Projekty badawcze

Non-market valuation of cultural goods: the case of performing arts

UMO-2014/15/N/HS4/01441 - PRELUDIUM

This research project addresses the problem of valuing cultural goods that is a part of a broader issue in cultural economics: evaluation of public cultural policies that include scale and rules of division of public support’s for culture. The main aim for the research is to learn and formulate, in monetary categories, a total economic value of benefits which members of the society gain from art production. Preferences of culture’s recipients in the extent of utility connected with different types of theatre performances –the primary product of performing arts -is the object of this research. It undertakes methodological andempirical issues which haven’t been solved in earlier cultural economics studies.

In particular, the research will examine non-market value of potential changes in attributes of theatre performances (like the type of performance and it’s quality, quantity and price) that can be observed as a result of increase or decrease in public support for performing arts. Deep inquiry will be undertaken to examine presence of passive-use values associated with providing theatre performances, meaning that members of society that are not theatre goers also gain some satisfaction associated with performances delivered by theatres. The highly probable heterogeneity of cultural preferences in relation to some attributes of theatre performances will be considered.

On a methodological level the aim of this project is to develop econometric methods used in culturaleconomics by adapting the advanced non-market valuation methods to analyse the problem area of performing arts’ economics.

The research will be conducted with the use of non-market valuation techniques designed and developed for the aim of estimating benefits gained by consumers of public and mixed goods, example of which are theatre performances. Contingent valuation method, in the variant of choice experiment, based on the analysis of stated preferences is the principal tool used in the project. This method ensures that total value of analysed good is captured, including passive use values. Application of a specially designed survey enables collection of the required data. Theatre performances will be described in the survey by a set of their characteristics (attributes) defined precisely in a preliminary stage of the project. Both, positive as well as negative possible changes in these attributes will be described in hypothetical scenarios presented to respondents. Therefore they will elicit their preferences as willingness to pay for desired change or willingness to accept for the undesired one. The outcome will be analysed to estimate the utility function parameters, which relate to particular attributes of the good. The econometric tools enabling modelling the heterogeneity of preferences will be employed. The group of respondents will consist of representative subset of Polish society including both people who do as well as those who do not visit theatres. The survey will be conducted by a professional public opinion research company.

The project’s research will contribute to the development of cultural economics by providing new knowledge about the value of performing arts and consumer preferences, as well as in widening the catalogue of tools used for valuing cultural goods. It will give a chance to participate in current scientific debates, as observed in international journals from the JRC and ERIH lists. There are very few papers considering non-market value of performing arts, even fewer that apply choice experiment. None of them combine two important elements: [1] the analysis of all types of performances available in theatres in a nationwide scale (that enables generalisation of outcomes for a broader range of phenomena) and [2] the analysis of both people who attend theatres and those who gain only passive use benefits (that being a total value eliciting requirement). The proposed project will contain both of these elements.

Non-market valuation of cultural goods give the empirical evidence allowing verification of arguments posed by economists as means of support for justification of public subsidies for culture. It can be used as a way to express value of culture alternative to those criticised in recent years, by which culture is treated instrumentally i.e. as a tool for increasing GDP or employment.

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Determinants of earnings in Poland

UMO-2015/19/B/HS4/03231 - OPUS

The aim of the project is to find out which factors determine different wages levels in Poland, both among different professional groups and within each group. We will utilize a harmonised database on wages in the Polish economy which was created in the previous project financed by National Science Centre (No. DEC-2013/09/B/HS4/01304). It has been constructed by merging the statistical information from two databases: the Labour Force Survey data (LFS) and the Structure of Wages and Salaries by Occupations (SWS) as both of them have some limitations.

The data on wages from the LFS are survey data and due to the reluctance of the respondents, particularly those with higher incomes, to answer the question about wages, they are downward biased. In addition, a very low percentage of responses to the question on wages among people with higher income make these data not representative for the whole population of employees.

Data from the SWS are fully reliable, because the reports come from business entities submitted to the Central Statistical Office. However, due to the fact that the dataset includes entities employing at least 10 people, the SWS data are not representative for the whole economy. The combination of both datasets enabled us to obtain a unique database on salaries of employees, representative for the whole economy. The database contains information on monthly net wages and detailed information about the individual characteristics of workers (age, gender, education, work experience, occupation) and workplace (economic sector, ownership sector, company size and region). In this project we will describe the actual relationship of wages for men and women in different occupational groups in Poland and how they have evolved over time. We will name the factors that determine wage differences both between occupational groups and within them.

The effect of resource misallocation on growth when large structural shocks occur.

UMO-2014/13/B/HS4/03260 - OPUS

The main goal of the project is to analyze the patterns of firmsurvival in the case of a large structuralshock. Specific context of this process is provided by eventual misallocation of resources (e.g. excessive or insufficient K/L ratio). This was the situation of Polish state owned enterprises (SOEs) on the verge of transition from a centrally planned economy to a market one. In the project we aim to verify the following hypothesis: the growth of a region is predetermined by resources (mis)allocation. We interpret predetermination by the persistence of resources (mis)allocation. In addition to the main hypothesis we postulate that there is a nonlinear relationship between the extent of misallocation and growth –in addition to very low, also very high misallocation could be conducive to growth, due specialization and/or potentially very high restructuring effects. In combination with the SOEs data on survival (at plant level) this will also help to establish the scope of excessive versus justified bankruptcies, thus yielding grounds for pinpointing the value generated by management decisions and ownership change.

This is an empirical project (microeconometric), rooted in three strands of the literature: firm survival, privatization of SOEs and resources misallocation. During the course ofthe project we will conduct studies three types of analyzes. First, we intend to identify industry, cohort and regional extent of resourcemisallocation. We use a unique source of plant-level data for Polish SOEs prior to 1989 as well as firm level data from the transition and post-transition phase to measure the original allocation of resources.

We will proxy the extent of pre-transition (mis)allocation by three indicators: industry-specific K/L ratio in other countries, region-specific K/L ratio by foreign firms within each industry in Poland and the extent of region-specific change in K/L ratio within each industry (on top of nation-wide changes within each of these industries). Second, we aim to verify the link between the resource misallocation and growthwithin region and industry, decomposing the growth into part attributable to reducing misallocation and part attributable to total factor productivity (TFP) growth. The benchmark for TFP growth will be inferred from firm-level data on SOE incumbents from other CEECs and from firm-level data on private newly established firms (NEFs). Third, we hope to identify which firms should go into bankruptcy and whichshould not by the means of using the general link between region and industry-specific resource misallocation and unique data on the survival pre-transition SOE plants in Poland. The mismatch between the model prediction and the actual survival patterns provides ground to tentatively judge the role of management and ownership changes in fostering survival of SOEs (successful reallocation).

We will use the modern methods to estimate TFP and as well as survival models and employ unique dataset on Polish SOE census plants which comprise data on capital, labor, sales revenues in addition to region and industry identifiers. Benchmarks for other countries of the region and private NEFs will be derived from dedicated firm-level microeconomic data (Amadeus for foreign firms, for Polish firms we will additionally obtain data from and F01/02 forms from the Central Statistical Office).

With the exception of Czech case –which followed a very specific privatization program –to the best of our knowledge there is no empirical analyses concerning the entire census of plant-level data. Given the poor representativeness for SOEs for early years of transition in survey-based studies, our analyses will be unique. In addition, the analyses will use the natural experiment of economic transition to identify the nature of the response to a large structural shock. Such events are fairly popular (e.g. recent collapse of a construction sector in Spain or tourism in MENA countries), which lends policy relevance to our study. Finally, wehope to contribute to the literature by verifying the hypothesis of the link between the misallocation and growth in the context of large structural shock.

Moreover, as part of the project we will compile and publish for free a database from a field study collecting data on Polish SOE census of plants pre-transition, together with an indication of subsequent survival. This data will be complemented with a full documentation as well as non-technical description for the general audience.

Impact of credit volatility on productivity growth

UMO-2015/17/B/HS4/01063 - OPUS

The objective of the project is to assess the impact of volatility of the amount of credit on productivity. The analysis will be conducted at the sectoral andaggregate levels in a broad group of developing and developed countries observed over a 50-year period. The Polish case will be scrutinized using aggregate data spanning two decades. The proposed research will fill the gap in existing literature that focuses on the productivity-enhancing role of the mean value of credit extended to the private sector.

The project hypothesizes that the volatility of credit supply has sizable effects on productivity growth.The project complements the existing research on the role of financial development in growth and technological progress. The literature focuses on the impact of the level of financial development proxied by the stock of credit to the private sector. The project innovativeness consists in examining the long-run consequences of credit volatility for productivity.

Determinants of foreign direct investment in Poland

UMO-2015/19/B/HS4/03230 - OPUS

Multinational enterprises with their rapidly increasing shares in world output, investment and trade flows have become the main actors in the ongoing globalization of the world economy. From the mid-1980s onwards foreign direct investment made by MNEs grew more rapidly than both world trade and world GDP. FDI originates predominantly form developed countries which have been at the same time the majorrecipients of FDI. In the last several years also Poland has emerged as one of the most attractive host countries for multinational firms among the new European Union member countries. While many theories have been proposed to explain the internationalization of production two distinct hypotheses why a firm should go multinational have been proposed in the literature: market seeking and efficiency seeking. According to the first one MNEs are vehicles to overcome distance and lower costs of foreign markets access. Foreign direct investment undertaken to serve local markets is often called horizontal FDI and refers to producing abroad roughly the same goods and services as in the parent country. According to the second one MNEs internationalize production in order to get access to inputs at a lower cost. Foreign direct investment undertaken with the aim of reducing production costs is often called vertical FDI as it involves fragmenting production processes and locating each stage in the country where the factors used intensively in that particular stage are relatively cheap. These two alternative hypotheses have very different empirical implications.

The main goal of the proposed research project will be to validate empirically the theoreticalpredictions of competing models of multinational enterprise and identify the main reasons for undertaking FDI in Poland using bilateral panel data on inward FDI during the last two decades. The empirical study will directly refer to the so-called new theories of multinational enterprise that will allow formulating a number of empirically testable hypotheses concerning the absolute and relative country size, differences in relative factor endowments and transaction costs associated with trade and FDI. In particular, the proposed study will attempt to verify the hypothesis that Poland’s accession to the EU resulted in increased FDI, having controlled for other factors that may affect investment decisions. The proposed empirical research will be carried out for all the countries of origin of foreign capital jointly, as well as by individual groups of countries, including the old and new European Union countries, as well as third countries which are not members of the European Union.

The proposed research will contribute to better understanding of the reasons for FDI in Poland and differentiate between horizontal and vertical FDI originating not only from other EU Member States, but also from third countries. It will also determine the effects of the Polish accession to the EU for the total amount of FDI as well as FDI made by particular groups of investing countries. Better understanding of the causes of FDI will also contribute to better understanding of the effects of FDI in the Polish economy, in particular their impact on themarkets of goods and services, as well as production factors markets and the labor market in particular. This will enable to also develop recommendations for the economic policies, in particular employment policies as well as policies aimed at attract particular types of FDI from different geographical areas.

Taxes as determinants of firm competitiveness - micro and macroeconomic perspectives.

UMO-2014/13/B/HS4/00394 - OPUS

The objective of this project is to understand better the link between taxation and performance of the economy. The optimal tax rates permit maximizing the fiscal revenue without reducing excessively the business activity.

Analysis of the professional macroeconomic forecasts from the perspective of business cycle changes and financial market movements.

UMO-2015/17/N/HS4/00209 - PRELUDIUM

Evaluation of the current state of the economy and proper projections for the future conditions are both significant questions, frequently asked not only by the economists, but also consumers, entrepreneurs and policy makers. Special importance is put on the so called early warning signals, which allow early recognition of the significant changes in the economic developments.

Innovation activity and export competitiveness in the new EU member countries.

UMO-2015/17/B/HS4/01077 - OPUS

Innovation is one of the key terms related to the modernization and development of the EU economy. However, the formal empirical studies devoted to the subject in the context of international competitiveness at the firm level are relatively few. Previous studies have focused almost exclusively on the analysis of companies in developed countries such as Germany or the United Kingdom, with a high level of innovation of companies. In addition, these studies have mainly focused on product and process innovation.

The main objective of the project is to analyze the relationship between innovation at the firm level and their export competitiveness in Poland and other New Member States (NMS) of the European Union (EU), divided into four groups: the Visegrad countries (Czech Republic, Poland, Slovakia, Hungary), the Baltic countries (Estonia, Lithuania, Latvia), Southern European countries (Bulgaria and Romania) and the countries of former Yugoslavia (Croatia and Slovenia).

In particular, the objective of the proposed research is an empirical verification of the main research hypothesis concerning the positive relationship betweeninnovation activities and exporting. One of the key elements of innovation activity, which has been the subject of previous studies for the old EU member states, is the research and development (R&D). Measures of innovative activity of companies can include spending on R&D as well as its effects, such as patents and share of new products in total sales. In our proposed study we will analyze the relationship between various forms of firm innovative activity and their exports in the NMS.

Our detailed hypotheses postulate the existence of relationships between firm export performance and different types of innovation activities: product, process, marketing, organizational and managerial innovations. In this project we plan to determine which of the aforementioned types of innovation activity is of the greatest importance for exporting and whether it depends on firm size.

In our project we will investigate whether indeed innovative activities contribute to the efficiency of companies from NMS of the EU countries and improve their ability to compete in international markets. The proposed study will identify the importance of individual types of innovation activities affecting the international competitiveness of companies from NMS. In contrast to previous studies conducted for selected EU-15 countries, our study will be based on comparable firm-level data, which include all NMS of the EU.

In our project we aim at prosing a set of policy conclusions that can apply to NMS. The firms from those countries are lagging behind in terms of innovation activities and their presence in foreign markets is still limited compared to the firms from the old EU-15. In particular, we will verify whether the relatively cheaper types of innovation, such as marketing innovations and organizational and managerial can also affect the firm export, thus improving the competitiveness of the economies of these countries. This is particularly important in the light of changes in the allocation of the EU funds in the current Financial Perspective, i.e. increasing expenditure for innovative firms, aimed at increasing their presence in the global markets. This study should also contribute to a better understanding of the mechanisms of cooperation between managers, engineers, scientists and research centers serving to create new processes, products and technological progress as well as social development of the NMS.

Reaction times in economic experiments on behavior under risk and cooperative behaviors.

UMO-2014/13/B/HS4/00458 - OPUS

There are two main goals of the project. First, we will develop a new, efficient technique of identifying the relationship between decision time and contents of the decision in economic experiments. Second, we will apply this technique in two specific fields: decision making under risk and other-regarding preference. We will thus be able to contribute to our understanding of how time pressure affects willingness to take a risk and willingness to supportothers or cooperate with them. We hypothesize that time pressure will tend to leadto a) more noise/errors in the data, b) greater polarization of behaviors, c) more cooperation and d) less probability sensitivity. It remains an open question whether time pressure will lead to more or less risk seeking in general.

The essential innovation of our approach lies in the incentive scheme to be used. In a typical experiment only the final decision matters; by contrast, our subjects will have to keep indicating what they are choosing at any point in time. Accordingly, they will know that any second of given round of experiment may be randomly selected to determine payments. They will thus have an incentive to make a quick initial decision, yet continue considering switching to the other option until the end of the round. In this way we will elicit both crude, intuitivedecision and one based on more deliberation from the same subject and for the same problem at hand. We consider this a major innovation, the only closely related technique being applied in a very different context by Agranov et al. (2013).

We will use our elicitation technique to investigate other-regarding preference as it shows up in simple cooperation dilemmas as well as binary dictatorial choices designed by Charnessand Rabin (2002). We will alsoelicit risk posture within the framework of Prospect Theory using the method proposed by Abdellaoui, Bleichrodt and l’Haridon (2008). Additionally, we will address the relationship between willingness to take risk and response time using field experiments—we will set up poker tournaments with longer vs. shorter decision time limits and record participants’ behavior