Challenges for Future Regional Policy in East Germany. Does East Germany really show Characteristics of Mezzogiorno?
Mirko Titze
A. Kuklinski; E. Malak-Petlicka; P. Zuber (eds), Souther Italy – Eastern Germany – Eastern Poland. The Triple Mezzogiorno? Ministry of Regional Development,
2010
Abstract
Despite extensive government support the gap between East and West Germany has still not been successfully closed nearly 20 years post German unification. Hence, some economists tend to compare East Germany with Mezzogiorno – underdeveloped Southern Italy. East Germany is still subject to sever structural problems in comparison to West Germany: lower per capita income, lower productivity, higher unemployment rates, fewer firm headquarters and fewer innovation activities. There are East German regions with less than desirable rates of development. Nevertheless, the new federal states have shown some evidence of a convergence process. Some regions have developed very positively – they have improved their competitiveness and employment levels. As such, the comparison of East Germany with Mezzogiorno does not seem applicable today.
According to Neoclassical Growth Theory, regional policy is targeted enhancing investment (hereafter the notion ‘investment policy’ is used). has been the most important instrument in forcing the ‘reconstruction of the East’. Overall, the investment policy is seen as having been successful. It is not, however, the only factor influencing regional development – political policy makers noted in the mid 1990s that research and development (R&D) activities and regional concentrated production networks, amongst other factors, may also play a part. The investment policy instrument has therefore been adjusted. Nevertheless, it cannot be excluded that investment policy may fail in particular cases because it contains potentially conflicting targets. A ‘better road’ for future regional policy may lie in the support of regional production and innovation networks – the so-called industrial clusters. These clusters would need to be exactingly identified however to ensure effective and efficient cluster policies.
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Business Volatility, Job Destruction, and Unemployment
Steven J. Davis, R. Jason Faberman, John Haltiwanger, Ron S. Jarmin, Javier Miranda
American Economic Journal: Macroeconomics,
No. 2,
2010
Abstract
Unemployment inflows fell from 4 percent of employment per month in the early 1980s to 2 percent by the mid 1990s. Using low frequency movements in industry-level data, we estimate that a 1 percentage point drop in the quarterly job destruction rate lowers the monthly unemployment inflow rate by 0.28 points. By our estimates, declines in job destruction intensity account for 28 (55) percent of the fall in unemployment inflows from 1982 (1990) to 2005. Slower job destruction accounts for similar fractions of long-term declines in the rate of unemployment.
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Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer‐Employee Data from Germany
Boris Hirsch, Thorsten Schank, Claus Schnabel
Journal of Labor Economics,
No. 2,
2010
Abstract
This article investigates women’s and men’s labor supply to the firm within a semistructural approach based on a dynamic model of new monopsony. Using methods of survival analysis and a large linked employer‐employee data set for Germany, we find that labor supply elasticities are small (1.9–3.7) and that women’s labor supply to the firm is less elastic than men’s (which is the reverse of gender differences in labor supply usually found at the level of the market). Our results imply that at least one‐third of the gender pay gap might be wage discrimination by profit‐maximizing monopsonistic employers.
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Volatile Multinationals? Evidence from the Labor Demand of German Firms
Claudia M. Buch, A. Lipponer
Labour Economics,
No. 2,
2010
Abstract
Does more FDI make the world a riskier place for workers? We analyze whether an increase in multinational firms' activities is associated with an increase in firm-level employment volatility. We use a firm-level dataset for Germany which allows us to distinguish between purely domestic firms, exporters, domestic multinationals and foreign multinationals. Employment in multinationals could be more volatile than employment in domestic firms if multinationals were facing more volatile demand or if they react more to aggregate developments. We therefore decompose the labor demand of firms into their reaction and their exposure to aggregate developments. We find no above-average wage and output elasticities for multinational firms.
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What Determines the Innovative Success of Subsidized Collaborative R&D Projects? – Project-Level Evidence from Germany –
Michael Schwartz, François Peglow, Michael Fritsch, Jutta Günther
IWH Discussion Papers,
No. 7,
2010
published in: Technovation
Abstract
Systemic innovation theory emphasizes that innovations are the result of an interdependent exchange process between different organizations. This is reflected in the current paradigm in European innovation policy, which aims at the support of collaborative R&D and innovation projects bringing together science and industry. Building on a large data set using project-level evidence on 406 subsidized R&D cooperation projects, the present paper provides detailed insights on the relationship between the innovative success of R&D cooperation projects and project characteristics. Patent applications and publications are used as measures for direct outcomes of R&D projects. We also differentiate between academic-industry projects and pure inter-firm projects. Main results of negative binomial regressions are that large-firm involvement is positively related to pa-tent applications, but not to publications. Conversely, university involvement has positive effects on project outcomes in terms of publications but not in terms of patent applications. In general, projects’ funding is an important predictor of innovative success of R&D cooperation projects. No significant results are found for spatial proximity among cooperation partners and for the engagement of an applied research institute. Results are discussed with respect to the design of R&D cooperation support schemes.
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Change in East German Firm Level Export Determinants
Birgit Schultz
Wirtschaft im Wandel,
No. 3,
2010
Abstract
Exporte gelten seit langem als Wachstumsmotor der deutschen Wirtschaft. Durch sie wird Beschäftigung erhöht bzw. gesichert und Wohlstand geschaffen.
Allerdings realisiert bislang lediglich eine Minderheit der ostdeutschen Betriebe des Verarbeitenden Gewerbes und des Baus Umsätze im Ausland. Der Beitrag untersucht für zwei Zeitpunkte, welche Einflüsse die betrieblichen Exportaktivitäten in Ostdeutschland bestimmen und ob sich diese Einflüsse verändert haben. Dabei zeigt sich, dass Exporterfolge besonders häufig von solchen Betrieben erzielt werden, die in internationale Unternehmensstrukturen eingebunden sind und eine hohe Spezialisierung aufweisen. Begünstigt wird eine hohe Exportquote außerdem durch die Nutzung von Größenvorteilen, die sich aus der umgesetzten Warenmenge ableiten lassen. Auch hat die Höhe der Löhne und Gehälter einen positiven Einfluss auf den Exportumfang. Dies alles steht im Einklang mit den bisherigen Forschungsergebnissen zum internationalen Handel. Während der Einfluss der genannten Größen im Zeitvergleich stabil blieb, wandelte sich ein Teil der übrigen Determinanten. Waren im Jahr 2000 die Branchenzugehörigkeit und die Höhe der Lohnstückkosten noch wichtige Einflussgrößen für die Exportaktivitäten, so haben diese im Jahr 2008 an Bedeutung verloren. An ihre Stelle traten die Ausstattung mit Humankapital und Investitionen.
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May Cities in De-Industrialized Regions Become Hot Spots for Attracting Cultural Businesses? The Case of Media Industry in Halle an der Saale (Germany)
Christoph Hornych, Martin T. W. Rosenfeld
European Planning Studies,
2010
Abstract
Policy-makers from many regions where old industrial structures in the field of manufacturing have collapsed are trying to stimulate entrepreneurial activities of businesses in the cultural industry. The question is whether this strategy could be successful. This article examines the strategy of supporting the sector of media industry (“MI”) by policy-makers in the region of Halle in East Germany, where a strong de-industrialization has taken place after the German reunification. Stimulated by the policy-makers' support measures, there actually was a remarkable development of MI. However, the number of MI firms and their employees did not further increase in recent years, after having reached a certain level. This illustrates the limits of political measures for turning a city's path of industrial development voluntarily.
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Margins of international banking: Is there a productivity pecking order in banking, too?
Claudia M. Buch
Bundesbank Discussion Paper 12/2009,
2009
Abstract
Modern trade theory emphasizes firm-level productivity differentials to explain
the cross-border activities of non-financial firms. This study tests whether a
productivity pecking order also determines international banking activities. Using
a novel dataset that contains all German banks’ international activities, we
estimate the ordered probability of a presence abroad (extensive margin) and the
volume of international assets (intensive margin). Methodologically, we enrich the
conventional Heckman selection model to account for the self-selection of banks
into different modes of foreign activities using an ordered probit. Four main
findings emerge. First, similar to results for non-financial firms, a productivity
pecking order drives bank internationalization. Second, only a few non-financial
firms engage in international trade, but many banks hold international assets, and
only a few large banks engage in foreign direct investment. Third, in addition to
productivity, risk factors matter for international banking. Fourth, gravity-type
variables have an important impact on international banking activities.
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The Gender Pay Gap under Duopsony: Joan Robinson meets Harold Hotelling
Boris Hirsch
Scottish Journal of Political Economy,
No. 5,
2009
Abstract
This paper presents an alternative explanation of the gender pay gap resting on a simple Hotelling-style duopsony model of the labour market. Since there are only two employers, equally productive women and men have to commute and face travel cost to do so. We assume that some women have higher travel cost, e.g., due to more domestic responsibilities. Employers exploit that women on average are less inclined to commute and offer lower wages to all women. Since women's firm-level labour supply is for this reason less wage-elastic, this model is in line with Robinson's explanation of wage discrimination.
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