The Effects of Shared ATM Networks on the Efficiency of Turkish Banks
H. Evren Damar
Applied Economics,
No. 6,
2006
Abstract
This study investigates whether forming shared ATM networks has yielded positive benefits for banks in Turkey by increasing their productive efficiency. Using a Data Envelopment Analysis (DEA) approach, pure technical and scale efficiency scores of Turkish banks are estimated and analysed for the period 2000–2003. The results suggest that although it is possible to realize positive effects through ATM sharing arrangements, there are multiple factors that determine which banks realize such benefits. The geographical distribution of shared ATMs between urban and rural markets and the level of competition between banks within urban areas are shown to be important determinants of differences in bank efficiency. This discrepancy between the gains associated with ATM sharing may have important implications concerning the adoption and sharing of new technology by banks in developing countries.
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Original Sin - Analysing Its Mechanics and a proposed Remedy in a Simple Macroeconomic Model
Axel Lindner
IWH Discussion Papers,
No. 11,
2006
Abstract
This paper analyses the problem of “original sin“ (the fact that the currency of an emerging market economy usually cannot be used to borrow abroad) in a simple thirdgeneration model of currency crises. The approach differs from alternative frameworks by explicitly modeling the price setting behavior of firms if prices are sticky and the future exchange rate is uncertain. Monetary policy optimally trades off effects on price competitiveness and on debt burdens of firms. It is shown that the proposal by Eichengreen and Hausmann of creating an artificial basket currency as denominator of debt is attractive as a provision against contagion.
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Economies of Scope in European Railways: An Efficiency Analysis
Christian Growitsch, Heike Wetzel
IWH Discussion Papers,
No. 5,
2006
Abstract
In the course of railway reforms in the end of the last century, national European governments, as well the EU Commission, decided to open markets and to separate railway networks from train operations. Vertically integrated railway companies – companies owning a network and providing transport services – argue that such a separation of infrastructure and operations would diminish the advantages of vertical integration and would therefore not be suitable to raise economic welfare. In this paper, we conduct a pan-European analysis to investigate the performance of European railways with a particular focus on economies of vertical integration. We test the hypothesis that integrated railways realise economies of joint production and, thus, produce railway services on a higher level of efficiency. To determine whether joint or separate production is more efficient we apply a Data Envelopment Analysis super-efficiency bootstrapping model which relates the efficiency for integrated production to a virtual reference set consisting of the separated production technology. Our findings are that in a majority of European Railway companies exist economies of scope.
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A Game Theoretic Analysis of the Conditions of Knowledge Transfer by New Employees in Companies
Sidonia vonLedebur
IWH Discussion Papers,
No. 3,
2006
Abstract
The availability of knowledge is an essential factor for an economy in global competition. Companies realise innovations by creating and implementing new knowledge. Sources of innovative ideas are partners in the production network but also new employees coming from another company or academia. Based on a model by HECKATHORN (1996) the conditions of efficient knowledge transfer in a team are analysed. Offering knowledge to a colleague can not be controlled directly by the company due to information asymmetries. Thus the management has to provide incentives which motivate the employees to act in favour of the company by providing their knowledge to the rest of the team and likewise to learn from colleagues. The game theoretic analysis aims at investigating how to arrange these incentives efficiently. Several factors are relevant, especially the individual costs of participating in the transfer. These consist mainly of the existing absorptive capacity and the working atmosphere. The model is a 2x2 game but is at least partly generalised on more players. The relevance of the adequate team size is shown: more developers may increase the total profit of an innovation
(before paying the involved people) but when additional wages are paid to each person a greater team decreases the remaining company profit. A further result is
that depending on the cost structure perfect knowledge transfer is not always best for the profit of the company. These formal results are consistent with empirical studies to the absorptive capacity and the working atmosphere.
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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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The unemployment-growth relationship in transition countries
Hubert Gabrisch, Herbert Buscher
IWH Discussion Papers,
No. 5,
2005
Abstract
Does the disappointingly high unemployment in Central and East European countries reflect non-completed adjustment to institutional shocks from transition to a market economy, or is it the result of high labour market rigidities, or rather a syndrome of too weak aggregate demand and output? In the case of transitional causes, unemployment is expected to decline over time. Otherwise, it would pose a challenge to the European Union, particular in case of accession countries, for it jeopardizes the ambitious integration plans of, and may trigger excessive migration to the Union. In order to find out which hypothesis holds 15 years after transition has started, we analyze the unemploymentgrowth dynamics in the eight new member countries from Central-Eastern Europe. The study is based on country and panel regressions with instrument variables (TSLS). The results suggest to declare the transition of labour markets as completed; unemployment responds to output and not to a changing institutional environment for job creation. The regression coefficients report a high trend rate of productivity and a high unemployment intensity of output growth since 1998. The conclusion is that labour market rigidities do not to play an important role in explaining high unemployment rates. Rather, GDP growth is dominated by productivity progress, while the employment relevant component of aggregate demand is too low to reduce substantially the high level of unemployment.
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Non-market Allocation in Transport: A Reassessment of its Justification and the Challenge of Institutional Transition
Ulrich Blum
50 Years of Transport Research: Experiences Gained and Major Challenges Ahead,
2005
Abstract
Economic theory knows two systems of coordination: through public choice or through the market principle. If the market is chosen, then it may either be regulated, or it may be fully competitive (or be in between these two extremes). This paper first inquires into the reasons for regulation, it analyses the reasons for the important role of government in the transportation sector, especially in the procurement of infrastructure. Historical reasons are seen as important reasons for bureaucratic objections to deregulation. Fundamental economic concepts are forwarded that suggest market failure and justify a regulatory environment. The reasons for regulation cited above, however, may be challenged; we forward theoretical concepts from industrial organization theory and from institutional economics which suggest that competition is even possible on the level of infrastructure. The transition from a strongly regulated to a competitive environment poses problems that have given lieu to numerous failures in privatization and deregulation. Structural inertia plays an important role, and the incentive-compatible management of infrastructure is seen as the key element of any liberal transportation policy. It requires that the setting of rules on the meta level satisfies both local and global efficiency ends. We conclude that, in market economies, competition and regulation should not be substitutes but complements. General rules, an "ethic of competition" have to be set that guarantee a level playing field to agents; it is complimented by institutions that provide arbitration in case of misconduct.
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Negotiated Third Party Access - an Industrial Organisation Perspective
Christian Growitsch, Thomas Wein
European Journal of Law and Economics,
2005
Abstract
In the course of the liberalization of European energy markets, the German government opted – diverging from all other European countries – for Negotiated Third-Party Access. In this article we analyze if, theoretically, this institutional regime can be superior to regulation. We review empirically whether certain aspects of the actual implementation, in particular publication of the network access charges for each network supplier, facilitated or inhibited competition. In the first place we reconsider previous research, showing that NTPA can – under certain conditions – be economically effective. Our empirical analysis shows that the duty of publishing access charges supported market transparency and imposed a regulatory threat, particularly to suppliers with significantly above-average charges. On the other hand observable price adjustments over time serve as an indicator of tacit collusion. Although the expensive suppliers cut their prices, the cheaper ones raised theirs.
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An analysis of household electricity price developments in Germany since liberalization
Christian Growitsch, Felix Müsgens
Externe Publikationen,
2005
Abstract
Despite the liberalization of energy markets in 1998, household electricity prices in 2004 are nearly the same as 1998, indicating a failure of market restructuring. However, such a general consideration is misleading for two main reasons. Firstly, the price development shows significant differences among the stages of the value chain. Secondly, the underlying cost structure might have changed from 1998 to 2004. While such effects can be expected to level out over time, they can distort the comparison of a small period of observation. For these reasons, we analyzed the different price components at a detailed level, finding a considerable price reduction of about 32% in generation and a much lower reduction of 13% in transmission and distribution tariffs. These decreases have been mostly compensated by a significant increase in taxes and subsidies (+56%).
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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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