Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach
Matthias Brachert, Alexander Kubis, Mirko Titze
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.
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How to Create a New Holiday Destination? An Evaluation of Local Public Investment for Supporting Tourism Industry
Albrecht Kauffmann, Martin T. W. Rosenfeld
Quantitative Methods in Tourism Economics,
2013
Abstract
Since the 1990s tourism has been one major area in Saxony where new local public infrastructure has been created. The question is whether this newly-built tourism infrastructure has been able to change the path of economic development in those municipalities where the investment has occurred. Is it possible to activate the tourism industry with the help of public investment at locations that are completely new to the tourism industry? The econometric estimations and a survey of businesses in the field of tourism make it clear that the new tourist infrastructure really did have a positive effect on local employment – but not everywhere and not in every case. Tourist infrastructure will only have a major positive impact on economic development if a municipality already has a “track record” of being a tourist destination and is well-equipped with the relevant complementary factors for tourist activities and the “primary features” of tourist destinations – History matters!
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The Investment Strategies of Sovereign Wealth Funds
Shai B. Bernstein, Josh Lerner, Antoinette Schoar
Journal of Economic Perspectives,
No. 2,
2013
Abstract
Sovereign wealth funds have emerged as major investors in corporate and real resources worldwide. After an overview of their magnitude, we consider the institutional arrangements under which many of the sovereign wealth funds operate. We focus on a specific set of agency problems that is of first-order importance for these funds: that is, the direct involvement of political leaders in the management process. We show that sovereign wealth funds with greater involvement of political leaders in fund management are associated with investment strategies that seem to favor short-term economic policy goals in their respective countries at the expense of longer-term maximization of returns. Sovereign wealth funds face several other issues, like how best to cope with demands for transparency, which can allow others to copy their investment strategies, and how to address the problems that arise with sheer size, like the difficulties of scaling up investment strategies that only work with a smaller value of assets under investment. In the conclusion, we discuss how various approaches cultivated by effective institutional investors worldwide -- from investing in the best people to pioneering new asset classes to compartmentalizing investment activities -- may provide clues as to how sovereign wealth funds might address these issues.
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Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries
K. Gonchar, Philipp Marek
IWH Discussion Papers,
No. 3,
2013
Abstract
This paper conducts an empirical study of the factors that affect the spatial distribution of foreign direct investment (FDI) across regions in Russia; in particular, this paper is concerned with those regions that are endowed with natural resources and market-related benefits. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and linked regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that one theory alone is not able to explain the geographical pattern of foreign investments in Russia. A combination of determinants is at work; market-related factors and the availability of natural resources are important factors in attracting FDI. The relative importance of natural resources seems to grow over time, despite shocks associated with events such as the Yukos trial. Second, existing agglomeration economies encourage foreign investors by means of forces generated simultaneously by sector-specific and inter-sectoral externalities. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions. The results are robust when Moscow is excluded and for subsamples including only Greenfield investments or both Greenfield investments and mergers and acquisitions (M&A).
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Gauging the Effects of Fiscal Stimulus Packages in the Euro Area
Mathias Trabandt, Roland Straub, Günter Coenen
Journal of Economic Dynamics and Control,
No. 2,
2013
Abstract
We seek to quantify the impact on euro area GDP of the European Economic Recovery Plan (EERP) enacted in response to the financial crisis of 2008–2009. To do so, we estimate an extended version of the ECB's New Area-Wide Model with a richly specified fiscal sector. The estimation results point to the existence of important complementarities between private and government consumption and, to a lesser extent, between private and public capital. We first examine the implied present-value multipliers for seven distinct fiscal instruments and show that the estimated complementarities result in fiscal multipliers larger than one for government consumption and investment. We highlight the importance of monetary accommodation for these findings. We then show that the EERP, if implemented as initially enacted, had a sizeable, although short-lived impact on euro area GDP. Since the EERP comprised both revenue and expenditure-based fiscal stimulus measures, the total multiplier is below unity.
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Local Economic Structure and Urban Growth in Germany
Michael Schwartz, Christoph Hornych, Martin T. W. Rosenfeld, Annette Illy
Journal of Urban Economics,
2010
Abstract
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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe
Marina Grusevaja, Toralf Pusch
Journal of Common Market Studies,
2012
Abstract
Structural Funds are the main instrument of the EU Cohesion Policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results reference is made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.
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Vierteljährliche Konjunkturberichterstattung für das Land Sachsen-Anhalt – Die gesamtwirtschaftliche Lage im 3. Quartal 2012 –
Brigitte Loose, Hans-Ulrich Brautzsch, Franziska Exß
Einzelveröffentlichungen,
No. 3,
2012
Abstract
In Sachsen-Anhalt hat das Bruttoinlandsprodukt im dritten Quartal nochmals nachgegeben. Im saison- und kalenderbereinigten Verlauf hat sich die Abwärtsbewegung zwar zuletzt etwas abgeflacht, bleibt aber weiterhin deutlich schwächer als in Deutschland insgesamt. Gegenüber Jahresfrist war die Produktionsdynamik aufgrund eines Basiseffektes zuletzt sogar deutlich rückläufig. Rückgänge im Verlauf mussten das Verarbeitende Gewerbe und auch der Dienstleistungsbereich hinnehmen, während das Baugewerbe nach den Verlusten im ersten Halbjahr wieder etwas Terrain zurückgewinnen konnte. Insgesamt bleibt Sachsen-Anhalts Wirtschaft damit erneut hinter der Entwicklung in Deutschland zurück. Die Hauptgründe sind weiterhin struktureller Natur.
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Vierteljährliche Konjunkturberichterstattung für das Land Sachsen-Anhalt – Die gesamtwirtschaftliche Lage im 2. Quartal 2012 –
Brigitte Loose, Hans-Ulrich Brautzsch, Franziska Exß
Einzelveröffentlichungen,
No. 2,
2012
Abstract
Das Bruttoinlandsprodukt in Sachsen-Anhalt hat im ersten und zweiten Quartal dieses Jahres deutlich nachgegeben. Erhebliche Rückgänge im Verlauf haben die Industrie und auch das Baugewerbe hinnehmen müssen, während die Verluste im Dienstleistungsbereich eher gering gewesen sein dürften. Sachsen-Anhalt bleibt damit im ersten Halbjahr 2012 deutlich hinter der Entwicklung in Deutschland zurück. Ein wesentlicher Teil der Eintrübung beruht auf der Ausrichtung der Produktion in Sachsen-Anhalt auf Standardprodukte und auf Regionen in Westeuropa sowie dem demographischen Faktor. So profitiert Sachsen-Anhalt aufgrund seiner Produktstruktur nur wenig von den Wachstumstreibern Deutschlands, die zuletzt vor allem aus dem Ausland und hier besonders von Ländern außerhalb Westeuropas sowie von der gestiegenen Nachfrage der privaten Haushalte nach höherwertigen Konsumgütern kamen.
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Bank Bailouts and Moral Hazard: Evidence from Germany
Lammertjan Dam, Michael Koetter
Review of Financial Studies,
No. 8,
2012
Abstract
We use a structural econometric model to provide empirical evidence that safety nets in the banking industry lead to additional risk taking. To identify the moral hazard effect of bailout expectations on bank risk, we exploit the fact that regional political factors explain bank bailouts but not bank risk. The sample includes all observed capital preservation measures and distressed exits in the German banking industry during 1995–2006. A change of bailout expectations by two standard deviations increases the probability of official distress from 6.6% to 9.4%, which is economically significant.
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