Funded Projects

Competitive Growth Theory (01/03/2018-31/08/2018) / Andreas Irmen

• Funding: FNR-INTER MOBILITY
• Period covered: 01/03/2018-31/08/2018
• Supervisor: Andreas Irmen
• Summary:This project is about the development of a novel and original theory of macro-economic growth by conducting research work with globally leading scholars at their home institutions, more precisely with Prof. Hippolyte d'Albis at the Paris School of Economics and Professor Oded Gabor at Brown University in the US. The main engine of economic growth is technical change. The central conceptual novelty is that innovation investments are undertaken by entrepeneurs operating in a perfectly competitive environment.

International Migration Policy and Law Analysis Database (01/09/2015-30/04/2018) / Michel Beine

• Funding: PUL-University of Luxembourg
• Period covered: 01/09/2015 to 30/04/2018
• Supervisor: Michel Beine
• Collaborator: Diana Igret (to 30/10/2017)
• Partners: University of Harvard, University of Amsterdam, University of Sydney and the London School of Economics.
• Summary: Immigration policies have become increasingly complex. Despite many important measurements efforts, there is no comprehensive cross country data on immigration policies and no established method for classifying, measuring and comparing immigration law and policies.

Spatial Optima and the Social Benefits of Urban Green Space (01/04/2015-30/09/2018) / Pierre M. Picard (Co-supervisor)

• Funding: PUL-University of Luxembourg
• Period covered: 01/04/2015 to 30/09/2018
• Supervisor: Geoffrey Caruso (UL, FLSHASE, IPSE)
• Co-supervisor: Pierre M Picard (UL, CREA)
• Collaborators: 1 Post-doc and 1 PhD
• Summary: This project considers the social benefits of urban green space. The value of green space for people is widely reported, but knowledge gaps exist about how the spatial distribution, size and proximity of green space affect its use and valuation across different income groups. Moreover there is currently no comprehensive spatial micro-economic model that includes the complexity of interactions between green space and different household groups. These gaps must be researched in order to address the welfare optimality and equity of urban structures and green space distribution, especially since residential markets sort households by income in space, and because green space can potentially be ‘clubbed’ in some neighborhoods. The project will contribute further understanding of the interactions between green space and households’ sorting in cities and will identify planning strategies or forms of cooperation or pricing that can lead to a higher social outcome than emerging land market equilibria.

AGECON C (Population Aging: An Exploration of its Effect on Economic Performance and Culture) (01/05/2015-30/04/2018) / Andreas Irmen

• Funding: PUL-University of Luxembourg
• Period covered: 01/05/2015-30/04/2018 
• Supervisor: Andreas Irmen
• Co-supervisor: Gautham Tripathi (Professor)
• Collaborators: Amer Tabakovic and Anastasia Litina (Post-Docs)
• Summary: The project focuses on two aspects of population aging. First, it studies its effect on economic growth. Second, it explores a novel aspect of aging, namely its effect on innovative activity and cultural attitudes towards innovation. Population aging is a worldwide empirical phenomenon. Over the next 50 years, the median age of the global population will rise to 36.2 years; the old-age dependency ratio for Europe will be close to ½ in 2050, implying significant changes in the workforce age distribution.
  Thus, a comprehensive understanding of the channels through which aging affects societies is critical. To achieve this, the research team of the project intends to perform the 3 following tasks.
  I) A theoretical investigation of the effect of an increase in the old-age dependency ratio on the type of technical change.
  II) A theoretical investigation of the effect of the workforce age distribution on economic outcomes through its effect on technology adoption.
  III) An empirical exploration of the effect of aging on innovation and on cultural attitudes towards novel ideas and innovative activity. In a nutshell, do old societies think old or new ideas?
  The analysis will derive a set of theoretical predictions and empirical results, suggestive of policies needed to address the issue of aging. Unlike existing work the proposed research includes both economic and cultural aspects of population aging. This research agenda is novel and gives rise to a new literature on the cultural aspects of aging.

Reconciling the Uneasy Relationship between Economics and Personal Data Privacy (01/04/2015 - 31/03/2018) / Benteng Zou (Co-supervisor)

• Funding: PUL-University of Luxembourg
• Period covered: 01/04/2015 to 31/03/2018
• Supervisor: Peter Ryan (UL, SNT)
• Co-supervisor: Benteng Zou (UL, CREA)
• Collaborators: 1 Post-doc and 1 PhD
• Summary:  Personal data is nowadays a common commodity in the web space,but our understanding of cost–benefit trade-offs that individuals undertake when getting involved in digital transactions and disclosing personal data is far from complete. On the one hand, users benefit from personalisation of products and contributing to the societal good, but, on the other hand, might be locked into services and suffer from severe privacy risks, e.g. that data may be compromised once disclosed to a service provider.
  In this project, we carry out interdisciplinary research to bridge the theory-practice gap in tackling the privacy issues associated with personal data. We (economists and information security researchers) will investigate the economic incentives behind users’ participation in the systems, and subsequently establish a model for gains and costs in the two application scenarios. Then, we will apply the concept of mechanism design to our scenarios, and propose mechanisms for safeguarding users’ utility and privacy against rational attackers. Finally, we will propose new cryptographic protocols to complement the developed mechanisms and provide the security protection against potential malicious and irrational attackers. The task is essential twofold:  economics understanding and modelling, and realization of (rational) cryptographic protocols.

Optimal policies in the market for childcare: theory and evidence from Luxembourg (01/05/2015 to 30/04/2018) / Arnaud Dupuy

• Funding: FNR-CORE
• Period covered: 01/05/2015 to 30/04/2018
• Supervisor: Arnaud Dupuy
• Partners: LISER
• Summary: Childcare provision is an important societal challenge for developed countries. Given the numerous reasons for governments to promote the availability and quality of childcare services, there has been a dramatic increase in the number of available places in the last decade. Still, waiting lists remain in the childcare sector of most European countries.
  The childcare market is characterized by a complex heterogeneous supply composed of public, private and informal providers competing in prices and quality, and a heterogeneous demand. It is crucial to understand how this complex market structure is affected by different forms of public interventions, including direct provision, subsidization and regulations. Yet, little is known about “optimal” practices from a theoretical viewpoint. Are those policies efficient instruments to improve accessibility and quality? How do those policies affect demand, the behavior of private providers and the structure of the sector?
  This project aims at analyzing the childcare sector in order to assess the desirability and optimality of alternative policy measures.
  Our contribution will first consist of (1) a theoretical microeconomic model, which will incorporate the key features of the market. This model will allow us to address the initial questions: what is the optimal design of public policies? What are the expected (and less expected) impacts of existing policies in Luxembourg? The predictions derived from this general theory will then be confronted with the reality of the Luxembourgish childcare market following two distinct and complementary approaches. First, a structural analysis involving both the supply and demand sides of the market will be provided by means of a unifying matching-hedonic model, which will be developed and tested for Luxembourg (2.a). This method will provide structural estimates of households’ willingness to pay for childcare quality, and will allow us to evaluate the impact of various childcare policies such as quality standards and vouchers through counter factual analyses. The second approach will be based on advanced impact evaluation methods (2.b) to analyze the impact of the 2009 reform on formal childcare use and mothers’ labor supply.

On the costs of knowledge privatization (01/05/2014-30/04/2020) / Katrin Hussinger

• Funding: Marie Curie Integration Grant
• Period covered: 01/05/2014-30/04/2020
• Supervisor: Katrin Hussinger
• Summary: This project will, first, investigate the extent to which the introduction of software patents led to a privatisation of knowledge. In other words, the switch from publications in academic journals and proceedings to patents by individual software engineers will be scrutinised. In the next steps, implications of knowledge privatisation for corporate productivity and industry concentration of R&D will be investigated. Since the introduction of US software patents coincided with the internet revolution control samples from Europe will be used. Europe did not experience an introduction of software patents in the 1990s so that the comparison allows to separate patent regulation induced effects from macroeconomic shocks.

Post-Merger Integration of Innovative Assets and Innovation Outcome (01/07/2014-31/08/2018) / Katrin Hussinger

• Funding: PUL - University of Luxembourg
• Period covered: 01/07/2014-31/08/2018
• Supervisor: Katrin Hussinger
• Collaborator: Marta Arroyabe (PhD)
• Summary: This project is the first to go beyond case study evidence and to provide such an analysis on a large scale. A method for making different post-merger integration strategies for innovative assets visible on a large scale will be proposed. The method focuses on changes of the inventive labour force composition before and after the M&A. Based on different inventor employment patterns, different integration strategies will be identified.
  The results of the project will improve our understanding of post-merger innovation performance and inform managers about promising post-merger integration strategies. Recommendations for integration strategies under specific economic and strategic conditions will be made.

The relation between listed forms’ risk reporting and accounting conservatism -Evidence from selected countries in Europe (01/03/2015-30/06/2019) / Anke Muessig

• Funding: CORE-FNR
• Period covered: 01/03/2015-30/06/2019
• Supervisor: Anke Muessig
• Collaborators: 1 PhD
• Partners: Kerstin Lopatta, Carl von Ossietzky (University of Oldenburg)
• Summary: This research project deals with firms’ risk reporting behaviours in management commentaries and its accounting conservatism in selected EU member states. The project is led by Anke Muessig. It is a joint research project with Kerstin Lopatta and Carl von Ossietzky from the University of Oldenburg.

Family Business in Luxembourg (15/05/2016 to 30/04/2018) / Denise E Fletcher

• Funding: PwC Luxembourg
• Period covered: 15/05/2016 to 30/04/2018
• Supervisor: Denise E Fletcher
• Collaborators: Christina Constantidinis (Post-Doc), Rocky Adiguna (PhD)
• Partners: PwC, Matthias Brauer (Manheim University, Germany)
• Summary: UNDERSTANDING THE SUSTAINABILITY AND GROWTH OF FAMILY FIRMS IN THE GREATER REGION
  A key challenge faced by family firms is the ability to sustain family control and independence at the same time as securing business competitiveness.  Although many family firms achieve this balance quite effectively, others lose their competitive edge in the face of frequent and disruptive environmental changes.  In the Grand Region, there is a multiplicity of family firms (small and large) and yet little is known about the strategic and managerial practices that contribute to their competitiveness and longevity.  The aims of this project are to: (i) identify the distinctive practices of family firms that enables them to survive from one generation to another and to (ii) evaluate the contribution of family firms to society and the economy.
  This project is undertaken in collaboration with PwC and is coordinated by Professor Fletcher, Christina Constantinidis and Rocky Adiguna of Uni.Lu, and Professor Brauer, Manheim University, Germany.