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Studies on intra‐regional inequality are scarce, particularly for European countries. This paper aims at further investigating inequality by focusing on wage differences within regions. We consider the case of Portugal, which is considered one of the countries with the highest economic inequality. In particular, we analyse the evolution of intra‐regional wage inequality between 1995 and 2005, employing the quantile based decomposition suggested by Melly (2005), which allows us to study inequality along the entire wage distribution. Our results show that wage inequality evolution has been different for the several regions, as it increased in some regions and decreased in others. Different changes in the work force composition explain these diverse developments.

Na avaliação da qualidade ou desempenho das universidades, as questões associadas com o sucesso na procura de emprego por parte dos seus diplomados têm vindo a ganhar importância dada a evolução na configuração jurídica das universidades. Para além disso, nos últimos anos, tem sido cada vez mais difícil para os licenciados encontrar o seu primeiro emprego, na sequência do agravamento das condições do mercado de trabalho em geral. Este trabalho analisa os fatores que se revelam explicativos do tempo de procura de emprego pelos recém-licenciados da Universidade de Évora. Para tal usamos uma amostra de 767 estudantes e estimam-se várias especificações de modelos de duração a tempo discreto. Os resultados mostram que existem diferenças significativas entre os estudantes dos diversos cursos, salientando-se os cursos de Economia, Engenharia e de Gestão, e destacam a importância da nota final do curso. Por outro lado, não se encontram diferenças significativas entre estudantes do sexo feminino e masculino e os diplomados mais jovens parecerem estar numa situação de desvantagem em relação aos mais diplomados mais velhos.

A traditional way of looking at the importance of universities assumes that these are sources of many positive effects from the point of view of the inputs, i.e. from a demand side perspective. In accordance to this perspective, the importance of a university can be measured by its multiplier effects, at a regional or national level. This perspective can be complemented with the analysis of the issues associated with the transition to work by their graduates. The paper thus analyses the factors that reveal to be explanatory of the time spent by first degree students of a small university in Portugal, the University of Évora, in order to enter the labour market. In doing so, we employ a sample of 767 students and estimate several specifications of discrete-time duration models. The results show that there are significant differences among the students from the several courses and highlight the importance of the final mark in the course. On the other hand, we did find any significant differences between male and female students.

In this paper we characterise the dynamics of trade among Central and Eastern European Countries (CEEC) and the EU using several methodologies that evaluate the type of trade and price-quality ranges. The analysis shows a significant decline in inter-industrial trade and an increasing specialisation in vertical intra-industry trade (IIT). Moreover, we found substantial differences in the unit values of exported and imported goods, which suggest that the increasing weight of IIT in the EU-CEEC trade did not result from a convergence on the factorial contents of the traded goods. Using a panel data approach we also identify the determinants of both vertical and horizontal IIT. The results suggest that there are some differences in the determinants of these types of trade, although both seem to have a statistically significant relationship with a country's size and foreign direct investment.

Les investissements directs jouent un rôle crucial dans les procédés de la convergence réelle et nominale des pays récemment intégrés dans l’Union Européenne. Ils proportionnent les moyens financiers pour la restructuration économique, l’implémentation et l’actualisation technologique et de la culture d’affaires orientée pour le marché. Les investissements étrangers, un des visages les plus visibles de l’intégration économique ont été, et sont encore, avidement recherchés, et avec du succès, par les gouvernements de l’Europe Centrale et Orientale. Cette impressionnante augmentation des flux de l’investissement par rapport aux économies de transition a provoqué de la peur en ce qui concerne les déplacements de l’investissement, en spécial du côté des pays situés au Sud de l’Union Européenne. Ce travail évalue les aspects déterminants des investissements étrangers et calcule l’existence d’un détour vers l’Est, en regardant particulièrement le Portugal, le pays qui est souvent identifié comme celui qui a le plus perdu avec le cinquième élargissement de l’Union Européenne.

In this paper we use two alternative approaches to study the extent of gender wage discrimination in Portugal. Both methods involve the estimation of wage equations for males and females and the Blinder [1973] and Oaxaca [1973] decomposition. However, to take into account possible sample selection bias, we consider both parametric and semi-parametric methods. First, we consider a parametric approach that relies on distributional assumptions about the distribution of the error terms in the model (Vella (1992, 1998) and Wooldridge (1998)). Within this approach, if the distributional assumption is not satisfied, the parameters’ estimates may be inconsistent. Secondly, we apply Li and Wooldridge [2002] semi-parametric estimator, which does not assume any known distribution on the joint distribution of the errors of the wage equation and of the sample selection equation; the distribution has an unknown form and is estimated through non-parametric kernel techniques.We employ micro data for Portugal from the European Community Household Panel (ECHP). The results from both approaches provide evidence in favour of the existence of gender wage discrimination in Portugal. However, the extent of labour market discrimination decreases when sample selection bias corrections are taken into account.

In this paper we analyse the characteristics and evolution of the EU-CEEC trade in the last decade, giving particular attention to trade relations among the CEEC. We study the determinants of both total and sectoral trade flows and investigate the potential bilateral trade among all the countries. The analysis is based on the gravity model approach using panel data from 1993 to 2001. The results highlight the sectoral differences in the EU-CEEC trade developments. Furthermore, it is possible to conclude that there is still scope for growth on bilateral trade flows between some CEEC and some of the EU countries and especially among the new EU members.

Female self-employment has been increasing steadily over the last years in many countries. However, not much is know about women’s decision to become self-employed, especially in Europe. Some few studies typically conclude that most women choose self-employment because it offers more flexibility to combine work and family responsibilities or because of discrimination. Portugal displays one of the highest rates of self-employment in Europe and is one of the countries where the number of self-employed women has increased more. This paper studies gender differences in the determinants of self-employment in Portugal. Unlike other countries, there is no evidence that women choose self-employment because of family reasons. However, there are some suggestions that the choice of self-employment is driven by economic necessity, particularly in the case of women.

En este trabajo analizamos las características y evolución del comercio UEPECOs en la última década, prestando especial atención a las relaciones comerciales entre los mismos PECOs. Estudiamos los determinantes tanto de los flujos comerciales totales como de los sectoriales e investigamos el comercio bilaterial potencial entre todos estos países. El análisis se basa en el enfoque de los modelos de gravedad, utilizando datos de panel de entre 1993 y 2001. Los resultados subrayan las diferencias sectoriales entre los desarrollos comerciales de UE-PECOs. Es más, es posible concluir que aún hay margen para el crecimiento del comercio bilateral entre algunos PECOs y algunos países de la UE, especialmente los nuevos países miembros. __________________________________________In this paper we analyse the characteristics and evolution of the EU-CEEC trade in the last decade, giving particular attention to trade relations among the CEEC. We study the determinants of both total and sectoral trade flows and investigate the potential bilateral trade among all the countries. The analysis is based on the gravity model approach using panel data from 1993 to 2001. The results highlight the sectoral differences in the EU-CEEC trade developments. Furthermore, it is possible to conclude that there is still scope for growth on bilateral trade flows between some CEEC and some of the EU countries and especially among the new EU members.

Most trade between the European Union (EU) and the Central and Eastern European Countries (CEEC) is inter-industrial in nature, based on comparative advantages. However, recent studies have uncovered structural changes in the nature of trade, the most unexpected being the rapid increase in Intra-industry trade (IIT). In this paper we characterise the dynamics of the CEEC-EU trade using several methodologies that evaluate the type of trade and price-quality ranges. The analysis confirms that there was a significant decline in inter-industrial trade and an increasing specialisation in vertical IIT. Moreover, we found substantial differences in the unit values of exported and imported goods, which suggest that the increasing weight of IIT in the EU-CEEC trade does not result from the factorial contents convergence of the traded goods. Therefore, these trends indicate the emergence of a new division of labour in the enlarged EU. Using a panel data approach we also identify the determinants of vertical and horizontal IIT. The results allow us to conclude that there are some differences in the determinants of these types of trade, although both seem to have a statistically significant relationship with country’s size and Foreign Direct Investment flows.

O quinto alargamento da União Europeia (UE) tem sido objecto de numerosas análises que, de uma forma geral, o consideram como um jogo de soma positiva. De facto, ainda que se possa antecipar que os maiores ganhos serão usufruídos pelos novos membros, o alargamento do mercado comum será também fonte de importantes benefícios para os mais antigos. Não obstante, haverá também perdedores, sendo Portugal o país mais vezes citado como potencial prejudicado com o alargamento da União a leste. Segundo Baldwin, François e Portes (1997), Portugal será o único perdedor líquido devido ao grande peso que o sector têxtil tem na economia portuguesa, sendo este o que previsivelmente mais sofrerá os efeitos negativos do alargamento. Breuss (2002) antecipa que todos os países da Europa central e oriental (PECO) ganharão, em média, dez vezes mais que os membros mais antigos da UE, tendo estes ganhos relativamente modestos estimados em cerca de 0.5% de crescimento do produto real. Este estudo também identifica países onde os custos económicos do alargamento irão ultrapassar os benefícios: Espanha, Dinamarca e, especialmente, Portugal.

Is foreign direct investment crossing Europe towards the East? During the last few years, news of foreign direct disinvestments have regularly emerged on the Portuguese media. The group of suspects have been identified as the new European Union members, where low wages, low corporate taxes and a highly educated labour force seems to attract multinationals eager to cut costs in an economy slowly recovering from recession. The clues of investment displacements abound, but no definite proof has yet been found in the empirical literature. This paper considers the available evidence, contributing to avoid possibly unfair incriminations.

The recent enlargement of the European Union (EU) to Central and Eastern European countries (CEEC), and to the islands of Malta and Cyprus, is an unparalleled process in the life of the Union given the diversity and economic dimension of the countries involved. The membership of nations evolving from centrally planned to market economies is challenging and requires structural adjustments that are not possible without a high capacity of adaptation on the part of national agents and institutions. In this context, the project Ezoneplus – the Eastward Enlargement of the Eurozone, financed by the European Commission’s 5th framework program, emerged as a large scale research scheme, integrating a set of partners that include, apart from the Department of Economics of Évora University, a number of institutions from old and new EU members. The main objective of this research project was to evaluate the main consequences and implications from EU’s Eastern enlargement, in terms of goods, services and factors’ markets adjustments, and of the functioning of economic policies in the new institutional framework. Specific research tasks were assigned to the different consortium teams, and the Évora team assumed the responsibility of coordinating the research on the expected impacts upon international trade and foreign direct investments (FDI) flows. Within the three year framework of the project many dissemination activities were developed. Six international conferences were organised, various books edited and a number of papers were published in renowned journals. Twenty five working papers were produced and are available in the project’s internet site (http://www.ezoneplus.org/). As expected, the Évora team was deeply committed to this project, producing all the reports requested by the European Commission, and presenting its research results in working papers, in journal articles and in seminars and conferences. The present publication is another dissemination effort and its main purpose is the presentation, in a joint and integral version, of the documents produced on the expected impacts of the EU enlargement, in terms of trade and FDI. For methodological reasons the material is presented in the original form, trying to preserve the texts global coherence amidst the different requirements of the different phases of research. As a result, some statistic data and bibliographic references may have become somewhat out of date. The structure of the publication reflects the time developments of the research, highlighting the concluding elements of the distinct parts of the work developed. In an introductory note the main characteristics of the project are presented. Chapter 1 displays the early research tasks, comprehending our topic’s State of the Art from a theoretical and empirical point of view. It was completed in January 2002. Following this, the empirical assessments were developed, originating a report published by mid 2002, and reproduced in Chapter 2. The last chapter summarises the dynamics of trade and FDI flows during CEEC’ transition and accession to EU. The main opportunities and risks in the context of full membership are identified and an analysis of the future sustainability of new members’ development models is performed. This document, completed in April 2004, identifies some relevant aspects that are susceptible of being targeted for public authorities’ intervention and contains a number of economic policy recommendations

The process of international economic integration has been continuously reinforced over the past decade. Such phenomenon is especially visible at the regional level, with the increase of Regional Integration Agreements (RIA), such as Mercosur, ASEAN, NAFTA and the project of European Union (EU) Eastern enlargement. Trade and Foreign Direct Investment (FDI) flows are generally recognised as the two main channels of economic integration. Consequently, the most relevant issues in the debate on RIA relate to trade creation, trade diversion and to the possible reallocation of FDI and the respective economic effects. Since the beginning of the negotiation process for the Eastern enlargement of the EU, trade and FDI have played an important role in the approximation of member states and applicants. CEEC' transition phase to a market economy may now be considered as completed, since the geographical reorientation of trade seems to have reached its limits. Industrial recovery and rapidly rising levels of productivity in these countries induced changes in the sectoral composition of output, which will in turn influence trade patterns. The flows of FDI to the CEEC and the establishing of subcontracting agreements with EU industrial firms have become substantial, and were crucial to the restructuring process of industrial production and of international trade. The implementation of production and distribution networks involving Eastern and Western European firms has contributed to a stronger integration of Eastern firms in the world economy, in spite of the fact that some forms of alliance have not generated the upgrade or the technological autonomy of these firms. In the context of the enlargement, there is a potential risk of generalization of such forms of industrial cooperation, contributing to an asymmetric integration of Europe. The CEEC' integration in the EU will promote a broad market liberalisation and a higher level of economic and monetary stability. The new competitive environment will reinforce the role of the market as a mechanism of economic adjustment and of efficient resource allocation. As a consequence, the process of industrial and entrepreneurial restructuring, and the sectoral and geographical reorientation of trade patterns of the countries involved will be reinforced.

The change of economic, social and political orientation in Central and Eastern European countries (CEEC), together with their expressed intention of joining the European Union (EU) in a foreseeable future, have raised a number of challenging questions. One object of interest has been the implications of Eastern openness in terms of international capital reallocation. This paper concentrates on the issue of foreign direct investment (FDI), which is considered a major channel of economic integration. In fact, in the particular case of these countries, a dramatic change in the pattern of FDI inflows took place in recent years. A number of studies have surveyed the determinants of FDI to this region but the issue still remains relatively unexplored from the empirical point of view. Using a random effects panel data model in the analysis, we try to empirically uncover the main determinants of FDI and to examine the probability of FDI diversion from the EU periphery to these transition economies. This issue is especially interesting for the EU periphery in general, and for cheap labour suppliers such as Portugal in particular, since there are reasons to believe that ‘the east may be getting what would otherwise come south’.

The Eastern Enlargement represents an opportunity for trade growth for all the European Union (EU) countries. In fact, trade between the EU and the Central and Eastern European countries (CEEC) has increased considerably in the nineties. However, both benefits and losses from trade expansion do not equally affect all countries and regions inside the EU. This paper focus on the analysis of the potential bilateral trade flows between the EU and the CEEC and in special between the CEEC and the Southern European countries. The analysis is based on the gravity model approach using panel data from 1993 to 1999. It is possible to conclude that there is still scope for further expansion of the trade flows between some CEEC and some of the EU countries, in particular of some Southern countries.

The begining of the transition process in the CEEC witnessed a remarkable increase in FDI flows to the region. Although not equally benefiting all countries, such growth in external investment has been an important source of financing for industry and economic development. In addition, FDI is usually considered the fastest way of transfering intangible assets such as access to international markets, new technologies and also market-oriented business culture to the previously centrally controlled economies. These are especially important, given the plans of EU membership shared by all these countries.Competition to activelly attract FDI has therefore been fierce, becoming one of the driving forces of the structural reforms implemented in these countries to improve investment conditions for foreign firms.A number of studies have focused, both theoretically and empirically, on the motives that lead enterpreneurs to engage in international application of funds, and on the motivesthat make some locations more attractive for certain types of projects than others. At the EU level, reduction of overall risk is probably one critical aspect, since every enlargement has generated a boost of FDI flows to the new members. In the case of the CEEC, however, the transition to a market economy and the prospect of future participation in the EU have, in most cases, a priori triggered the process.In this analysis, robust econometric techniques are employed to model FDI flows, to identify their main determinants, and to try to anticipate future trends of foreign investments in the CEEC and in two of the so-called cohesion countries, Portugal and Spain. the latter is done with the objective of ascertaining diversion of direct investment funds from peripheral EU countries to the CEEC.

Este trabalho de investigação analisa a evolução da estrutura da produção e da produtividade associada aos factores produtivos.Tendo por objectivo uma análise das alterações estruturais que ao longo da década tiveram lugar na indústria transformadora portuguesa, foi utilizada para o efeito uma metodologia baseada numa função de produção translogarítmica, através da qual foram extraídas as elasticidades de produção relativas aos factores produtivos genericamente agrupados em trabalho, matérias e capital, e calculadas as respectivas produtividades marginais. A produção da indústria cresceu 16,8% apenas com o contributo negativo do sector dos Têxteis. Digna de realce a contribuição dos Produtos Metálicos, que registou uma taxa de crescimento na ordem dos 50%, o que pode indiciar um resultado positivo da política industrial, no correspondente a uma maior incorporação de valor acrescentado e alguma alteração da base industrial portuguesa. Os resultados também sugerem, que a transformadora em geral passou aproximadamente a necessitar de mais 54% de capital nos processos produtivos, para realizar o mesmo nível de produção. Os factores trabalho e matérias registaram um aumento global da produtividade de 5,34% e de 14,56% durante o período. Estes factores também apresentaram acréscimos significativos na sua contribuição para o valor da produção da indústria, respectivamente de 9,16% e 17,7%. A análise sectorial revela uma diferente evolução da produtividade dos factores nos quatro maiores sectores.

The objective of this study is to examine recent developments in trade and FDI flows between the EU and the CEEC, trying to anticipate future consequences from the economic integration of the two blocks. Economic theory suggests that integration conveys positive effects upon welfare, due to the reallocation of resources and the restructuring of production and trade. The Eastern enlargement represents both an opportunity and a risk for the EU members as well as for the CEEC. As a result of the differences in size between the two groups of countries involved, it is likely that on average the CEEC will face the highest risks but may also experience the largest benefits. It is expected that both trade and FDI flows will increase with deeper economic integration. However, the free circulation of goods, services and capital over a wider geographic area creates opportunities for the exploitation of scale economies, which may lead to the geographical concentration of production. Therefore, in spite of the expected positive global effects, it is acknowledged that, during the transition period, difficulties may arise in those sectors, regions and firms confronted with new competitive challenges. In the CEEC, transition from centrally planned to market economies coexists with the plans for future integration in the EU. Both processes prompt internal and external liberalisation processes, with social and economic consequences that are difficult to predict. In order to develop a coherent study in such a complex context, an attempt is made to integrate different analytical perspectives. The exhaustive assessment of the changes in the pattern of trade between candidates and current EU members comprehends an analysis of the global intensity of trade flows and of potential trade creation and diversion effects. The study also examines tendencies for sectoral specialisation and the evolution of the position of countries in the process of international segmentation of production. In respect to FDI, an empirical assessment of its main determinants is followed by the evaluation of potential diversion of investment flows from the EU periphery to the CEEC.