Subsidized Vocational Training: Stepping Stone or Trap? An Evaluation Study for East Germany
Eva Dettmann, Jutta Günther
IWH Discussion Papers,
No. 21,
2009
Abstract
The aim of this paper is to analyze whether the formally equal qualifications acquired during a subsidized vocational education induce equal employment opportunities compared to regular vocational training. Using replacement matching on the basis of a statistical distance function, we are able to control for selection effects resulting from different personal and profession-related characteristics, and thus, to identify an unbiased effect of the public support. Besides the ‘total effect’ of support, it is of special interest if the effect is stronger for subsidized youths in external training compared to persons in workplace-related training. The analysis is based on unique and very detailed data, the Youth Panel of the Halle Centre for Social Research (zsh).
The results show that young people who successfully completed a subsidized vocational education are disadvantaged regarding their employment opportunities even when controlling for personal and profession-related influences on the employment prospects. Besides a quantitative effect, the analysis shows that the graduates of subsidized training work in slightly worse (underqualified) and worse paid jobs than the adolescents in the reference group. The comparison of both types of subsidized vocational training, however, does not confirm the expected stronger effect for youths in external vocational education compared to workplace-related training.
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Industry Concentration and Regional Innovative Performance – Empirical Evidence for Eastern Germany
Christoph Hornych, Michael Schwartz
Post-Communist Economies,
2009
Abstract
Regarding technological innovativeness, the transformed economy of the former German Democratic Republic (GDR) clearly lags behind the western part of the country. To face this weakness a broad mixture of policy measures was carried out in recent years. Particular attention is drawn to the development of industry concentrations and economic ‘clusters’. However, little is known about the effectiveness of these policy measures regarding how industry concentrations in fact promote innovative performance in Eastern Germany. The present study tries to fill this gap by analysing the relationship between industry concentration in Eastern Germany and regional innovative performance. Our empirical analysis is based upon the number of patent applications of 22 manufacturing industries in 22 Eastern German planning regions. The estimated regression models indicate an inverted-U relationship between the degree of industry concentration and innovative performance. An exceedingly high degree of industry concentration in one region hampers regional innovative output. We discuss policy implications of our findings and give recommendations for future refinement of ‘cluster’-supporting policy schemes in Eastern Germany.
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Shocks at Large Banks and Banking Sector Distress: The Banking Granular Residual
S. Blank, Claudia M. Buch, Katja Neugebauer
Journal of Financial Stability,
No. 4,
2009
Abstract
Size matters in banking. In this paper, we explore whether shocks originating at large banks affect the probability of distress of smaller banks and thus the stability of the banking system. Our analysis proceeds in two steps. In a first step, we follow Gabaix and construct a measure of idiosyncratic shocks at large banks, the so-called Banking Granular Residual. This measure documents the importance of size effects for the German banking system. In a second step, we incorporate this measure of idiosyncratic shocks at large banks into an integrated stress-testing model for the German banking system following De Graeve et al. (2008). We find that positive shocks at large banks reduce the probability of distress of small banks.
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The ADR Shadow Exchange Rate as an Early Warning Indicator for Currency Crises
Stefan Eichler, Alexander Karmann, Dominik Maltritz
Journal of Banking and Finance,
No. 11,
2009
Abstract
We develop an indicator for currency crisis risk using price spreads between American Depositary Receipts (ADRs) and their underlyings. This risk measure represents the mean exchange rate ADR investors expect after a potential currency crisis or realignment. It makes crisis prediction possible on a daily basis as depreciation expectations are reflected in ADR market prices. Using daily data, we analyze the impact of several risk drivers related to standard currency crisis theories and find that ADR investors perceive higher currency crisis risk when export commodity prices fall, trading partners’ currencies depreciate, sovereign yield spreads increase, or interest rate spreads widen.
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Is East Germany Catching Up? A Time Series Perspective
Bernd Aumann, Rolf Scheufele
IWH Discussion Papers,
No. 14,
2009
Abstract
This paper assesses whether the economy of East Germany is catching up with the
West German region in terms of welfare. While the primary measure for convergence and catching up is per capita output, we also look at other macroeconomic indicators such as unemployment rates, wage rates, and production levels in the manufacturingsector. In contrast to existing studies of convergence between regions of reunified Germany, our approach is purely based upon the time series dimension and is thus directly focused on the catching up process in East Germany as a region. Our testing setup includes standard ADF unit root tests as well as unit root tests that endogenously allow for a break in the deterministic component of the process. In our analysis, we find evidence of catching up for East Germany for most of the indicators. However, convergence speed is slow, and thus it can be expected that the catching up process will take further decades until the regional gap is closed.
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Evaluating Communication Strategies for Public Agencies: Transparency, Opacity, and Secrecy
Axel Lindner
B.E. Journal of Macroeconomics,
2009
Abstract
This paper analyses in a simple global games framework welfare effects stemming from different communication strategies of public agencies if strategies of agents are complementary to each other: Communication can either be fully transparent, or the agency opaquely publishes only its overall assessment of the economy, or it keeps information completely secret. It is shown that private agents put more weight on their private information in the transparent case than in the case of opacity. Thus, in many cases, the appropriate measure against overreliance on public information is giving more details to the public instead of denying access to public information.
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The Identification of Technology Regimes in Banking: Implications for the Market Power-Fragility Nexus
Michael Koetter, Tigran Poghosyan
Journal of Banking and Finance,
No. 8,
2009
Abstract
Neglecting the existence of different technologies in banking can contaminate efficiency, market power, and other performance measures. By simultaneously estimating (i) technology regimes conditional on exogenous factors, (ii) efficiency conditional on risk management, and (iii) Lerner indices of German banks, we identify three distinct technology regimes: Public & Retail, Small & Specialized, and Universal & Relationship. System estimation at the regional level reveals that greater bank market power increases bank profitability but also fosters corporate defaults. Corporate defaults, in turn, lead to higher probabilities of bank distress, which supports the market power-fragility hypothesis.
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Regional Growth and Finance in Europe: Is there a Quality Effect of Bank Efficiency?
Iftekhar Hasan, Michael Koetter, Michael Wedow
Journal of Banking and Finance,
No. 8,
2009
Abstract
In this study, we test whether regional growth in 11 European countries depends on financial development and suggest the use of cost- and profit-efficiency estimates as quality measures of financial institutions. Contrary to the usual quantitative proxies of financial development, the quality of financial institutions is measured in this study as the relative ability of banks to intermediate funds. An improvement in bank efficiency spurs five times more regional growth then an identical increase in credit does. More credit provided by efficient banks exerts an independent growth effect in addition to direct quantity and quality channel effects.
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A Multidimensional Evaluation of the Effectiveness of Business Incubators: An application of the PROMETHEE outranking method
Michael Schwartz, Maximilian Göthner
Environment and Planning C: Government and Policy,
2009
Abstract
Considerable public resources are devoted to the establishment and operation of business incubators (BIs), which are seen as catalysts for the promotion of entrepreneurship, innovation activities and regional development. Despite the vast amount of research that focused on the effectiveness of incubator initiatives and how to measure incubator performance, there is still a lack of understanding of how to determine incubators that are more effective than others. Based on data from 410 graduate firms, the present article concentrates on this crucial question and compares the long-term effectiveness of five BIs in Germany by applying the multi-criteria outranking technique PROMETHEE. In particular, we investigate whether PROMETHEE is a well suited methodological approach for the evaluation and comparisons in the specific context of business incubation.
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The Transition to Post-industrial BMI Values among US Children
Marco Sunder, Ariane Breitfelder, John Komlos
American Journal of Human Biology,
2009
Abstract
The trend in the BMI values of US children has not been estimated very convincingly because of the absence of longitudinal data. Our objective is to estimate time series of BMI values by birth cohorts instead of measurement years. We use five regression models to estimate the BMI trends of non-Hispanic US-born black and white children and adolescents ages 2-19 between 1941 and 2004. The increase in BMIZ values during the period considered was 1.3 (95% CI: 1.16; 1.44) among black girls, 0.8 for black boys, 0.7 for white boys, and 0.6 for white girls. This translates into an increase in BMI values of some 5.6, 3.3, 2.4, and 1.5 units, respectively. While the increase in BMI values started among the birth cohorts of the 1940s among black girls, the rate of increase tended to accelerate among all four ethnic/gender groups born in the mid-1950s to early-1960s. Some regional evidence leads to the conjecture that the spread of automobiles and radios affected the BMI values of boys already in the interwar period. We suppose that the changes in lifestyle associated with the labor saving technological developments of the 20th century are associated with the weight gains observed. The increased popularity of television viewing was most prominently associated with the contemporaneous acceleration in BMI gain. Am. J. Hum. Biol., 2009. © 2008 Wiley-Liss, Inc.
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