Walsh, Patrick P.
Walsh, Patrick P.
Walsh, Patrick P.
Now showing 1 - 10 of 46
- PublicationThe effect of real exchange rate movements on the life expectancy of manufacturing plants in Ireland, 1973-94We estimate the factors that affect the life expectancy of plants operating in the manufacturing sector of Ireland over the period 1980-1994. Our results suggest that real exchange rate appreciations have caused a great number of infant mortalities in domestic plants both in the traditional and high tech sectors over this period. Real effective exchange rate movements are estimated to have no effect on the plant life expectancy of foreign owned firms. Domestic plants operating in the high-tech sector are estimated to have a higher life expectancy than those operating in the traditional sector. In addition, the real exchange rate effect on the survival rates of domestic plants in the R&D intensive sectors even though significant is weaker compared with the traditional sector.
- PublicationThe importance of structural change in industry for growthThe paper documents ongoing job creation and job destruction within 3- digit Irish manufacturing sectors over the period 1973 to 1994. Within sectors of low-technology manufacturing, this was due to the gradual development of historical export product lines and gradual decline in historical domestic oriented production. In contrast, the structural change in jobs within sectors of hightechnology manufacturing resulted from the gradual accumulation of foreign capital with new export product lines and a phasing out of inefficient import substituting industry. Ireland’s industrial performance is shown to be an outcome of such path dependent structural change.
- PublicationOptimal corporation tax : an I.O. approachOur IO approach links optimal effective corporation tax rates to the nature of sunk costs within industries. Theory predicts that optimal effective corporation tax rates will be negatively related to industry specific sunk cost, and hence industry concentration. Governments should tax industries with monopolistic power softly. Evidence suggests that this Schumpeterian (1942) principle of corporate taxation was used widely across industries in France, Italy and the UK in the 1990s.
- PublicationThe firm size distribution in a small open economy : theory and evidenceWe construct a theoretical model of the dynamic processes (firm entry, growth, decline, and exit) that underpin the determination of a limiting firm size distribution (FSD). In particular, we model such dynamic processes using key structural parameters; sunk cost, exogenous entry constraints, and opportunity values of finite duration. The limiting FSD we derive, in steady state, turns out to be a combination of a Logarithmic and Zipf distribution. We estimate these structural parameters using long periods of Irish company data for defined cohorts of firms, in terms of trade orientation, within narrowly defined industries. Within non-exporting and exporting samples of companies our model fits the actual FSD well with a good return to the Zipf distribution in the upper tail, that is less dependent on the estimated structural 2 parameters, and a good return at the lower tail, where the Logarithmic effects are endogenously driven by firm heterogeneity in estimated structural parameters.
- PublicationJobless growth through creative destruction : Ireland's industrial development path 1972-2003We document the nature of structural changes in employment to understand “jobless” growth in Irish Manufacturing in the aftermath of EEC/EU membership, 1972-2003. By 1972, forty years of protectionism and fifteen years of export promotion induced the coexistence of large exporting plants with import competing plants within 4-digit industries. During trade liberalisation we document persistent horizontal waves of creative destruction, a decline in traditional import competing plants and an expansion in exporting plants, within each sector. This coexisted with rapid vertical waves of creative destruction in small non-exporting plants which supported exporting growth through forward vertical linkages within each sector.
- PublicationMerger control in differentiated product industriesGiven that brands (products) are location specific in terms of coverage of retail stores, we allow consumers to have preferences over location and products to carry distribution costs, alongside preferences and costs over other observable and unobservable product characteristics. We embed these considerations into Berry, Levinsohn and Pakes (1995) to jointly estimate demand and cost parameters for brands (products) in Retail Carbonated Soft Drinks. Allowing for location has a very significant impact on estimated primitives and the predictive power of the structural model. As a counterfactual exercise we show the effects on welfare of an equilibrium that results from a change in the distribution of consumer taste for location.
- PublicationRegional unemployment in Poland : a legacy of central planning(LICOS Centre for Transition Economics, 2000)We model job reallocation and unemployment as outcomes jointly determined by the structure of inherited social capital within a two-sector Optimal Speed of Transition model. Treating regions of Poland as independent labour markets, the socio-economic inheritance of regions is found to be a legacy of planning that determines regional job reallocation rates. In turn, higher rates of (instrumented) regional job reallocation is shown to boost regional unemployment turnover, reduce the duration of frictional and increase the incidence of structural unemployment. At the regional level, the benefit system facilitates the job reallocation process and accumulates out-of–date human capital.
- PublicationCoverage of retail stores and discrete choice models of demand : estimating price elasticities and welfare effectsConsumers' choice set of products within stores can be limited. Ackerberg and Rysman (2005) address this problem by modeling unobserved consumer preferences over products and retail stores, leading to augmented demand specifications. Having Carbonated Soft Drink product level data, where we observe products' store coverage, we are able to estimate their logit, nested logit and random coefficient logit specifications of demand in a structural model of equilibrium. Allowing for store coverage turns out to have a very significant impact on the estimated structural parameters and on the predictive power of the model. Taking these estimated structural parameters we perform a counterfactual whereby stores carry all products in the market. We find systematic increases in price elasticities and welfare in our new equilibrium. Competition in markets is more curtailed than normally assumed in structural models of industries.
- PublicationPrice dispersion and strategic outcomes : an analysis of the Irish independent grocery sectorThis paper empirically analyses price dispersion between brand within product catgories in the Independent grocery sector. The methodology adopted allows us to discriminate between the impact which various structural demand and supply side features have on price dispersion in both traditional and game-theoretic frameworks. Specifically we estimate how differences in the product cycle, sales structure, distribution structure, and downstream retailer power impact patterns of price dispersion while controlling for idiosyncratic product effects. Our results suggest that competitive pricing of brands in product categories, and hence price dispersion, will rise with a slump in the product cycle, fragmentation in the sales structure, greater distribution coverage in outlets, and factors which restrict downstream retailer power.
- PublicationA general framework for analysing endogenous trade divergences(Suntory and Toyota International Centres for Economics and Related Disciplines, 1991-11)This paper gives a general framework for analyzing a trade divergence that runs across both the New International trade theory and the traditional analysis of export policy. The source of the trade divergence, the motive for intervention and the analytical framework is shown to be the same in all models. The sign of the trade divergence and hence the policy recommendation is determined by the market structure chosen to endogenise the divergence. The magnitude of the subsidy in all models is determined by the maximum potential profitability of the home industry. It is argued that interpretations based on "profit shifting" or on a "terms of trade improvement" as a motive for trade intervention are misleading.