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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Is there a Superior Distance Function for Matching in Small Samples?
Eva Dettmann, Claudia Becker, Christian Schmeißer
Abstract
The study contributes to the development of ’standards’ for the application of matching algorithms in empirical evaluation studies. The focus is on the first step of the matching procedure, the choice of an appropriate distance function. Supplementary o most former studies, the simulation is strongly based on empirical evaluation ituations. This reality orientation induces the focus on small samples. Furthermore, ariables with different scale levels must be considered explicitly in the matching rocess. The choice of the analysed distance functions is determined by the results of former theoretical studies and recommendations in the empirical literature. Thus, in the simulation, two balancing scores (the propensity score and the index score) and the Mahalanobis distance are considered. Additionally, aggregated statistical distance functions not yet used for empirical evaluation are included. The matching outcomes are compared using non-parametrical scale-specific tests for identical distributions of the characteristics in the treatment and the control groups. The simulation results show that, in small samples, aggregated statistical distance functions are the better
choice for summarising similarities in differently scaled variables compared to the
commonly used measures.
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Human Capital and Fertility in Germany after 1990: Evidence from a Multi-Spell Model
Marco Sunder
IWH Discussion Papers,
No. 22,
2009
Abstract
We analyze the timing of birth of the first three children based on German panel
data (GSOEP) within a hazard rate framework. A random effects estimator is
used to accommodate correlation across spells. We consider the role of human
capital – approximated by a Mincer-type regression – and its gender-specific
effects on postponement of parenthood and possible recuperation at higherorder
births. An advantage of the use of panel data in this context consists in
its prospective nature, so that determinants of fertility can be measured when
at risk rather than ex-post, thus helping to reduce the risk of reverse causality.
The analysis finds evidence for strong recuperation effects, i.e., women with
greater human capital endowments follow, on average, a different birth history
trajectory, but with negligible curtailment of completed fertility.
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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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