade balance, however the efficiency gains hypothesis was not confirmed. In fact, the results show that newly offshoring firms experienced lower labour productivity growth with a negative effect on both capital stock and capital per person employed.

 

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Número: 156
Autor(es): Ricardo Pinheiro Alves
Mês: Agosto
Ano: 2020

The coordination of economic policies is seen as a requirement of EMU, although there is no strong economic rationale for it. After the 2008-2010 crises a complex surveillance mechanism was implemented where the European Semester had the role to coordinate economic and social policies in order to obtain real convergence between countries and prevent further instability. However, it has been ineffective in helping Southern countries to converge, deepening existing divisions and threatening further exits after the UK. This ineffectiveness and a democratically flawed decision-making process ask for a change in the framework of policy coordination. The proposed solution mixes an idle approach based on fiscal transfers with an engaged one where coordination over significant spillover effects between countries and cooperation based on Pareto improvements are the rules. It reinvigorates the governance of the single market, focuses on the spatial distribution of economic activity and it is a decentralized answer to the common threat of division. Moreover, it complies with the two core ideas of the EU project: democracy, from which peace depends, and development within a market economy where countries are free to choose their way of development.

 

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Número: 155
Autor(es): Susana Peralta, João Pereira dos Santos and Duarte Gonçalves
Mês: Julho
Ano: 2020

We provide causal estimates of the impact of short-term rental regulations by exploiting a quasi-natural reform implemented in the city of Lisbon. In November 2018, the municipality of Lisbon banned the registry of new short-term rental properties in some neighborhoods. We rely on two administrative data sets on short-term rental registries, between 2015 and 2019, and house transactions between 2017 and 2019. We also use data on Airbnb rental prices since 2018. We employ a difference-in differences estimation taking advantage of the spatial discontinuity in the registry ban. We document a spike in new registries between the announcement and the implementation of the ban, driven by domestic incumbent owners. Airbnb prices do not seem to react to the ban. Both the number of transactions and house prices decreased after the reform, mostly in two-bedroom flats. Our findings confirm a sizeable impact of short-term rentals on real estate prices, concentrated in a segment of smaller houses.

 

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Número: 154
Autor(es): F. Alexandre, P. Bação, J. Cerejeira, H. Costa e M. Portela
Mês: Julho
Ano: 2020

Since late 2014, Portuguese Governments adopted ambitious minimum wage policies. Using linked employer-employee data, we provide an econometric evaluation of the impact of those policies. Our estimates suggest that minimum wage increases reduced employment growth and profitability, in particular for financially distressed firms. We also conclude that minimum wage increases had a positive impact on firms’ exit, again amplified for financially distressed firms. According to these results, minimum wage policies may have had a supply side effect by accelerating the exit of low profitability and low productivity firms and, thus, contributing to improve aggregate productivity through a cleansing effect.

 

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Número: 153
Autor(es): Luca David Opromolla and Giordano Mion and Gianmarco I.P. Ottaviano
Mês: Julho
Ano: 2020

Understanding why certain jobs are ‘better’ than others and what implications they have for a worker’s career is clearly an important but still relatively unexplored question. We provide both a theoretical framework and a number of empirical results that help distinguishing ‘good’ from ‘bad’ jobs in terms of their impact on a worker’s lifetime wage income profile through wage jumps occurring upon changing job (‘static effects’) or through increases in the wage growth rate (‘dynamic effects’). We find that the distinction between internationally active firms and domestic firms is a meaningful empirical dividing line between employers providing ‘good’ and ‘bad’ jobs. First, in internationally active firms the experience-wage profile is much steeper than in domestic firms, especially for managers as opposed to blue-collar workers. Second, the higher lifetime wage income for managers in internationally active firms relies on the stronger accumulation of experience that these firms allow for and on the (almost) perfect portability of the accumulated dynamic wage gains to other firms. Static effects are instead much more important for blue-collar workers. Finally, the distinction between internationally active and domestic firms is relevant also at a more aggregate level to explain cross-sectional differences in wages among workers and spatial differences in average wages across regions within a country.

 

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Número: 152
Autor(es): Pedro S. Martins
Mês: Junho
Ano: 2020

As work changes, firm-provided training may become more relevant; however, there is little causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, contrasting successful firms that received the grants and unsuccessful firms that did not. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over long periods of time before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more, and are robust in multiple dimensions of the analysis.

 

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