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SummaryThe recession that started in 2008 caused a sharp deterioration of the budget balance of Spain. This decline was not fully anticipated by the structural budget balance due to some methodology limitations. In this article, we calculate an alternative structural balance for Spain in the years prior to the subprime crisis that includes residential investment as an explanatory variable. This estimate shows that by 2004 the Spanish fiscal situation was not as strong as presumed. This fragility was hidden by the extraordinary revenue from the real estate bubble and the construction boom.

This article estimates the effect of transport infrastructure at country level, on employment, productivity (total factor productivity (TFP), and their components technical efficiency–pure and the scale—and technological change) and economic growth, using a dynamic panel approach. We focus on two broad categories of transport infrastructure: (1) road density and (2) road paved. Using dynamic panel GMM system estimation, we find positive effects of road density and road paved on total factor productivity (TFP) in countries with middle low and low income (using parametric and non-parametric estimations). On the other hand, and taking into account the Deng’s hypothesis of a nonlinearity relationship between transport infrastructure and economic growth (Deng, 2013, Transport Reviews 33(6): 686–99), we found empirical evidence about a Kuznets curve when we consider the percentage of roads paved. In countries with middle low and low income, we also found a Kuznets curve between road density and unemployment. JEL Classification: H54, R42, O47, O4, C23

This paper examines two sources of global knowledge spillovers: foreign direct investments (FDI) and trade. Empirical evidence demonstrates that FDI and trade can contribute to overall domestic productivity growth only when the technology gap between domestic and foreign firms is not too large and when a sufficient absorptive capacity is available in domestic firms. In this paper we propose the terms R&D and Labor quality to capture the innovative and absorptive capacity of the country. The spillovers effects in productivity are analyzed using a stochastic frontier (SFA) approach. This productivity (in terms of total factor productivity) is decomposed using a generalized Malmquist output-oriented index, in order to evaluate the specific effect in technical change (TC), technical efficiency change (TEC) and scale efficiency change (SEC). Using country-level data for 16 Latin American countries for the period 1996-2006, the empirical analysis shows positive productivity spillovers from FDI and trade only when the country has absorptive capacity in terms of R&D. FDI and trade spillovers are found to be positive and significant for scale efficiency change and total productivity factor change.

This article evaluates the effect of the overdraft facility (or line of credit) policy by comparing a large sample of overdraft facilitated firms and matched non-overdraft facilitated firms from Eastern Europe at sector level. The sample firms are compared with respect to rates of different performance indicators including: technical efficiency (a Data Envelopment Analysis -DEA -approach is applied to estimate technical efficiency level for individual sectors), production workers trained, expenditures of R&D, and export activity. In order to avoid the selectivity problem, propensity score matching methodologies are adopted. Results suggest that a certain level of overdraft facility given to a firm would be needed to stimulate investment in R&D, which will eventually result in growth in productivity.