Objective
This project aims to develop a quantitative macroeconomic model to study the effects of financial development on factor allocation and macroeconomic performance. We pursue to answer how financial development influences the joint determination of investment finance and capital-labour ratio choice for European based companies. The findings in this project will shed light on the importance of financial constraints for the allocational efficiency of factor inputs across production firms and in turn the role of financial development policies in explaining the total factor productivity (TFP) differences across European economies. The proposed project has four main objectives. Our first objective is to construct a general equilibrium macro model and derive theoretical implications to answer the question whether financial development improves the allocational efficiency of capital-labour ratio across different production units and affect industry total factor productivity. By applying dynamic panel data estimation techniques for a large sample of European firms from various countries we will also empirically test whether the variations in the level of financial development affects the sensitivity of firm level capital labour ratio with respect to balance sheet conditions. Our final objective in the project is to conduct a quantitative macro analysis and explore whether the distortions in firm level capital-labour choice have quantitatively significant implications for the industry wide misallocation of factors of production and industry total factor productivity. For this purpose, we will run counterfactual policy experiments to measure the variations in the sensitivity of capital labour choice with respect to balance sheet conditions at the firm level and the TFP gains at the industry level in response to the variations in financial development policies conducted in different European countries.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
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Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
FP7-PEOPLE-2011-CIG
See other projects for this call
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
MC-CIG - Support for training and career development of researcher (CIG)
Coordinator
5037 AB Tilburg
Netherlands
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.