Published by De Gruyter Oldenbourg

Volume 73 Issue 1

Issue of Review of Economics

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Contents
Journal Overview

Publicly Available April 7, 2022

Survey

April 8, 2022

Semi-endogenous Versus Schumpeterian Growth Models: A Critical Review of the Literature and New Evidence

Dierk Herzer

Page range: 1-55

Abstract

Several studies have tested semi-endogenous versus Schumpeterian growth models using different methodological approaches. This paper critically reviews these studies including their approaches and provides new evidence on this issue, by analyzing both time-series data from the United States and panel data from 19 OECD countries over the period 1980–2014. The review finds much support for Schumpeterian growth theory, but shows that all studies reviewed have several limitations. These limitations include conceptual problems associated with the use of the number/stock of patents as a measure of the flow/stock of knowledge, the possibility of spurious regressions due to non-stationary data, potential mismeasurement of R&D inputs due to possible interpolation and deflation errors, misspecification problems that can arise in difference models when variables are cointegrated, and potential spurious rejections of the unit root hypothesis for R&D intensity when the lag length in unit root tests is too small. The present study avoids these limitations and finds strong evidence in favor of semi-endogenous growth.

Research Articles

Open Access April 8, 2022

Estimating the Effect of Transaction Costs Using the Tick Size as a Proxy

Espen Sirnes

Page range: 57-77

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Abstract

A method is proposed for estimating the effect of transaction costs on volatility, using the tick size as a proxy. The method involves three steps: (1) collect only the cases in which the tick size changes from one regime to another; (2) estimate the effect with and without the order book size; and (3) use local data on the tick size and volatility but instruments from international markets. The first step handles stationarity and dependence. The second step is used to infer the effect of a symmetric transaction cost as the tick size is a revenue and not a cost for liquidity providers. Regressions with and without the order book may therefore indicate the extent to which this asymmetry is likely to affect the result. The third step handles endogeneity. The method is applied to intraday data from the Norwegian Stock Exchange. The results show that both the tick size and the inferred transaction costs have no significant effect on volatility.

April 8, 2022

Leverage Shocks: Firm-Level Evidence on Debt Overhang and Investment

Serhan Cevik, Fedor Miryugin

Page range: 79-101

Abstract

The global economy is in the midst of an unprecedented slump caused by the coronavirus pandemic. This systemic risk like no other at a time of record-breaking debt levels, especially among non-financial firms across the world, could exacerbate corporate vulnerabilities, deepen macro-financial instability, and cause long-lasting damage to economic potential. Using data on more than 3.7 million non-financial firms from 58 countries during the period 1997–2019, we develop a two-pronged approach to investigate the relationship between corporate leverage and fixed investment spending. The empirical analysis, robust to a battery of sensitivity checks, confirm corporate leverage is highly vulnerable to disruptions in profitability and cash flow at the firm level and economic growth at the aggregate level. These findings imply that corporate debt overhang could become a strenuous burden on non-financial firms, especially if the COVID-19 pandemic lingers and global downturn becomes protracted.

About this journal

Welcome! As of 2016 the Review of Economics as well as all other journals of Lucius and Lucius Verlagsgesellschaft are published by De Gruyter Oldenbourg.

Aims and Scope
The Review of Economics (Jahrbuch für Wirtschaftswissenschaften) is a peer-reviewed general interest journal and publishes articles from all fields of economics.
Only articles with a strong policy focus are considered for publication. The Review of Economics will consider papers that are based on (i) a well defined theoretical model (ii) an empirical analysis or (iii) an experimental or (iv) an evidence-based framework.
The Review of Economics is also highly interested in survey articles on important policy issues.
Since the Review of Economics intends to deliver a forum for policy contributions and to influence the public debate we guarantee a quick and efficient referee process (the initial publication decision will be made within a maximum of 90 days). The editors may decide to publish papers without a referee process whenever authors send their submissions together with the referee reports and the decision letter of the previous submission and explain how they reacted to the reports. Accepted articles will be pre-published on the internet page of the journal as soon as they are accepted. Because the Review of Economics is not an e-Journal all articles also appear in a regular print version with some delay.

Partner Journal
Czech Journal of Economics and Finance

The Czech Journal of Economics and Finance (ISSN 0015-1920) is an English-language, double-blind refereed academic journal published in Prague since 1951. It devotes special attention to monetary economics, public finance, financial economics, and international economics, but it is open to high-quality papers from all fields of modern economics. The editors prefer empirically oriented papers, but do not exclude review articles or theoretical contributions provided that they are of high quality and relevant to the journal's aims.

Volume 73 Issue 1

Issue of Review of Economics

Frontmatter

Semi-endogenous Versus Schumpeterian Growth Models: A Critical Review of the Literature and New Evidence

Abstract

Estimating the Effect of Transaction Costs Using the Tick Size as a Proxy

Abstract

Leverage Shocks: Firm-Level Evidence on Debt Overhang and Investment

Abstract