Bank Credit Standards, Demand, Pro-cyclicality and the Business Cycle: A Comment
Á. Maddaloni, J. L. Peydró Alcalde, J. Suárez, Reint E. Gropp
Moneda y crédito,
No. 230,
2010
Abstract
We analyze the determinants fo standards and demand for loans to firms and house-holds over the last business cycle using the comprehensive and confidential Bank Lending Survery from the Euro area. There is significant variation of standards and demand over the cycle. Standards for business loans vary more during the business cycle than the lending standards for households, whereas credit demand from households varies more than demand from firms. Lending standards vary mainly due to charges in perception of borrower risk, bank balance sheet positions and competitive pressures. In particular, we find that higher GDP growth softens lending standards for all loans, i. e. lending standards are pro-cyclical. However, we also find pro-cyclicality in credit demand.
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Market Concentration and Innovation in Transnational Corporations: Evidence from Foreign Affiliates in Central and Eastern Europe
Liviu Voinea, Johannes Stephan
Research on Knowledge, Innovation and Internationalization (Progress in International Business Research, Volume 4),
2009
Abstract
Purpose – The main research question of this contribution is whether local market concentration influences R&D and innovation activities of foreign affiliates of transnational companies.
Methodology/approach – We focus on transition economies and use discriminant function analysis to investigate differences in the innovation activity of foreign affiliates operating in concentrated markets, compared to firms operating in nonconcentrated markets. The database consists of the results of a questionnaire administered to a representative sample of foreign affiliates in a selection of five transition economies.
Findings – We find that foreign affiliates in more concentrated markets, when compared to foreign affiliates in less concentrated markets, export more to their own foreign investor's network, do more basic and applied research, use more of the existing technology already incorporated in the products of their own foreign investor's network, do less process innovation, and acquire less knowledge from abroad.
Research limitations/implications – The results may be specific to transition economies only.
Practical implications – The main implications of these results are that host country market concentration stimulates intranetwork knowledge diffusion (with a risk of transfer pricing), while more intense competition stimulates knowledge creation (at least as far as process innovation is concerned) and knowledge absorption from outside the affiliates' own network. Policy makers should focus their support policies on companies in more competitive sectors, as they are more likely to transfer new technologies.
Originality/value – It contributes to the literature on the relationship between market concentration and innovation, based on a unique survey database of foreign affiliates of transnational corporations operating in Eastern Europe.
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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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What Happened to the East German Housing Market? – A Historical Perspective on the Role of Public Funding –
Claus Michelsen, Dominik Weiß
IWH Discussion Papers,
No. 20,
2009
Abstract
The paper analyses the development of the East German housing market after the reunification of the former German Democratic Republic and the Federal Republic of Germany in 1990. We analyse the dynamics of the East German housing market within the framework of the well-known stock-flow model, proposed by DiPasquale and Wheaton. We show that the today observable disequilibrium to a large extend is caused by post-unification housing policy and its strong fiscal incentives to invest into the housing stock. Moreover, in line with the stylized empirical facts, we show that ‘hidden reserves’ of the housing market were reactivated since the economy of East Germany became market organized. Since initial undersupply was overcome faster than politicians expected, the implemented fiscal stimuli were too strong. In contrast to the widespread opinion that outward migration caused the observable vacancies, this paper shows that not weakness of demand but supply side policies caused the observable disequilibrium.
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Urban Growth in Germany – The Impact of Localization and Urbanization Economies
Christoph Hornych, Michael Schwartz, Annette Illy, Martin T. W. Rosenfeld
IWH Discussion Papers,
No. 19,
2009
Abstract
This study examines the impact of localization and urbanization economies as well as the impact of city size on urban growth in German cities from 2003 to 2007. Although, from a theoretical perspective, agglomeration economies are supposed to have positive impacts on regional growth, prior empirical studies do not show consistent results. Especially little is known about agglomeration economies in Germany, where interregional support policy and the characteristics of the federal system are further determinants of urban growth. The results of the econometric analysis show a U-shaped relationship between specialization and urban growth, which particularly holds for manufacturing industries. We do not find evidence for the impact of Jacobs-externalities; however, city size shows a positive (but decreasing) effect on urban growth.
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Book Review on: Mahmound A.T. Elkhafif, Exchange Rate Policy and Currency Substitution: The Case of Africa’s Emerging Economies, 2002, Economic Research Papers No. 71, Abidjan: African Development Bank
Tobias Knedlik
African Development Perspectives Yearbook: Private and Public Sectors: Towards a Balance,
2004
Abstract
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A Simple Macro Model of Original Sin based on Optimal Price Setting under Incomplete Information
Axel Lindner
International Economics and Economic Policy,
2009
Abstract
This paper analyses the consequences of “original sin“ (the fact that the currency of an emerging market economy usually cannot be used to borrow abroad) for macroeconomic stability. The approach is based on third-generation models of currency crises, but differs from alternative versions by explicitly modeling the price setting behavior of firms if prices are sticky and there is incomplete information about the future exchange rate. It is shown that a small depreciation is beneficial, but a large one is detrimental.
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Finanzielle Instabilität und Krise in den Post-Transformations-Ländern
Hubert Gabrisch
Wirtschaftspolitische Blätter,
No. 3,
2009
Abstract
Die Ansteckung durch die globale Finanzkrise war nur ein Auslöser für die schwere Krise in den europäischen Post-Transformations-Ländern. Ursache war die seit 2001 zunehmende finanzielle Instabilität der Länder in Zusammenhang mit der Übernahme ihres Banken- und Finanzsektors durch internationale Finanzinstitutionen. Allgemeine euphorische Renditeerwartungen bildeten den Auftakt für Vermögenspreisblasen und die steigende Verschuldung des privaten Sektors, die durch ausländische Kapitalzuflüsse genährt wurde. Die Studie argumentiert daher, dass simple Konzepte einer Beschränkung inländischer Nachfrage keinen Ausweg aus der Krise weisen. Vielmehr wird eine zweite Transformation notwendig, die ein Wachstumsmodell etabliert, das den Einfluss spekulativer Kapitalzuflüsse reduziert und weiterhin hohe Wachstumsraten ermöglicht.
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Growth, Employment, Poverty Alleviation and Institutional Development – Lessons from Country Cases – An Introduction
Tobias Knedlik, Karl Wohlmuth
African Development Perspectives Yearbook, No. 14,
2009
Abstract
Economic growth is a central concept in judging the progress of economic development. Since the early years of economic sciences, economists aim to explain the differences in the production of goods and services among economies. Economic policy focuses on economic growth as the basis for the well-being of nations. The simple idea is that the extension of the productive capacity and finally the increase of consumption possibilities in an economy is the basis of all policies aiming to increase a nation’s welfare. It is therefore not surprising that aims of development policy are often linked to specific economic growth targets. So the United Nation’s Millennium Development Goals are assumed only to be achieved if a certain level of economic growth can be reached.
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Konjunktur aktuell: Prognose-Update des IWH: Deutsche Konjunktur am Ende der Talfahrt – mit Ausnahme des Arbeitsmarktes
Wirtschaft im Wandel,
No. 9,
2009
Abstract
Die scharfe Rezession der Weltwirtschaft scheint im Sommer zu ihrem Ende gekommen zu sein. Die Industrieproduktion nimmt in den meisten entwickelten Volkswirtschaften in der Tendenz wieder zu, ebenso der Welthandel. Schon im zweiten Quartal war die gesamtwirtschaftliche Produktion in den USA und in Großbritannien nur noch stark verlangsamt gesunken, im Euroraum stagnierte sie. In Japan haben Nachfrage und Produktion sogar deutlich zugelegt; das Land profitiert wie der gesamte ostasiatische Raum von der raschen Wiederbelebung der chinesischen Konjunktur. Dort haben die staatlich verordnete Kreditexpansion sowie die Infrastrukturprogramme schon seit dem Frühjahr die gesamtwirtschaftliche Aktivität stimulieren können.
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