Working Papers

Listed below are the Working Papers to date from SPINTAN. We hope you find them of interest, please feel free to contact the corresponding author or SPINTAN (info@spintan.net) with your comments.

SPINTAN Working Paper No. 23
A proposal for disentangling funded R&D (GBARD) by industry
Matilde Mas, Eva Benages, Juan Fernández de Guevara, Laura Hernández
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In this paper we develop a methodology to disentangle public R&D expenditure (GBARD) by NACE industries and to identify the part devoted to ICT assets within each sector. We start from the methodology developed by Stančik (2012). Essentially, our methodology is based on the definition of a NACE-NABS correspondence and the construction of proper weights to assign GBARD by NABS into each NACE industry. The weights are based on the assumption that R&D intensity in each industry is related to the share of labour costs of employees with higher education over total labour costs. Finally, to compute the part of R&D expenditure devoted to ICT assets in each NACE industry, we assume that it is proportional to the share of labour costs of employees with higher education performing ICT occupations. The methodology is applied to the European Union and the Member States since 2006. The database comprises 37 NACE Rev. 2 industries.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-23
SPINTAN Working Paper No. 22
Real time estimation for policy analysis
Fabio Bacchini, Roberto Iannaccone
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Usually last data for intangible assets are available when data for use table are released that is, at least for European statistical system, more than 2 years from the reference period. However policy makers need updated pictures for a fine tuning of their political proposal. To fill this gap, this paper proposes a methodology for real time estimation that take explicitly into account the heterogeneity of the intangible assets. Particularly for the assets related to the use table we present a three step procedure that uses all the most recent information available from national account and in Short-Term Statistics domain. The procedure has been applied using as case study Italian economy obtaining a provisional picture of the nominal investment in intangible that can be more timely.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-22
SPINTAN Working Paper No. 21
Investment in organisational capital: methodology and panel estimates
Marie Le Mouel, Luca Marcolin, Mariagrazia Squicciarini
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This work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in OECD countries. OC is defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms. Country-specific occupations accruing to the generation of OC are identified on cross-country worker data reported in the OECD Programme for the International Assessment of Adult Competencies (PIAAC). In-house investment in OC is then estimated à la Corrado, Hulten and Sichel (2009) as 20% of wages paid to OC-related occupations. Total investment in OC for 2012 is found to range from 1.4% of value added in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC, with total investment in OC is higher in services than in manufacturing. Extending the methodology to estimate a panel of industry-level investment for 20 EU countries and the U.S. yields similar patterns. Experimental figures of OC investment for the public sector suggest that intensity in investment in OC appears to be higher in the public sector than in the private sector.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-21
SPINTAN Working Paper No. 20
The role of intangibles in school performance: a case study for England
Lucy Stokes, David Wilkinson, Alex Bryson
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This paper explores the role of intangibles in schools, through a case study for England. The education sector forms a significant part of the public sector; in the UK, expenditure on education accounted for around 11 per cent of total public spending in 2014-15 (HM Treasury, 2015). A better understanding of the role and extent of intangible investment in schools therefore has the potential to make an important contribution to measurement of intangibles in the public sector overall. In this paper we focus specifically on the role of organisational capital. We make use of administrative data on the school workforce in England, which allows us to identify not only staff within the leadership group but also staff outside of the leadership group, such as classroom teachers, who hold leadership roles in addition to their teaching post. We find evidence of considerable variation in organisational capital across secondary schools in England. Our results indicate a positive and statistically significant association between organisational capital and school performance, measured in terms of attainment. We also find evidence to support the notion that organisational capital is not just embodied in senior leaders, but also in others within the workforce who contribute to leadership and management. We also explore changes in leadership in response to school inspection, with the aim of exploring whether schools make changes to organisational capital following inspection, particularly if they obtain a poor inspection result. We find some evidence in support of this; as schools rated satisfactory show an increase in the relative size of their broader leadership group following inspection. Overall, our analysis provides tentative evidence that organisational capital matters for school performance. Furthermore, the results provide further support for the importance of considering contributions to organisational capital beyond those made by individuals in the main leadership group.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-20
SPINTAN Working Paper No. 19
Measuring Education Services as Intangible Social Infrastructure
Carol Corrado, Mary O’Mahony, Lea Samek
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The starting point for this paper is that society's consumption of education services is the acquisition of schooling knowledge assets whose change in value should be included in saving and net investment. We estimate the nominal value of education services produced by the public sector by using the Jorgenson- Fraumeni lifetime income approach. Enrolments by education type are multiplied by the amount by which lifetime earnings at that age, sex, and education change with additional qualifications taking account of the extra time required to achieve that additional education. Implementing this approach requires a number of assumptions on estimating wages net of experience, taking account of international students who pay for the cost of their tuition, survival rates, the discount rate and deflators. The model is estimated using data for the UK under a range of assumptions. The ratio of our preferred measure to education expenditures is just under three, suggesting that society obtains a very high economic benefit from education.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-19
SPINTAN Working Paper No. 18
A Valuation of the Long-Term Socioeconomic Contributions of the European Higher Education Institutions
José Manuel Pastor, Lorenzo Serrano, Ángel Soler
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This study analyses the contribution of Higher Education Institutions (HEIs) to the socio-economic development of the EU and each of its 28 members over the period 2000-2014. For this purpose, we examine the contributions of HEIs both through their educational and research activities. In the first case, we take into account the direct impact of higher education on the human capital of individuals, as well as the indirect impact on employment rates given the greater participation and employability, ceteris paribus, of people with higher education. In the second case, we study the contribution of the R&D of HEIs to technological capital. To carry out the analysis, counterfactual scenarios which assume that HEIs do not exist are estimated for each country. These counterfactual scenarios serve as a reference to estimate the impact of HEIs, applying techniques of growth accounting. The results obtained indicate that HEIs are a significant source of growth in EU countries, also contributing to mitigating the adverse effects of the periods of crisis. For the whole of the EU, the estimates show that GDP per capita would currently be more than one fifth higher than that corresponding to a scenario without HEIs. The results obtained also show the differences in GDP per capita between EU countries of up to 15% associated with the activity of HEIs.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-18
SPINTAN Working Paper No. 17
Public ICT investment in reaction to the economic crises – a case study on measuring IT-related intangibles in the Public Sector
Marianne Saam, Laura Weinhardt, Lukas Trottner
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In this paper, we (1) analyze the German public IT-spending programme 2009-11 adopted after the crisis in terms of its tangible vs. intangible output, (2) consider this relatively well-described programme as a use case for categorizing IT-related intangibles in government beyond software in (including e.g., IT-training, innovation in e-services), (3) investigate how to form insightful aggregates of intangible IT-related investment from project level data and, in comparison, from the regular public budget in Germany. Based on project descriptions, we find out that half of the spending was on IT security-related projects. According to our estimations based on quantitative information, qualitative information and approximations, about half of the total spending was on intangibles, of which again about half went into software and a quarter into consulting. As an outputbased measure some assets created in the programme, we propose the category “concepts”.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-17
SPINTAN Working Paper No. 16
Public Investment in R&D in reaction to economic crises – a longitudinal study for OECD countries
Maikel Pellens, Bettina Peters, Christian Rammer, Georg Licht
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The paper investigates the reaction of public R&D spending on economic crises. We are interested in two counteracting motives: On the one hand, public R&D spending can be seen as a means to fight the crisis, and governments may decide to increase their R&D budgets. On the other hand, a crisis reduces public income and urges governments to cut spending, which may negatively affect public R&D budgets. Using panel data from 26 OECD countries over the period 1995 to 2015, we investigate how public R&D expenditure changes over the business cycle for different types of government R&D expenditure. On average, we find evidence for a strong pro-cyclical effect on public R&D investments. But country heterogeneity matters. Whereas European innovation leaders and non-EU countries pursue a counter-cyclical strategy, innovation followers and moderate innovators behave pro-cyclical. This leads to an increasing innovation gap in Europe. Short-run and long-run financing conditions (budget surplus and government debt levels) also significantly affect public R&D spending. However, there is no evidence that economic crises systematically affect the composition of public R&D spending along different thematic areas or by beneficiaries.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-16
SPINTAN Working Paper No. 15
Intangible capital: Complement or substitute in the creation of public goods?
Alexander Schiersch, Martin Gornig
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This paper tests whether intangible capital is a substitute or, to some degree, a complement to standard inputs in the production process. The analysis is conducted for public sectors in which governmental institutions are directly responsible for both, efficiently producing public goods as well as for the investment in new production factors. Knowing the substitutability of inputs is important for achieving the best possible result for the invested money, inter alia, when designing stimulus programs. The analysis is carried out using threeinput two-level nested value added CES production functions. The analysis reveals that intangible capital is just weakly substitutable with other inputs. This result implies that any investment plan or any stimulus program should not just focus on tangible assets, but also needs to include investments in intangibles in order to achieve the maximum output and to efficiently use public money. It also follows that investment programs for tangible assets should not be undermined by austerity programs focused on intangible assets.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-15
SPINTAN Working Paper No. 14
Structural changes in Public Expenditures in the European Union since 2008 – with special regard to new member states
Éva Palócz, Zoltán Matheika, Péter Vakhal
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This paper analyses the reasons for growing size and the change in the structure of public expenditures in the European Union since 2007, with special regard to the New Member States (NMS). In the first part, by using the decomposition technic, the increase of expenditure ratio-to-GDP will be separated to 1) the impact of the change in GDP and 2) the effect of the change of actual public expenditures. The calculation shows that in 2009, mainly the fall of GDP was responsible for the rise in the expenditure ratio. This means that the “automatic stabilizer” was more important in shaping the fiscal trends in the year of the acute crisis than the demand-boosting actions. Taken, however, the entire period since 2008, the higher expenditure ratio in 2014 can exclusively explained by the expenditure effect. Beyond the average, there is a great variety both in the old and in the new member states. Concerning the structure of raising expenditure ratio, the paper uses the COFOG statistics measured by the share in GDP. The main characteristic of the changes can be summarized by the growing share of expenditures on social protection and health since 2008, in the EU28 average. In NMS, however, the share of expenditures on social protection decreased since the global crisis.
DOI http://dx.medra.org/10.12842/SPINTAN-WP-14