Progressivity and Flexibility in Developing an Effective Competition Regime: Using Experiences of Poland, Ukraine, and South Africa for developing countries
Franz Kronthaler, Johannes Stephan
IWH Discussion Papers,
No. 6,
2006
Abstract
The paper discusses the role of the concept of special and differential treatment in the framework of regional trade agreements for the development of a competition regime. After a discussion of the main characteristics and possible shortfalls of those concepts, three case countries are assessed in terms of their experience with progressivity, flexibility, and technical and financial assistance: Poland was led to align its competition laws to match the model of the EU. The Ukraine opted voluntarily for the European model, this despite its intense integration mainly with Russia. South Africa, a developing country that emerged from a highly segregated social fabric and an economy dominated by large conglomerates with concentrated ownership. All three countries enacted (or comprehensively reformed) their competition laws in an attempt to face the challenges of economic integration and catch up development on the one hand and particular social problems on the other. Hence, their experience may be pivotal for a variety of different developing countries who are in negotiations to include competition issues in regional trade agreements. The results suggest that the design of such competition issues have to reflect country-particularities to achieve an efficient competition regime.
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Determinants of employment - the macroeconomic view
Christian Dreger, Heinz P. Galler, Ulrich (eds) Walwai
Schriften des IWH,
No. 22,
2005
Abstract
The weak performance of the German labour market over the past years has led to a significant unemployment problem. Currently, on average 4.5 mio. people are without a job contract, and a large part of them are long-term unemployed. A longer period of unemployment reduces their employability and aggravates the problem of social exclusion.
The factors driving the evolution of employment have been recently discussed on the workshop Determinanten der Beschäftigung – die makroökonomische Sicht organized jointly by the IAB, Nuremberg, and the IWH, Halle. The present volume contains the papers and proceedings to the policy oriented workshop held in November 2004, 15-16th. The main focus of the contributions is twofold. First, macroeconomic conditions to stimulate output and employment are considered. Second, the impacts of the increasing tax wedge between labour costs and the take home pay are emphasized. In particular, the role of the contributions to the social security system is investigated.
In his introductory address, Ulrich Walwei (IAB) links the unemployment experience to the modest path of economic growth in Germany. In addition, the low employment intensity of GDP growth and the temporary standstill of the convergence process of the East German economy have contributed to the weak labour market performance. In his analysis, Gebhard Flaig (ifo Institute, München) stresses the importance of relative factor price developments. A higher rate of wage growth leads to a decrease of the employment intensity of production, and correspondingly to an increase of the threshold of employment. Christian Dreger (IWH) discusses the relevance of labour market institutions like employment protection legislation and the structure of the wage bargaining process on the labour market outcome. Compared to the current setting, policies should try to introduce more flexibility in labour markets to improve the employment record. The impact of interest rate shocks on production is examined by the paper of Boris Hofmann (Deutsche Bundesbank, Frankfurt). According to the empirical evidence, monetary policy cannot explain the modest economic performance in Germany. György Barabas and Roland Döhrn (RWI Essen) have simulated the effects of a world trade shock on output and employment. The relationships have been fairly stable over the past years, even in light of the increasing globalization. Income and employment effects of the German tax reform in 2000 are discussed by Peter Haan and Viktor Steiner (DIW Berlin). On the base of a microsimulation model, household gains are determined. Also, a positive relationship between wages and labour supply can be established. Michael Feil und Gerd Zika (IAB) have examined the employment effects of a reduction of the contribution rates to the social security system. To obtain robust results, the analysis is done under alternative financing scenarios and with different macroeconometric models. The impacts of allowances of social security contributions on the incentives to work are discussed by Wolfgang Meister and Wolfgang Ochel (ifo München). According to their study, willingness to work is expected to increase especially at the lower end of the income distribution. The implied loss of contributions could be financed by higher taxes.
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Telecommunications, Trade and Growth: Gravity Modeling and Empirical Analysis for Eastern Europe and Russia
Albrecht Kauffmann
Economic Liberalization and Integration Policy: Options for Eastern Europe and Russia,
2006
Abstract
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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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Current Trends: East German trade: no turnaround in sight
Siegfried Beer
Wirtschaft im Wandel,
No. 14,
2004
Abstract
Das Handwerk in den neuen Ländern hat, mehr noch als das in den alten Ländern, erhebliche wirtschaftliche Probleme. Seit 1996 geht seine Wirtschaftsleistung zurück; auch die Beschäftigung nimmt seitdem ab. 2003 war der Umsatz der Handwerksbetriebe, ohne die Betriebe des handwerksähnlichen Gewerbes, in den ostdeutschen Flächenländern im Schnitt fast ein Fünftel geringer als 1998. Noch stärker nahm – mit 27% – die Beschäftigtenzahl ab. Auch für 2004 deutet sich keine Trendwende an. Nach den Angaben der Statistischen Landesämter verringerte sich der Umsatz im ersten Halbjahr 2004 im Vergleich zum Vierteljahresdurchschnitt 2003 um etwa 10% und die Beschäftigtenzahl war gegenüber dem 30.09.2003 um etwa 8% niedriger. Wenn sich diese Tendenz im zweiten Halbjahr fortsetzt, wovon in etwa auszugehen ist, wird der Umsatz des Handwerks der neuen Länder (ohne Berlin) 2004 etwa ein Viertel und die Beschäftigtenzahl fast ein Drittel geringer sein als noch 1998.
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EU enlargement to the East: Effects on direct investments and trade
Joachim Ragnitz
Wirtschaft im Wandel,
No. 7,
2004
Abstract
Die EU-Osterweiterung, verstanden als ein längerfristiger Prozess verstärkter Integration der Beitrittsländer in die EU, hat zu einer bereits heute intensiven Verflechtung der beteiligten Volkswirtschaften geführt. Dabei hat sich eine Arbeitsteilung herausgebildet, bei der die mittel- und osteuropäischen Länder wegen ihrer Arbeitskostenvorteile von deutschen Unternehmen als Standort für arbeitsintensive Teile der Wertschöpfungskette genutzt werden. Während wenig dafür spricht, dass es künftig zu weiteren massiven Standortverlagerungen deutscher Unternehmen in die Beitrittsländer kommt, ist im Außenhandel eine weitere Intensivierung der Handelsbeziehungen wahrscheinlich.
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Exporting Financial Institutions Management via Foreign Direct Investment Mergers and Acquisitions
Allen N. Berger, Claudia M. Buch, G. DeLong
Journal of International Money and Finance,
No. 3,
2004
Abstract
We test the relevance of the new trade theory and the traditional theory of comparative advantage for explaining the geographic patterns of international M&As of financial institutions between 1985 and 2000. The data provide statistically significant support for both theories. We also find evidence that the U.S. has idiosyncratic comparative advantages at both exporting and importing financial institutions management.
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EU enlargement to the east has positive effects on trade
Bogdan Gorokhovskij
Wirtschaft im Wandel,
No. 4,
2004
Abstract
Der im Mai des laufenden Jahres bevorstehende Beitritt von acht mittel- und osteuropäischen Ländern zur EU beinhaltet eine weitere Verbesserung der institutionellen Rahmenbedingungen für den bilateralen Handel zwischen den alten und den neuen EU-Mitgliedsstaaten. Mit der Vertiefung der Handelsintegration im Zuge der EU-Erweiterung öffnen sich neue Potenziale im Handel zwischen den beiden Regionen. Über die Höhe dieser Potenziale gibt es allerdings in der Literatur sehr unterschiedliche Auffassungen. Das IWH hat mit Hilfe eines Gravitationsmodells des Außenhandels in der EU das Handelspotenzial der EU-Osterweiterung geschätzt und ist zu dem Ergebnis gekommen, dass das langfristig bestehende Handelspotenzial gegenwärtig nur zum Teil ausgenutzt wird, die EU-Ausfuhren mittel- bis langfristig um etwa 50% und die Einfuhren um etwa 80% höher liegen werden als im Jahre 2001 und der bestehende Handelsbilanzüberschuss der EU zurückgehen wird. Dieses Wachstumspotenzial ergibt sich allein aus der weitergehenden Integration und kann zu den Handelseffekten addiert werden, die sich aus der Einkommensentwicklung ergeben. Danach erscheinen jährliche reale Wachstumsraten des Außenhandels von durchschnittlich bis zu 6% in den nächsten zehn Jahren realistisch.
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The Reform of Local Public Services of General Interest in Europe
Peter Haug, Martin T. W. Rosenfeld
Applied Economics Quarterly (Supplement),
2004
Abstract
The benefits of a reduced supply of local public services may more than outweigh the supposed welfare losses. This was suggested by various theoretical and empirical investigations in many fields of economics during the last decades. Nevertheless, local and national politicians, trade unionists, charities, and other lobbyists have succeeded in preventing further liberalisation of “services of general interest” in Europe. This article examines why these preserve agents have been and are still successful. The analysis is based on an institutional economic approach. Several policy measures and institutional changes are suggested to either reduce influence of preserve agents or to compensate them for their losses.
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EU Accession Countries’ Specialisation Patterns in Foreign Trade and Domestic Production - What can we infer for catch-up prospects?
Johannes Stephan
IWH Discussion Papers,
No. 184,
2003
Abstract
This paper supplements prior analysis on ‘patterns and prospects’ (Stephan, 2003) in which prospects for the speed of future productivity growth were assessed by looking at the specialisation patterns in domestic production. This analysis adds the foreign trade sphere to the results generated in the prior analysis. The refined results are broadly in line with the results from the original analysis, indicating the robustness of our methods applied in either analysis. The most prominent results pertain to Slovenia and the Slovak Republic. Those two countries appear to be best suited for swift productivity catch-up from the viewpoint of sectoral specialisation. Poland and Estonia exhibit the lowest potentials. Only for the case of Poland would results suggest bleak prospects.
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