Does Qualification Drive Innovation? A Microeconometric Analysis Using Linked-employer-employee Data
Bianca Brandenburg, Jutta Günther, Lutz Schneider
IWH Discussion Papers,
No. 10,
2007
Abstract
Degree-level science and engineering skills as well as management and leadership skills are often referred to as a source of innovative activities within companies. Broken down by sectoral innovation patterns, this article examines the role of formal education and actual occupation for product innovation performance in manufacturing firms within a probit model. It uses unique micro data for Germany (LIAB) that contain detailed information about innovative activities and the qualification of employees. We find significant differences of the human capital endowment between sectors differentiated according to the Pavitt classification. Sectors with a high share of highly skilled employees engage in product innovation above average (specialized suppliers and science based industries). According to our hitherto estimation results, within these sectors the share of highly skilled employees does not, however, substantially increase the probability to be an innovative firm.
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Slippery Slopes of Stress: Ordered Failure Events in German Banking
Thomas Kick, Michael Koetter
Journal of Financial Stability,
No. 2,
2007
Abstract
Outright bank failures without prior indication of financial instability are very rare. In fact, banks can be regarded as troubled to varying degrees before outright closure. But failure studies usually neglect the ordinal nature of bank distress. We distinguish four different kinds of increasingly severe events on the basis of the distress database of the Deutsche Bundesbank. Only the worst distress event entails a bank to exit the market. Since the four categories of hazard functions are not proportional, we specify a generalized ordered logit model to estimate respective probabilities of distress simultaneously. We find that the likelihood of ordered distress events changes differently in response to given changes in the financial profiles of banks. Consequently, bank failure studies should account more explicitly for the different shades of distress. This allows an assessment of the relative importance of financial profile components for different degrees of bank distress.
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Systematic Mispricing in European Equity Prices?
Marian Berneburg
IWH Discussion Papers,
No. 6,
2007
Abstract
One empirical argument that has been around for some time and that clearly contra- dicts equity market efficiency is that market prices seem too volatile to be optimal estimates of the present value of future discounted cash flows. Based on this, it is deduced that systematic pricing errors occur in equity markets which hence can not be efficient in the Effcient Market Hypothesis sense. The paper tries to show that this so-called excess volatility is to a large extend the result of the underlying assumptions, which are being employed to estimate the present value of cash flows. Using monthly data for three investment style indices from an integrated European Equity market, all usual assumptions are dropped. This is achieved by employing the Gordon Growth Model and using an estimation process for the dividend growth rate that was suggested by Barsky and De Long. In extension to Barsky and De Long, the discount rate is not assumed at some arbitrary level, but it is estimated from the data. In this manner, the empirical results do not rely on the prerequisites of sta- tionary dividends, constant dividend growth rates as well as non-variable discount rates. It is shown that indeed volatility declines considerably, but is not eliminated. Furthermore, it can be seen that the resulting discount factors for the three in- vestment style indices can not be considered equal, which, on a risk-adjusted basis, indicates performance differences in the investment strategies and hence stands in contradiction to an efficient market. Finally, the estimated discount rates under- went a plausibility check, by comparing their general movement to a market based interest rate. Besides the most recent data, the estimated discount rates match the movements of market interest rates fairly well.
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What Determines the Efficiency of Regional Innovation Systems?
Michael Fritsch, Viktor Slavtchev
Jena Economic Research Papers, Nr. 2007-006,
No. 6,
2007
Abstract
We assess the efficiency of regional innovation systems (RIS) in Germany by means of a knowledge production function. This function relates private sector research and development (R&D) activity in a region to the number of inventions that have been registered by residents of that region. Different measures and estimation approaches lead to rather similar assessments. We find that both spillovers within the private sector as well as from universities and other public research institutions have a positive effect on the efficiency of private sector R&D in the respective region. It is not the mere presence and size of public research institutions, but rather the intensity of interactions between private and public sector R&D that leads to high RIS efficiency. We find that relationship between the diversity of a regions’ industry structure and the efficiency of its innovation system is inversely u-shaped. Regions dominated by large establishments tend to be less efficient than regions with a lower average establishment size.
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The relationship between unemployment and output in post-communist countries
Hubert Gabrisch, Herbert Buscher
Post-Communist Economies,
2006
Abstract
Unemployment is still disappointingly high in most Central and East European countries, and might be a reflection of the ongoing adjustment to institutional shocks resulting from systemic transition, or it may be caused by high labour market rigidity, or aggregate demand that is too weak. In this paper we have investigated the dynamics of unemployment and output in those eight post-communist countries, which entered the EU in 2004. We used a model related to Okun’s Law; i.e. the first differences in unemployment rates were regressed on GDP growth rates. We estimated country and panel regressions with instrument variables (TSLS) and applied a few tests to the data and regression results. We assume transition of labour markets to be accomplished when a robust relationship exists between unemployment rate changes and GDP growth. Moreover, the estimated coefficients contain information about labour market rigidity and unemployment thresholds of output growth. Our results suggest that the transition of labour markets can be regarded as completed since unemployment responds to output changes and not to a changing institutional environment that destroys jobs in the state sector. The regression coefficients have demonstrated that a high trend rate of productivity and a high unemployment intensity of output growth have been occurring since 1998. Therefore, we conclude that labour market rigidities do not play an important role in explaining high unemployment rates. However, GDP growth is dominated by productivity progress and the employment-relevant component of aggregate demand is too low to reduce the high level of unemployment substantially.
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The Effects of Shared ATM Networks on the Efficiency of Turkish Banks
H. Evren Damar
Applied Economics,
No. 6,
2006
Abstract
This study investigates whether forming shared ATM networks has yielded positive benefits for banks in Turkey by increasing their productive efficiency. Using a Data Envelopment Analysis (DEA) approach, pure technical and scale efficiency scores of Turkish banks are estimated and analysed for the period 2000–2003. The results suggest that although it is possible to realize positive effects through ATM sharing arrangements, there are multiple factors that determine which banks realize such benefits. The geographical distribution of shared ATMs between urban and rural markets and the level of competition between banks within urban areas are shown to be important determinants of differences in bank efficiency. This discrepancy between the gains associated with ATM sharing may have important implications concerning the adoption and sharing of new technology by banks in developing countries.
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Vertical Intra-industry Trade between EU and Accession Countries
Hubert Gabrisch
IWH Discussion Papers,
No. 12,
2006
Abstract
The paper analyses vertical intra-industry trade between EU and Accession countries, and concentrates on two country-specific determinants: Differences in personal income distribution and in technology. Both determinants have a strong link to national policies and to cross-border investment flows. In contrast to most other studies, income distribution is not seen as time-invariant variable, but as changing over time. What is new is also that differences in technology are tested in comparison with cost advantages from capital/labour ratios. The study applies panel estimation techniques with GLS. Results show country-pair fixed effects to be of high relevance for explaining vertical intraindustry trade. In addition, bilateral differences in personal income distribution and their changes are positive related to vertical intra-industry trade in this special regional integration framework; hence, distributional effects of policies matter. Also, technology differences turn out to be positively correlated with vertical intra-industry trade. However, the cost variable (here: relative GDP per capita) shows no clear picture, particularly not in combination with the technology variable.
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Network Access Charges, Vertical Integration, and Property Rights Structure
Christian Growitsch, Thomas Wein
Energy Economics,
No. 2,
2005
Abstract
After the deregulation of the German electricity markets in 1998, the German government opted for a regulatory regime called negotiated third party access, which would be subject to ex post control by the federal cartel office. Network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers. As the electricity networks are incontestable natural monopolies, the local and regional network operators are able to set (monopolistic) charges at their own discretion, limited only by their concerns over possible interference by the federal cartel office (Bundeskartellamt). In this paper we analyse if there is evidence for varying charging behaviour depending on a supplier`s economic independence (structure of property rights) or its level of vertical integration. For this purpose we hypothesise that incorporated and vertically integrated suppliers set different charges than independent utility companies. Multivariate estimations show a relation between network access charges and the network operator’s economic independence as well as level of vertical integration. On the low voltage level, for an estimated annual consumption of 1700 kW/h, vertically integrated firms set – as predicted by our hypothesis - significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges compared to independent suppliers. There is insufficient evidence available to confirm these results for other consumptions or voltage levels.
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The influence of Vertical Integration and Property Rights on Network Access Charges in the German Electricity Markets
Christian Growitsch, Thomas Wein
Externe Publikationen,
No. 6,
2004
Abstract
German Electricity markets were deregulated in the late nineties of the last century. In contrast to other European countries, the German government enacted negotiated third party access instead of installing a regulation authority. Network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers, which specify the calculation schemes for access charges. Local and regional suppliers are nevertheless able to set (monopolistic) charges at their own discretion, restricted only by the possibility of interference competition authorities. While some of those suppliers have been acquired by one of the four Transmission System Operators and become vertically integrated, the majority is still independent public utility companies. In this paper we analyse if there is evidence for different charging behaviour depending on the supplier’s economic independence or its level of vertical integration. Controlling for other coefficients as the so called structural features and related cost differences as well as the influence of competition law suits, multivariate estimations show significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges compared to independent suppliers for at least one typical case.
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Evaluation of Further Training Programmes with an Optimal Matching Algorithm
Eva Reinowski, Birgit Schultz, Jürgen Wiemers
IWH Discussion Papers,
No. 188,
2004
Abstract
This study evaluates the effects of further training on the individual unemployment duration of different groups of persons representing individual characteristics and some aspects of the economic environment. The Micro Census Saxony enables us to include additional information about a person's employment history to eliminate the bias resulting from unobservable characteristics and to avoid Ashenfelter's Dip. In order to solve the sample selection problem we employ an optimal full matching assignment, the Hungarian algorithm. The impact of participation in further training is evaluated by comparing the unemployment duration between participants and non-participants using the Kaplan-Meier-estimator. Overall, we find empirical evidence that participation in further training programmes results in even longer unemployment duration.
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