• Crisis in the Eurozone: Causes, Dilemmas and Solutions

      Baimbridge, Mark J.; Whyman, P.B. (2015)
      This book discusses how the global financial crisis induced the 'Great Recession' and triggered problems within the eurozone regarding sovereign debt. It explores the background of the eurozone crisis, as well as outlines a number of potential solutions. The authors argue that the failure of the eurozone to meet any convergence criteria, together with unjustified emphasis placed upon unproven rules and institutions derived from contemporary neoliberal macroeconomic thinking, was an accident waiting to happen. Additionally, a series of potential remedies is proposed, ranging from a critical evaluation of solutions that the EU has already instigated (moral persuasion and financial relief measures), together with a series of alternative propositions (fiscal federalism and a 'European Clearing Union'). Moreover, the analysis is extended to the collapse of the eurozone and to options for national economic self-governance. This study, with its comprehensive analysis of the eurozone crisis, is essential reading for students, researchers and scholars of monetary economics, European economics, political science and international relations.
    • Doomed to fail? Convergence and the Eurozone crisis

      Baimbridge, Mark J.; Khadzhieva, Dzheren (2018-10)
      This chapter reviews the substantive issue of monetary union through evaluating countries readiness for entry utilising the experience of the European Union’s process of Economic and Monetary Union (EMU). The European single currency system came under unprecedented strain following the Global Financial Crisis induced Great Recession and there is little reason to assume that this will diminish, in any significant way, in the near future. Crucially it is important to reflect that each economy is unique in its blend of sectoral strengths and weaknesses and comparative advantage, therefore the national interest will be distinctively different for each potential participant. In particular, there is no set rule in which to weigh the relative merits of the arguments associated with membership of a monetary union. In terms of the eurozone the chapter critically evaluates the convergence criteria stipulated in the Treaty on European Union (TEU) and empirically reviews the compliance of EU member states. It questions whether the TEU criteria satisfactorily perform this role, such that the convergence criteria present a series of financial tests, of which some are theoretically spurious, while the remainder are inadequate to indicate the range of consequences of participation. Finally, the chapter undertakes an analysis of the macroeconomic performance of Greece. Specifically, it focuses on the main features, economic events and key economic indicators (GDP per capita, inflation, unemployment, twin deficit of current account and net lending/borrowing, output gap and gross debt) during the crucial 2000-09 period, between eurozone membership and the crisis.
    • The economic cost of membership

      Baimbridge, Mark J. (2016-06)
    • Economic implications of alternative trade relationships: post-Brexit options for the UK

      Baimbridge, Mark J.; Whyman, P.B. (2018-01)
      This chapter discuss several key issues for the UK in relation to Brexit. Firstly, how new directions could be initiated to fund infrastructure aimed at boosting the UK's future growth potential and/or promote reindustrialisation by nurturing strategic industries through the early and unknowable stages of their development until they achieve their own international competitive advantage. Secondly, we contest the belief that globalisation has created a new environment eroding the efficiency of traditional policy instruments and with it the relevance of individual nation states. Finally, in this context we conclude by arguing that Brexit offers a unique opportunity to negotiate of a new trade relationship with the EU, together with the rest of the world to both replace previous trade deals concluded by the EU, but also to establish a new set of relationships with a wider set of potential trade partners.
    • Economy and Monetary Union

      Baimbridge, Mark J. (2015)
      This chapter reviews the substantive issue of the contemporary intertwining of both national and overall EU economy in relation to the spectre of monetary union through first evaluating a country’s readiness for euro entry through a comparison between the convergence criteria stipulated in the Treaty on European Union and the theory of optimal currency areas, which leads to discussion of the economic costs and benefits of euro membership. However, given the unprecedented strain eurozone has now come under the also chapter examines the background to the current eurozone crisis; specifically, how the Global Financial Crisis induced Great Recession triggered the problems within the eurozone. Subsequently, the chapter explores how the advent of EMU has significantly redefined the operation of fiscal and monetary policy with the former retained by member states, but proscribed by EMU-wide rules, whilst the latter has been assumed by a specifically created independent central bank. Hence, the chapter explores the theoretical underpinnings of the operation of monetary and fiscal policy within EMU, where it examines the conduct, coordination and philosophy of macroeconomic policymaking. This analysis is then extended by discussing a series of potential remedies, consisting of an evaluation of EU instigated solutions, together with a series of alternative propositions. However, whilst the economic remedies to the eurozone crisis may eventually succeed, the greater long-term damage may well emerge through the political sphere with the imposition of unelected technocrat governments, together with growing dissatisfaction of mainstream political parties with support for either the far-right, protest parties, anti-euro parties, anti-EU parties, or member states losing confidence in the direction of ‘ever closer union’.
    • Fiscal federalism and European economic integration

      Baimbridge, Mark J.; Whyman, P.B. (2004)
      The pace of economic integration amongst European Union (EU) member states has accelerated considerably during the past decade, highlighted by the process of Economic and Monetary Union (EMU). Many aspects of the EU's apparatus, however, have failed to evolve in order to meets these new challenges. This book explores the issue of fiscal federalism within the context of EU integration from theoretical, historical, policy and global perspectives. It contrasts the pace of integration amongst EU member states with the failure of financial and administrative apparatus to evolve to encompass fiscal federalism, i.e. the development of a centralised budgetary system. This impressive collection, with contributions from a range of internationally respected authors, shall interest students and researchers involved with European economics and economic integration. Its accessible style will also make it extremely useful to policy-makers and professionals for whom European economic integration is a daily topic of conversation.
    • Foreign Direct Investment and economic growth in OECD countries

      Zang, Wenyu; Baimbridge, Mark J. (2014)
      The role of inward FDI on economic growth has attracted the attention of researchers for many years as its beneficial impact has been recognised theoretically by scholars and policymakers; however, the empirical evidence remains ambiguous. Hence, the objective of this chapter is to investigate the causal relationship between FDI inflows/outflows and economic growth in developed OECD countries. Investigation of the causal link between FDI inflows and growth has important implications such that if there is a unidirectional causality it would support the FDI-led growth hypothesis. Alternatively, if the causal link runs in the opposite direction, it would imply that economic growth may be a prerequisite for countries to attract FDI. Finally, if the causal process is bi-directional, FDI inflows and growth would have a reinforcing causal relationship. In particular, this chapter contributes to the existing literature by focusing on developed countries as inward/outward FDI has become an increasingly significant factor in influencing the economic activity. In contrast, most previous time-series causality studies focus on developing countries with only a few covering developed countries. However, almost all of the world’s FDI originates from developed countries and the majority of FDI is also located in developed countries. Another feature is that this chapter also tests the causal link between outward FDI and economic growth. Outward FDI might promote the home country’s economic growth as it might yield higher profits, transfer technology and management skills to the home country, expand production abroad, secure raw materials overseas and avoid trade barriers and so on. Following an Introduction, the chapter then reviews FDI trend across OECD countries. Next it discusses the alternative theories and literature exploring the relationship between FDI and economic growth (i.e. the impact of inward FDI on host country’s economic growth, the impact of outward FDI on home country’s economic growth, together with the impact of economic growth on inward/outward FDI). We then describe empirical causality testing methodology, together discussing the empirical results.
    • Informal training in Chinese small- and medium-sized enterprises

      Suseno, Y.; Bao, Chanzi; Baimbridge, Mark J.; Su, C. (2019-05)
      Entrepreneurship in small- and medium-sized enterprises are significant contributors to economic development. The purpose of this research is to examine the extent and motives for the use of informal training in Chinese SMEs. Using case studies, we found that informal training is widely used and generally accepted in Chinese SMEs. We also uncovered three separate categories on the motives for SMEs in adopting informal training based on the financial and time constraints they face, the perceived outcomes of training activities in terms of organisational performance, employee turnover, and the development of guanxi and positive team cohesion, as well as the attitudinal aspects of both managers and employees that influence their intentions in adopting a specific training approach. Our study contributes to the literature of HRM in Asia, and has important implications for the government and institutions in emerging countries to support entrepreneurship and SMEs.
    • Legislative budgetary power and fiscal discipline in the Euro Area

      Catania, M.; Litsios, I.; Baimbridge, Mark J. (2021)
      Purpose – The objective of this study is to understand the budgetary role of national legislatures in Euro Area (EA) countries and to analyse implications for fiscal discipline. Design/methodology/approach – Building on the budget institutions literature, a legislative budgetary power index for all the 19 EA countries is constructed using OECD and European Commission data as well as data generated from questionnaires to national authorities. A two-way fixed effects panel data model is then used to assess the effect of legislative budgetary power on the budget balance in the EA during 2006-15. Findings - Overall, in the EA, formal legislative powers vis-à-vis the national budgetary process are weak but there is more legislative involvement in SGP procedures and legislative budgetary organisational capacity is generally quite good. In contrast to the traditional view in the budget institutions literature, our empirical findings show that strong legislative budgetary power does not necessarily result in larger budget deficits. Research limitations/implications – Data on legislative budgeting was available from different sources and timeseries data was very limited. Practical implications – There is scope to improve democratic legitimacy of the national budgetary process in the EA, without necessarily jeopardising fiscal discipline. Originality/value – The constructed legislative budgetary power index covers all the 19 EA countries and has a broad scope covering various novel institutional characteristics. The empirical analysis contributes to the scarce literature on the impact of legislative budgeting on fiscal discipline.
    • The political economy of the European Social Model

      Whyman, P.B.; Baimbridge, Mark J.; Mullen, A. (2012-07-04)
      This book seeks to analyse the development of the European Union (EU), which was founded upon the principle of the free movement of capital, goods, services and people in 1957. Its central thesis is that, from a practical and theoretical point of view, such a basis is fundamentally at odds with the creation of an interventionist regime that the construction of a social Europe would require.
    • Problematic theoretical considerations of monetary unions

      Baimbridge, Mark J. (2018-10)
      Although the eurozone sovereign debt crisis took many by surprise following the Global Financial Crisis induced Great Recession, this chapter argues that this was an accident waiting to happen with unjustified emphasis placed upon unproven rules and institutions derived from contemporary neoliberal macroeconomic thinking. First, recent developments in macroeconomic are discussed and evaluated in terms of the so-called New Consensus Macroeconomics (NCM) that forms the current mainstream macroeconomic model comprising a blend of New Classical and New Keynesian theories is through adopting the rational behaviour hypothesis and supply-side-determined long-term equilibrium of output. A particular feature of these ideas is the inclusion of rules and institutions that are perceived to result in time consistent policymaking through essentially binding politicians from undertaking in non-optimal behaviour for either opportunistic, partisan or non-rational expectations reasons. Second, in addition to the general backdrop of macroeconomics the chapter considers the notion of a monetary union between countries under the rubric of both exogenous and endogenous Optimum Currency Area (OCA) theory. This combination of theoretical propositions form the bedrock of the eurozone where the TEU convergence criteria and SGP form the rules, while the European Central Bank is the key institution tasked with delivering low and stable price inflation. However, although these notions have become the staple diet of a generation of mainstream economists they comprehensively failed to insulate the eurozone from its sovereign debt crisis.
    • Real exchange rate and asymmetric shocks in the West African Monetary Zone (WAMZ)

      Adu, R.; Litsios, Ioannis; Baimbridge, Mark J. (2019-03)
      This paper examines real effective exchange rate (REER) responses to shocks in exchange rate determinants for the West African Monetary Zone (WAMZ) over the period 1980–2015. The analysis is based on a country-by-country VECM, and oil price, supply and demand shocks are identified using long run restrictions in a structural VAR model. We report significant differences in the response of REER to real oil price, productivity (supply) and demand preference shocks across these economies. In addition the relative contribution of these shocks to REER movements in the short and long run appears to be different across economies. Our findings suggest that the WAMZ countries are structurally different, and asymmetric shocks with inadequate adjustment mechanisms imply that a monetary union would be costly.
    • Revisiting the European social model(s) debate: challenges and prospects

      Whyman, P.B.; Baimbridge, Mark J.; Mullen, A. (2014)
      One of the distinctive features of the post-war process of European economic and political integration is the debate about the emergence of a European Social Model (ESM). Advocates and critics have clashed over the precise meaning of the ESM concept, whether it exists in a meaningful and singular form, and whether it challenges or bolsters – by providing some sort of discursive justification – the current neoliberal trajectory of the European Union (EU). While some of the claimed elements of the ESM do exist/have been adopted, this article argues that they do not constitute a coherent alternative to the dominant market liberal model and bias towards negative integration that has underpinned the EU since the 1980s. Furthermore, contemporary developments have served to further entrench these tendencies at the expense of progressive social forces that seek to construct a genuine ESM.
    • The segmentation of Europe: convergence or divergence between core and periphery?

      Baimbridge, Mark J.; Litsios, Ioannis; Jackson, Karen; Lee, Uih R. (2017)
      This book explores economic developments across Europe in relation to its apparent segmentation, as disparities widen between core and periphery countries. In contrast to previous literature, the scope of analysis is extended to Europe as a continent rather than confining it solely to the European Union, thereby providing the reader with greater insight into the core/periphery nexus. The authors commence with a critical appraisal of economic thinking in relation to regional trade agreements and monetary integration. In relation to a number of EU economies, the book addresses issues of a liquidity trap, deflation, and twin deficits, together with the interconnection between exchange rates and current account balances. Importantly, they extend the discussion of segmentation through a series of focused case studies on Russia, Brexit and emergence of the mega-regionals.
    • Towards a Settlement

      Baimbridge, Mark J.; Whyman, P.B. (2016)
    • Workplace flexibility practices and corporate performance: evidence from the British private sector

      Whyman, P.B.; Baimbridge, Mark J.; Buraimo, B.A.; Petrescu, A.I. (2015-07-14)
      This paper investigates the relationship between workplace flexibility practices (WFPs) and corporate performance using data from the British Workplace Employment Relations Survey 2004. Disaggregating WFPs into numerical, functional and cost aspects enables the analysis of their relationships to an objective measure of corporate performance, namely workplace financial turnover. Furthermore separate analyses are presented for different types of workplace: differentiated by workforce size; ownership; age; wage level; and unionization. Results show that different types of workplaces need to pay attention to the mix of WFPs they adopt. We find that certain cost WFPs (profit-related pay, merit pay and payment-by-results) have strong positive relationships with corporate performance. However, training delivers mixed corporate performance results, while the extent of job autonomy and the proportion of part-time employees in a workplace have an inverse association with corporate performance. Given the limited existing research examining disaggregated measures of WFPs and objectively measured corporate performance, this paper offers useful insights for firms, policy makers and the overall economy.