Evaluation of Subsidy Programmes

The work in this group combines high quality research with policy advice. Its overarching objective is to improve the foundation of causal impact analysis of policy intervention in the European Union. The research in this group directly addresses shortcomings regarding the current practice of policy evaluations, particularly in the fields of subsidy programmes and financial markets interventions. Currently, systematic evaluation in these research areas is underdeveloped in the European Union relative to that in other highly developed economies such as the U.S.[1] or U.K.[2]

By developing blueprints, this research group aims at demonstrating how evidence-based policy evaluation that is in line with international evaluation standards can contribute to better informed policy-making. We highlight that this challenge can only be met by an integrated approach combining three dimensions: state-of-the-art econometric methods of causal impact analysis; the management of big data; and multilateral knowledge transfer between the scientific community, policy-makers/administrative staff and society. By bringing together these dimensions, this project will develop sustainable evaluation practices for researchers and policy-makers and act as a data source for the scientific community.

An example for policy advice in the first competence field (evaluation of subsidy programmes) is the causal impact analysis of the "Joint Task of 'Improving the Regional Economic Structure'" (which is the most important regional policy support scheme in Germany). The objective of the project is to use different evaluation techniques to assess the impact of policy measures. Thereby policy gains a better understanding of regional structural changes and regional economic growth.

In the second key area (evaluation of financial market interventions) the project analyses regulatory reforms and effects. Having in mind that after the recent financial crisis, a re-regulation of the financial system took place, it is of utmost importance to evaluate the effectiveness of the reforms as well as to assess whether there are unintended side-effects. In the context of the project “The Political Economy of the European Banking Union” researchers in the financial markets department study how the directives underlying the European Banking Union are implemented across member states as well as whether the new regulatory framework has implications for banking stability and financial intermediation.

IWH Data Project: IWH Subsidy Database

The data project deals with the completion and preparation of comprehensive and unique data sets including information about granted R&D projects and institutional frameworks. The database includes support schemes on federal, federal state, and EU level.[3]

 


[1]     Examples are Mathematica Policy Research (a pioneering nonpartisan research organisation, for details see https://www.mathematica-mpr.com/about-mathematica) or the Commission on Evidence-Based Policymaking established by the bipartisan Evidence-Based Policymaking Commission Act of 2016 (Public Law 114–140, for details see https://www.cep.gov/about.html).

[2]     Examples are The Behavioural Insights Team (BIT) (for details see http://www.behaviouralinsights.co.uk/about-us/), the Innovation Growth Lab (IGL) (for details see http://www.innovationgrowthlab.org/innovation-growth-lab), and the What Works Centre for Local Economic Growth (for details see http://www.whatworksgrowth.org/about-us/).

[3]    For a description of the database, see https://www.iwh-halle.de/en/research/data-and-analysis/research-data-centre/iwh-subsidy-database/ and Brachert, M.; Giebler, A.; Heimpold, G.; Titze, M.; Urban-Thielicke, D.: IWH-Subventionsdatenbank: Mikrodaten zu Programmen direkter Unternehmenssubventionen in Deutschland. Datendokumentation. IWH Technical Report 2/2018. Halle (Saale) 2018.

Research Cluster
Economic Dynamics and Stability

Your contact

PD Dr Mirko Titze
PD Dr Mirko Titze
- Department Präsidialbereich
Send Message +49 345 7753-861

EXTERNAL FUNDING

09.2019 ‐ 09.2022

Establishing Evidence-based Evaluation Methods for Subsidy Programmes in Germany (EVA-KULT)

The project aims at expanding the Centre for Evidence-based Policy Advice at the Halle Institute for Economic Research (IWH-CEP).

see project's webpage

PD Dr Mirko Titze

01.2018 ‐ 12.2020

Networked growth - Innovative Saxony-Anhalt through digital business models (Competence Center 4.0)

PD Dr Mirko Titze

01.2017 ‐ 12.2018

Political Participation in Eastern Germany

Dr Matthias Brachert

12.2015 ‐ 11.2018

Socio-economic Effects of Research on Innovative Approaches for POC Diagnostics

Part of the EXASENS project. Coordinated by the Leibniz Institute of Photonic Technology (IPHT) in Jena, nine Leibniz institutes are working together on researching point-of-care (POC) technology for the prediction and diagnosis of chronic inflammatory respiratory diseases. See press release.

Dr Matthias Brachert

02.2017 ‐ 02.2018

The Importance of Non-University Research Institutions for the Development of Firms and Regions (Be_For_Reg-Projekt)

PD Dr Mirko Titze

01.2015 ‐ 12.2016

Evaluation of the "Joint Task 'Improving the Regional Economic Structure'" in the Federal State of Saxony-Anhalt

PD Dr Mirko Titze

Refereed Publications

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Identifying Industrial Clusters from a Multidimensional Perspective: Methodical Aspects with an Application to Germany

Matthias Brachert Mirko Titze Alexander Kubis

in: Papers in Regional Science, No. 2, 2011

Abstract

If regional development agencies assume the cluster concept to be an adequate framework to promote regional growth and competitiveness, it is necessary to identify industrial clusters in a comprehensive manner. Previous studies used a diversity of methods to identify the predominant concentrations of economic activity in one industrial sector in a region. This paper is based on a multidimensional approach developed by Titze et al. With the help of the combination of concentration measures and input–output methods they were able to identify horizontal and vertical dimensions of industrial clusters. This paper aims to refine this approach by using a superior measure of spatial concentration and by integrating information about spatial interdependence of industrial cluster structures to contribute to a more adequate framework for industrial cluster identification.

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“Geschäftsmodell Deutschland“ und außenwirtschaftliche Ungleichgewichte in der EU

Renate Ohr Götz Zeddies

in: List Forum für Wirtschafts- und Finanzpolitik, 2010

Abstract

Die vergangenen Jahrzehnte waren weltweit durch eine Zunahme der außenwirtschaftlichen Ungleichgewichte gekennzeichnet. Den Leistungsbilanzüberschussländern, insbesondere Deutschland, wird in diesem Zusammenhang zunehmend vorgeworfen, durch zu moderate Lohnsteigerungen wesentlich zum Aufbau der Ungleichgewichte beigetragen zu haben. Vor diesem Hintergrund werden im vorliegenden Beitrag auf Basis einer Paneldatenanalyse die Determinanten der Leistungsbilanzungleichgewichte in der Europäischen Union ermittelt. Die Ergebnisse zeigen, dass die internationale preisliche Wettbewerbsfähigkeit der Länder nur eine von vielen erklärenden Variablen darstellt. Vielmehr gehen die Ungleichgewichte wesentlich auf unterschiedliche Sparneigungen, sowohl der öffentlichen Hand als auch des privaten Sektors, zurück. Folglich wären die an Deutschland gerichteten Forderungen, zum Abbau der Ungleichgewichte die moderate Lohnpolitik zu beenden, allein nicht zielführend. Stattdessen müssen andere Wege gefunden werden, die Binnennachfrage in den Leistungsbilanzüberschussländern zu stärken und die Ausschöpfung bestehender Sparpotenziale in den Leistungsbilanzdefizitländern zu erhöhen.

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Die Identifikation horizontaler und vertikaler industrieller Clusterstrukturen in Deutschland – Ein neues Verfahren und erste empirische Ergebnisse

Mirko Titze Matthias Brachert Alexander Kubis

in: Raumforschung und Raumordnung, No. 5, /6 2009

Abstract

Folgt man der Überlegung, dass das Clusterkonzept für die regionale Wirtschaftspolitik Ansatzpunkte bildet, um Wirtschaftswachstum sowie Wettbewerbsfähigkeit von Regionen zu fördern, so setzt dies voraus, industrielle Cluster umfassend zu identifizieren. Bisherige Untersuchungen bedienen sich dazu einer methodischen Vielfalt, ausgehend von spezifischen regionalen Fallstudien über Input-Output-Methoden hin zu verschiedenen Konzentrationsmaßen. Der vorliegende Beitrag verwendet ein für die empirische Clusterforschung neues Instrument – die Qualitative Input-Output-Analyse. Ihr wohnt nach Ansicht der Autoren die Möglichkeit inne, in Verbindung mit Konzentrationsmaßen einen Beitrag zur flächendeckenden Identifikation industrieller Cluster zu liefern. Insbesondere erlaubt die vorgestellte Methodik die Zusammenführung des Tatbestandes einer kritischen Masse von Unternehmen mit dem Merkmal der Interaktion dieser über Input-Output-Beziehungen auch auf größeren regionalen Untersuchungsebenen. Wendet man die Methodik auf die deutschen Arbeitsmarktregionen an, so wird ersichtlich, dass 103 von 270 Arbeitsmarktregionen über Ansätze horizontaler Cluster verfügen, weitere 28 Regionen beherbergen vertikale industrielle Cluster. 139 Arbeitsmarktregionen weisen gemäß dem gewählten Untersuchungsdesign weder horizontale noch vertikale Cluster auf.

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Investitionszuschüsse nur bei Schaffung von Arbeitsplätzen? Schlussfolgerungen aus der Förderung eines Investitionsprojektes über die Gemeinschaftsaufgabe im Land Brandenburg

Mirko Titze

in: Zeitschrift für Wirtschaftspolitik, 2009

Abstract

Zu den wichtigsten Instrumenten der Regionalpolitik gehört der Investitionszuschuss im Rahmen der Gemeinschaftsaufgabe “Verbesserung der regionalen Wirtschaftsstruktur“. Dieses Instrument kommt in strukturschwachen Regionen zum Einsatz, deren vorrangiges Ziel der Abbau der Arbeitslosigkeit ist. Der institutionelle Rahmen sieht vor, die Zuschüsse an die Schaffung bzw. Sicherung zusätzlicher Dauerarbeitsplätze zu binden. Der vorliegende Beitrag zeigt, dass diese Bindungspflicht unter bestimmten Umständen ineffiziente Produktionsstrukturen provozieren kann. Die Ursachen hierfür liegen in Marktmängeln sowie im Politikversagen. Für eine Landesregierung besteht der Anreiz, eine möglichst große Zahl zusätzlicher Dauerarbeitsplätze zu fordern, da die Landeseinnahmen durch die Beschäftigungs- und Produktionseffekte die Ausgaben der Förderung in relativ kurzer Zeit ausgleichen können. Dazu trägt auch der deutsche Länderfinanzausgleich bei, da die Ausgaben für die Förderung durch Ausgleichszahlungen der anderen Länder kompensiert werden können.

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“Absurdes Ergebnis“ oder wissenschaftlich fundiert? Die Wahl der Konsolidierungsländer

Sabine Freye

in: List Forum für Wirtschafts- und Finanzpolitik, No. 2, 2009

Abstract

Im Sommer 2009 wurde von Bundestag und Bundesrat die Einführung der Schuldenbremse beschlossen. Im Rahmen der damit verbundenen Regelungen wurde zudem entschieden, den fünf am höchsten verschuldeten Bundesländern im Zeitraum von 2011 bis 2019 so genannte Konsolidierungshilfen zum Abbau ihrer strukturellen Verschuldung zu gewähren. Fragen nach der Auswahl der ‚Konsolidierungsländer‘, den verwendeten finanzwissenschaftlichen Indikatoren und deren Realitätsnähe hinsichtlich der tatsächlichen finanziellen Situation der Länderhaushalte blieben bisher allerdings unbeantwortet. Der vorliegende Beitrag setzt an diesem Punkt an und zeigt, dass die Wahl der ‚Konsolidierungsländer‘ ein politischer Kompromiss zwischen Bund und Ländern war, der zum Teil finanzwissenschaftlich gestützt werden kann. Der Vergleich einzelner finanzstatistischer Kennzahlen deutet zusätzlich darauf hin, dass die finanzpolitischen Handlungsspielräume der Länder jedoch nicht allein von der Höhe des Schuldenstandes und den daraus resultierenden Zinsverpflichtungen sondern auch von der Wirtschaftsleistung eines Landes abhängen. Die Konsolidierungshilfen sind somit eine Hilfe zum Abbau der bestehenden strukturellen Schulden, aber keine Garantie dafür, dass die Länder über das Jahr 2019 hinaus die engen Grenzen der bundesdeutschen Schuldenbremse einhalten werden können.

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Working Papers

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Do Manufacturing Firms Benefit from Services FDI? – Evidence from Six New EU Member States

J. Damijan Crt Kostevc Philipp Marek Matija Rojec

in: IWH Discussion Papers, No. 5, 2015

Abstract

This paper focuses on the effect of foreign presence in the services sector on the productivity growth of downstream customers in the manufacturing sector in six EU new member countries in the course of their accession to the European Union. For this purpose, the analysis combines firm-level information, data on economic structures and annual national input-output tables. The findings suggest that services FDI may enhance productivity of manufacturing firms in Central and Eastern European (CEE) countries through vertical forward spillovers, and thereby contribute to their competitiveness. The consideration of firm characteristics shows that the magnitude of spillover effects depends on size, ownership structure, and initial productivity level of downstream firms as well as on the diverging technological intensity across sector on the supply and demand side. The results suggest that services FDI foster productivity of domestic rather than foreign controlled firms in the host economy. For the period between 2003 and 2008, the findings suggest that the increasing share of services provided by foreign affiliates enhanced the productivity growth of domestic firms in manufacturing by 0.16%. Furthermore, the firms’ absorptive capability and the size reduce the spillover effect of services FDI on the productivity of manufacturing firms. A sectoral distinction shows that firms at the end of the value chain experience a larger productivity growth through services FDI, whereas the aggregate positive effect seems to be driven by FDI in energy supply. This does not hold for science-based industries, which are spurred by foreign presence in knowledge-intensive business services.

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Isolation and Innovation – Two Contradictory Concepts? Explorative Findings from the German Laser Industry

Wilfried Ehrenfeld T. Pusch Muhamed Kudic

in: IWH Discussion Papers, No. 1, 2015

Abstract

We apply a network perspective and study the emergence of core-periphery (CP) structures in innovation networks to shed some light on the relationship between isolation and innovation. It has been frequently argued that a firm’s location in a densely interconnected network area improves its ability to access information and absorb technological knowledge. This, in turn, enables a firm to generate new products and services at a higher rate compared to less integrated competitors. However, the importance of peripheral positions for innovation processes is still a widely neglected issue in literature. Isolation may provide unique conditions that induce innovations which otherwise may never have been invented. Such innovations have the potential to lay the ground for a firm’s pathway towards the network core, where the industry’s established technological knowledge is assumed to be located. The aim of our paper is twofold. Firstly, we propose a new CP indicator and apply it to analyze the emergence of CP patterns in the German laser industry. We employ publicly funded Research and Development (R&D) cooperation project data over a period of more than two decades. Secondly, we explore the paths on which firms move from isolated positions towards the core (and vice versa). Our exploratory results open up a number of new research questions at the intersection between geography, economics and network research.

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Does Proximity Matter in the Choice of Partners in Collaborative R&D Projects? – An Empirical Analysis of Granted Projects in Germany

Mirko Titze Philipp Marek Ulrich Blum Clemens Fuhrmeister

in: IWH Discussion Papers, No. 12, 2014

Abstract

This paper contributes to the discussion on the importance of physical distance in the emergence of cross-region collaborative Research and Development (R&D) interactions. The proximity theory, and its extensions, is used as a theoretical framework. A spatial interaction model for count data was implemented for the empirical analysis of German data from the period from 2005 to 2010. The results show that all tested proximity measurements (geographical, cognitive, social and institutional proximity) have a significant positive influence on collaboration intensity. The proximity paradox, however, cannot be confirmed for geographical, social and institutional proximity, but for cognitive proximity.

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Is Subsidizing Companies in Difficulties an Optimal Policy? An Empirical Study on the Effectiveness of State Aid in the European Union

Nicole Nulsch

in: IWH Discussion Papers, No. 9, 2014

Abstract

Even though state aid in order to rescue or restructure ailing companies is regularly granted by European governments, it is often controversially discussed. The aims for rescuing companies are manifold and vary from social, industrial and even political considerations. Well-known examples are Austrian Airlines (Austria) or MG Rover (Great Britain). Yet, this study aims to answer the question whether state aid is used effectively and whether the initial aim why aid has been paid has been reached, i.e. the survival of the company. By using data on rescued companies in the EU and applying a survival analysis, this paper investigates the survival rates of these companies up to 15 years after the aid has been paid. In addition, the results are compared to the survival rates of non-rescued companies which have also been in difficulties. The results suggest that despite the financial support, business failure is often only post-poned; best survival rates have firms with long-term restructuring, enterprises in Eastern Europe, smaller firms and mature companies. However, non-funded companies have an even higher ratio to go bankrupt.

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Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach

Matthias Brachert Alexander Kubis Mirko Titze

in: Papers in Evolutionary Economic Geography, 2013

Abstract

The paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.

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