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 StabilityYour contact
- Department Präsidialbereich
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).
01.2018 ‐ 12.2020
Networked growth - Innovative Saxony-Anhalt through digital business models (Competence Center 4.0)
01.2017 ‐ 12.2018
Political Participation in Eastern Germany
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.
02.2017 ‐ 02.2018
The Importance of Non-University Research Institutions for the Development of Firms and Regions (Be_For_Reg-Projekt)
01.2015 ‐ 12.2016
Evaluation of the "Joint Task 'Improving the Regional Economic Structure'" in the Federal State of Saxony-Anhalt
Refereed Publications
Actors and Interactions – Identifying the Role of Industrial Clusters for Regional Production and Knowledge Generation Activities
in: Growth and Change, No. 2, 2014
Abstract
This paper contributes to the empirical literature on systematic methodologies for the identification of industrial clusters. It combines a measure of spatial concentration, qualitative input–output analysis, and a knowledge interaction matrix to identify the production and knowledge generation activities of industrial clusters in the Federal State of Saxony in Germany. It describes the spatial allocation of the industrial clusters, identifies potentials for value chain industry clusters, and relates the production activities to the activities of knowledge generation in Saxony. It finds only a small overlap in the production activities of industrial clusters and general knowledge generation activities in the region, mainly driven by the high-tech industrial cluster in the semiconductor industry. Furthermore, the approach makes clear that a sole focus on production activities for industrial cluster analysis limits the identification of innovative actors.
Non-union Worker Representation, Foreign Owners, and the Performance of Establishments
in: Oxford Economic Papers, No. 1, 2014
Abstract
Using German establishment data, this study provides the first econometric analysis on the interaction of establishment-level codetermination and foreign owners. Works councils are associated with higher productivity in domestic-owned establishments while they are associated with lower productivity in foreign-owned establishments. Our results conform to the notion that foreign ownership can involve strong tensions with the institutional patterns of the host country.
Adjustments in the Use of Temporary Agency before and during the 2008/2009 Economic Crisis
in: Industrielle Beziehungen, No. 1, 2014
Abstract
Der Anstieg in der Leiharbeitsnutzung in Deutschland bis zur Wirtschaftskrise der Jahre 2008 und 2009 war geprägt durch die verstärkte Nutzung in größeren Industriebetrieben und vollzog sich in erster Linie entlang der intensive margin, also durch eine erhöhte Leiharbeitsintensität in den Nutzerbetrieben. Diese Vorgänge können mit transaktionskostentheoretischen Argumenten und gestiegenem internationalen Wettbewerbsdruck erklärt werden, und sie deuten auf eine gestiegene Produktivität in den Nutzerbetrieben hin. Der drastische Rückgang in der Leiharbeitsnutzung während der Krise betraf vor allem Exporteure und größere Industriebetriebe und vollzog sich primär entlang der extensive margin. Die Beschäftigungschancen im Leiharbeitssektor hingen in besonders starkem Maße von der internationalen Nachfrage nach deutschen Industriegütern ab.
Guest Editorial: Which Regions Benefit from Emerging Industries? Guest Editorial
in: European Planning Studies, No. 11, 2013
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The Impact of R&D Collaboration Networks on the Performance of Firms and Regions: A Meta-Analysis of the Evidence
in: International Journal of Networking and Virtual Organisations, No. 4, 2013
Abstract
Wissensintensive Interaktionen sind mit einer Reihe von Vor- und Nachteilen für die beteiligten Akteure verbunden. Deshalb hat sich ein Literaturstrang entwickelt, welcher der Fragestellung nachgeht, wie sich FuE-Kooperationen auf die Leistungsfähigkeit von Firmen und Regionen auswirken. Diese Studien kommen zu unterschiedlichen Ergebnissen. Das Papier versucht die verschiedenen Ergebnisse der Literatur zusammenzufassen. Ein weiteres Ziel ist es, die in der Literatur verwendeten Methoden zur Bearbeitung der Fragestellung kritisch zu diskutieren. Zudem geht das Papier der Frage nach, inwiefern die in der Literatur verwendeten Methoden und Ansätze die Ergebnisse der Studien beeinflussen. Zur Bearbeitung dieser Fragestellungen wird eine Metaanalyse der relevanten Literatur durchgeführt. Dabei wird gezeigt, dass FuE-Kooperationen einen positiven Effekt auf die Leistungsfähigkeit von Firmen und Regionen haben. Zudem gibt es starke Evidenz dafür, dass die verwendeten Methoden und Ansätze die Ergebnisse der Studien beeinflussen.
Working Papers
Do Manufacturing Firms Benefit from Services FDI? – Evidence from Six New EU Member States
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.
Isolation and Innovation – Two Contradictory Concepts? Explorative Findings from the German Laser Industry
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.
Does Proximity Matter in the Choice of Partners in Collaborative R&D Projects? – An Empirical Analysis of Granted Projects in Germany
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.
Is Subsidizing Companies in Difficulties an Optimal Policy? An Empirical Study on the Effectiveness of State Aid in the European Union
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.
Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach
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.
