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This paper investigates the impact in the short/medium term of M&As made by 14 Italian banks quoted on the stock exchange for the period 1999–2016. After dividing the banks into two groups by size and degree of internationalisation, we sought to ascertain whether different initial conditions produce different final effects. Based on three assumptions, supported by three separate econometric approaches, our empirical analysis shows that the stronger banks increased their competitiveness while the weaker banks did not achieve the same results since they were motivated to grow "by desperation". [ABSTRACT FROM AUTHOR]

Purpose: The idea of this study is to provide a solid Financial Condition Index (FCI) that allows the monetary transmission policy to be monitored in a country which in recent decades has suffered from major financial and monetary crises. Design/methodology/approach: The authors construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime. Using monthly data from 1995 to 2017, the authors estimate FCIs with two different methodologies and build the index by taking into account the mechanism of transmission of monetary policy and incorporating the most relevant financial variables. Findings: This study's results show that, likewise for developing countries as Mexico, an FCI could be a useful tool for managing monetary policy in reducing macroeconomic fluctuations. Originality/value: Apart from building a predictor of possible financial stress, the authors construct an FCI for a central bank that pursues inflation targeting and to analyse the role of financial asset prices in formulating monetary policy. Highlights: We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime. The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR). FCI could become a new target for monetary policy within a hybrid inflation-targeting framework. FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment. [ABSTRACT FROM AUTHOR]

The establishment of incentive zones represents a cluster policy approach that a country can implement to boost economic growth. Being influenced by regional characteristics, the success of specific incentive types (special economic zones, free-trade zones, free zones) may vary considerably. By using a new composite indicator, differently designed according to each type of development plan, this study analyses 51 European incentive zones so as to identify best practices. Moreover, propensity score matching allows the net impact of the industrial policy to be assessed. The findings show significant positive results achieved by the various industrial policy instruments with differing levels of success. [ABSTRACT FROM AUTHOR]

The aim of the paper is to estimate the effects of structural public balance adjustment on growth in 25 OECD countries with special attention to selected Eurozone countries in the years 2000-2013. The estimates show a positive effect of discretionary fiscal policy on GDP growth and support the conclusion that structural adjustments have negative effects on growth irrespective of macroeconomic conditions. These results show that, if the reduction of the structural balance has to be considered as an objective to be achieved per se, such a goal should not be pursued in times of deteriorating macroeconomic conditions. Comparative Economic Studies (2014) 56, 635-656. doi: 10.1057/ces.2014.26; published online 9 October 2014 Keywords: fiscal policy, structural adjustment, growth, cross-section analysis dynamic panel data analysis, pooled mean group estimator JEL Classification: E60, E62, C21, C23, INTRODUCTION Advanced economies have been forced to manage the unsustainability of their public finances as a consequence of the 2007 financial crisis because public deficits have been increased in order [...]

This paper studies regional productive performance differentials among 243 NUTS-2 European regions for the period 2003–11. Within the last two decades the technology gap between European regions has increased considerably. Building on previous studies that have used data envelopment analysis (DEA) and which have neglected national production structures and pre-existing technological heterogeneity, we examine differences in regional productive performance by using a meta-frontier framework. Our findings confirm significant differences in productive performance across European regions and a large North–South technology gap. A panel vector autoregression (PVAR) shows that this regional technology gap can be attributed to differences in human capital and innovation activity. [ABSTRACT FROM AUTHOR]

The development of effective risk sharing mechanisms is one of the main passages for the success and longevity of a monetary union. In this paper, we study risk sharing, measured as income and consumption smoothing, in the EMU. As we employ time‐varying estimations, we are able to retrieve time patterns of risk sharing for each member country and to compare them with the degree of economic asymmetry within the EMU. Other than documenting the need for stronger risk sharing mechanisms in the EMU, our results also suggest that much more attention should be dedicated to fostering homogeneity in risk sharing across member countries. We document the existence of increasing heterogeneity in the risk sharing capacity between member countries that can potentially exacerbate and amplify the impact of asymmetric shocks and further destabilize the EMU. [ABSTRACT FROM AUTHOR]

Pivoting on the idea that differences in production and financial systems may affect monetary transmission mechanisms, a global vector autoregressive (GVAR) model is built and the effectiveness of monetary policy on the real economy in the Italian regions in the period 2000–16 is tested, also taking interaction effects into account. The results show that regional gross domestic product responds positively, but asymmetrically to an expansionary monetary policy, while prices fall in the short run. It is also shown that short- and long-term interest rates react in accordance with theory. [ABSTRACT FROM AUTHOR]