The integration of imperfect financial markets: Implications for business cycle volatility
Claudia M. Buch, C. Pierdzioch
Journal of Policy Modeling,
No. 7,
2005
Abstract
During the last two decades, the degree of openness of national financial systems has increased substantially. At the same time, asymmetries in information and other financial market frictions have remained prevalent. We study the implications of the opening up of national financial systems in the presence of financial market frictions for business cycle volatility. In our empirical analysis, we show that countries with more developed financial systems have lower business cycle volatility. Financial openness has no strong impact on business cycle volatility, in contrast. In our theoretical analysis, we study the implications of the opening up of national financial markets and of financial market frictions for business cycle volatility using a dynamic macroeconomic model of an open economy. We find that the implications of opening up national financial markets for business cycle volatility are largely unaffected by the presence of financial market frictions.
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Financial Openness and Business Cycle Volatility
Claudia M. Buch, Jörg Döpke, C. Pierdzioch
Journal of International Money and Finance,
No. 5,
2005
Abstract
This paper discusses whether the integration of international financial markets affects business cycle volatility. In the framework of a new open economy macro-model, we show that the link between financial openness and business cycle volatility depends on the nature of the underlying shock. Empirical evidence supports this conclusion. Our results also show that the link between business cycle volatility and financial openness has not been stable over time.
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Quality of Service, Efficiency, and Scale in Network Industries: An Analysis of European Electricity Distribution
Christian Growitsch, Tooraj Jamasb, Michael Pollitt
IWH Discussion Papers,
No. 3,
2005
Abstract
Quality of service is of major economic significance in natural monopoly infrastructure industries and is increasingly addressed in regulatory schemes. However, this important aspect is generally not reflected in efficiency analysis of these industries. In this paper we present an efficiency analysis of electricity distribution networks using a sample of about 500 electricity distribution utilities from seven European countries. We apply the stochastic frontier analysis (SFA) method on multi-output translog input distance function models to estimate cost and scale efficiency with and without incorporating quality of service. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly. In contrast to previous research, smaller utilities seem to indicate lower technical efficiency when incorporating quality. We also show that incorporating quality of service does not alter scale economy measures. Our results emphasise that quality of service should be an integrated part of efficiency analysis and incentive regulation regimes, as well as in the economic review of market concentration in regulated natural monopolies.
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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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Cooperation and integration improve company growth - the branch example of modern biotechnology
Walter Komar
Wirtschaft im Wandel,
No. 5,
2005
Abstract
Theoretischen Überlegungen zufolge wird die Entwicklung von Unternehmen durch Kooperation und Netzwerkeinbindung begünstigt. Diese Hypothese wird nachfolgend für das Beschäftigungswachstum von Unternehmen am Beispiel der Branche der modernen Biotechnologie näher untersucht. Tatsächlich zeigt sich, dass die Kooperationsneigung der Firmen in diesem noch jungen Sektor stark ausgeprägt ist. Obwohl sich die Branche seit etwa 2001 in einer Konsolidierungsphase befindet, wuchsen die meisten Anbieter nach wie vor überdurchschnittlich. Gerade diese wachsenden Firmen zeichnen sich durch eine hohe Kooperationsneigung und Vernetzung aus. Schätzungen zur Abhängigkeit des Unternehmenswachstums von kooperations- und nichtkooperationsbezogenen Faktoren zeigen signifikant positive Einflüsse der Kooperation und Vernetzung. Diesbezüglich spielen Wissenschaftseinrichtungen in Standortnähe der Firmen eine bedeutende Rolle....
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Determinants and Effects of Foreign Direct Investment: Evidence from German Firm-Level Data
Claudia M. Buch, J. Kleinert, A. Lipponer
Economic Policy,
No. 41,
2005
Abstract
Foreign direct investment is an essential aspect of ‘globalization’ yet its empirical determinants are not well understood. What we do know is based either on poor data for a wide range of nations, or good data for the US and Swedish cases. In this paper, we provide evidence on the determinants of the activities of German multinational firms by using a newly available firm-level data set from the Deutsche Bundesbank. The specific goal of this paper is to demonstrate the relative role of country-level and firm-level determinants of foreign direct investment. We focus on three main questions: First, what are the main driving forces of German firms’ multinational activities? Second, is there evidence that sector-level and firm-level factors shape internationalization patterns? Third, is there evidence of agglomeration effects in the foreign activities of German firms? We find that the market access motive for internationalization dominates. Firms move abroad mainly to gain better access to large foreign markets. Cost-saving motives, however, are important for some manufacturing sectors. Our results strongly suggest that firm-level heterogeneity has an important influence on internationalization patterns – as stressed by recent models of international trade. We also find positive agglomeration effects for the activities of German firms that stem from the number of other German firms that are active on a given foreign market. In terms of lessons for economic policy, our results show that lowering barriers to the integration of markets and encouraging the formation of human capital can promote the activities of multinational firms. However, our results related to the heterogeneity of firms and agglomeration tendencies show that it might be difficult to fine-tune policies directed at the exploitation of synergies and at the creation of clusters of foreign firms.
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Cross-border Banking and Transmission Mechanisms in Europe: Evidence from German Data
Claudia M. Buch
Applied Financial Economics,
No. 16,
2004
Abstract
International activities of commercial banks play a potential role for the transmission of shocks across countries. This paper presents stylized facts of the integration of European banking markets and analyses the potential of banks to transmit shocks across countries. Although the openness of banking systems has increased, bilateral financial linkages among EU countries are relatively small. The exceptions are claims of German banks on a number of smaller countries. These data are used for an analysis of the determinants of cross-border lending patterns.
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(No) Way out of unemployment? Evaluation of further education programs for various target groups
Eva Reinowski, Birgit Schultz, Jürgen Wiemers
Wirtschaft im Wandel,
No. 14,
2004
Abstract
Die Förderung der beruflichen Weiterbildung ist eines der wichtigsten Instrumente der Arbeitsmarktpolitik in den neuen Bundesländern. Ob damit tatsächlich die Integration in den ersten Arbeitsmarkt beschleunigt wird, ist Gegenstand der aktuellen Diskussion. Welche Personengruppen ihre Beschäftigungschancen durch Weiterbildung besonders verbessern können, wurde bisher allerdings nur selten untersucht. In diesem Beitrag wird eine differenzierte Analyse des Maßnahmeeffekts auf die Arbeitslosigkeitsdauer sächsischer Weiterbildungsteilnehmer vorgestellt, bei der insbesondere auch die Zielgruppen der aktiven Arbeitsmarktpolitik untersucht werden. Damit soll eine Antwort auf die Frage, welche persönlichen, ökonomischen und institutionellen Faktoren den Beschäftigungserfolg der geförderten Maßnahmen beeinflussen, gefunden werden. Für die einzelnen Gruppen lassen sich graduell unterschiedliche Ergebnisse feststellen, was darauf hindeutet, dass die untersuchten Faktoren den Maßnahmeeffekt beeinflussen. Allerdings kann für keine der analysierten Gruppen ein positiver Beschäftigungseffekt beobachtet werden.
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Cross-border bank mergers: What lures the rare animal?
Claudia M. Buch, G. DeLong
Journal of Banking and Finance,
No. 9,
2004
Abstract
Although domestic mergers and acquisitions (M&As) in the financial services industry have increased steadily over the past two decades, international M&As were until recently relatively rare. Moreover, the share of cross-border mergers in the banking industry is low compared with other industries. This paper uses a novel dataset of over 3000 mergers that took place between 1985 and 2001 to analyze the determinants of international bank mergers. We test the extent to which information costs and regulations hold back merger activity. Our results suggest that information costs significantly impede cross-border bank mergers. Regulations also influence cross-border bank merger activity. Hence, policy makers can create environments that encourage cross-border activity, but information cost barriers must be overcome even in (legally) integrated markets.
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Infrastruktur als Wachstumsfaktor: Durch raumwirtschaftliche Integration die Standortentwicklung in Ostdeutschland fördern
Ulrich Blum
Investitionsstaus auslösen,
2004
Abstract
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