Contents of issue 3/2013
Paweł Smaga - The European Systemic Risk Board and its Impact on Financial Stability in the European Union, summary
Dorota Wawrzyniak - Corporate Taxation as a Determinant of Foreign Direct Investment in the European Union, summary
Andrzej Cieślik, Bartłomiej Rokicki - The Impact of Cohesion Policy on Production and Employment in Polish Regions, summary
Aldona Mrówczyńska-Kamińska - The Role of Agribusiness in European Union Countries, summary
Ewa Kiryluk-Dryjska, Agnieszka Baer-Nawrocka - The International Competitiveness of Polish Dairy Products Under Milk Market Liberalization, summary
Book Review: Maria Drozdowicz-Bieć, Cykle i wskaźniki koniunktury
(Business Cycles and Market Sentiment Indicators), Wydawnictwo Poltext, Warsaw 2012, 248 pp. - reviewed by Marek Lubiński
Paweł Smaga - The European Systemic Risk Board and its Impact on Financial Stability in the European Union
The article aims to answer a number of research questions. The first question concerns some major gaps in financial system regulation and in the safety net that have been exposed by the latest global financial crisis. Another question is how the banking sector will be influenced by the ongoing reforms in financial regulation and supervision. The article also examines the impact of the first three recommendations issued by the European Systemic Risk Board (ESRB) and the use of macroprudential tools on the functioning and stability of the financial system and the financial services market in the EU.
The research methods used by the author include a literature review, empirical studies, and a comparative method.
The analysis of the first three recommendations issued by the ESRB and the potential use of macroprudential tools by national authorities leads the author to conclude that these recommendations and tools can have a significant impact on the functioning of the EU’s financial system. On the plus side, they can help strengthen financial stability and reduce systemic risk and the so-called contagion effect. However, this could take place at the expense of a negative effect on lending at the level of individual financial institutions. Other negativeimplications could include limited growth opportunities and constrained availability and variety of financial products and services offered, accompanied by increased supervisory and disclosure requirements. The benefits and the costs are likely to be unevenly distributed in time, according to the author. His analysis of reform measures so far indicates that benefits should be visible at the macroeconomic level, while the costs are likely to affect individual institutions at the microeconomic level.
The emergence of a banking union in the EU will have a profound impact on the functioning of the ESRB, Smaga says, as the European Central Bank (ECB) acting as a pan-European supervisor will become the target of the ESRB’s recommendations, which requires changes in the current relationships between the ESRB and the ECB. The challenges faced by the ESRB also include the need to develop an effective policy mix with the ECB’s monetary policy, compile a list of Systemically Important Financial Institutions (SIFIs), and develop a universal and objective method to assess the effectiveness of implementing ESRB recommendations.Keywords
: ESRB, macroprudential policy, financial stability, financial crisisJEL classification codes
: E58, G01, G28Article
Dorota Wawrzyniak - Corporate Taxation as a Determinant of Foreign Direct Investment in the European Union
The paper analyzes the impact of corporate tax rate differentials between countries on foreign direct investment in European Union countries using panel data on bilateral FDI flows. The author’s research assumptions are that foreign direct investment responds to tax rate differentials between countries and that taxation has a negative impact on FDI, which means that lower tax rates attract FDI.
The article examines the relationship between corporate taxation and FDI using data for all 27 EU member countries over the period 1998-2009. The econometric analysis is based on an augmented gravity model.
The empirical results indicate that the reaction of foreign direct investment to forward-looking effective tax rate differentials between countries is negative. This outcome implies that lowering effective tax rates in the host country relative to the investing country increases net FDI outflows from the home country. However, such a relationship between corporate taxation and FDI is not confirmed by empirical evidence for the statutory tax rate. This may suggest that, in their location decisions, investors take into account the effective indicators of the corporate tax burden, which depends not only on the statutory tax rate but also on other aspects of the tax system determining the amount of tax paid, the author concludes.Keywords
: foreign direct investment, FDI determinants, corporate taxation, effective tax rates, European UnionJEL classification codes
: F21, H25, H87Article
Andrzej Cieślik, Bartłomiej Rokicki - The Impact of Cohesion Policy on Production and Employment in Polish Regions
The main aim of the paper is an ex-post assessment of the 2004-2006 European cohesion policy programs in Poland. The authors analyze the potential impact of structural interventions on production and employment in Polish regions at the NUTS2 level.
Instead of the typical demand and short-term approach dominant in the majority of previous studies, the authors rely on a supply approach based on an augmented regional production function. Moreover, the authors take into account regional heterogeneity by distinguishing three different groups of regions: high-income regions, middle-income regions and low-income regions.
The authors find that the EU’s cohesion policy in Poland is effective in terms of both regional output and employment. This means that in the case of Polish regions, structural funds and the Cohesion Fund play an important role in regional economic growth and in income convergence with the “old” EU15 countries. Yet, the article also shows that the real impact of structural interventions on regional employment is much lower than suggested by previous simulations based on Computable General Equilibrium (CGE) models, the authors say.Keywords
: economic integration, infrastructure, regional policy, EU cohesion policyJEL classification codes
: F15, H54, R11, R12, R58Article
Aldona Mrówczyńska-Kamińska - The Role of Agribusiness in European Union Countries
The article aims to determine the role of agribusiness in European Union countries depending on their level of economic development. The author compares the internal structure and share of agribusiness in individual economies with regard to output and gross value added. The article also examines the relationship between the share of agriculture and the agribusiness sector in national income, on the one hand, and the level of gross value added per capita, on the other. The main research method is an input-output analysis based on the balance of flows between sectors. The research shows that in countries with a high level of GDP per capita the role of agribusiness in the economy is growing in connection with demand for high-value added food products. This means that economic growth is one of the main requirements to produce changes in agribusiness, the author says. Another requirement is that it is necessary to take full advantage of the conditions created by the rapidly growing GDP per capita, the author adds. Those member countries that joined the European Union after 2004 have seen desirable changes in the structure of agribusiness, the article says: the role of agriculture has decreased considerably, while the importance of the food industry and of companies manufacturing means of production and providing services is growing, in line with trends in countries with a higher level of socioeconomic development. From 1995 to 2007, the role of agribusiness in the economies of individual European Union countries decreased gradually, reflecting global trends. However, in countries with a lower level of socioeconomic development these changes have been much slower than in Western Europe, the article says.Keywords
: agribusiness, global production, gross value added, GDP per capita, internal structureJEL classification codes
: O13, P52, Q13Article
Ewa Kiryluk-Dryjska, Agnieszka Baer-Nawrocka - The International Competitiveness of Polish Dairy Products Under Milk Market Liberalization
The article looks at the competitiveness of Polish dairy products on the international market, examining projections through 2020. Two separate scenarios are analyzed. The first scenario assumes liberalization on the international milk market, while the second scenario assumes no change from the current trade policy. The analysis of the competitiveness of dairy products was made on an ex-post basis (for the 2004-2010 period) as well as in ex-ante terms (for 2020). The projections for 2020 were calculated using a Common Agricultural Policy Regionalized Impact (CAPRI) partial equilibrium model. To assess the competitiveness of Polish dairy products on the international market, the authors used competitiveness indexes proposed by German economist Klaus Frohberg. The competitiveness of Polish dairy products was assessed on the basis of trade results projected for the European Union.
Powdered milk was the most competitive Polish dairy product on the international market in the studied period, the authors say. The projections for this product for 2020 suggest that its price and production volume will increase. On the other hand, butter proved to be the least competitive Polish dairy product. Its net trade value and competitiveness indexes are expected to deteriorate.
The article finds that market liberalization reduces the competitiveness of Polish dairy products on the international market compared with the no-change scenario. Both the net trade values and the competitiveness indexes tend to be lower under the assumption of market liberalization, the authors conclude.Keywords
: competitiveness, international trade, milk market, model simulationsJEL classification codes
: D58, C68Article