Transition to Clean Technology
Daron Acemoglu, Ufuk Akcigit, Douglas Hanley, William R. Kerr
Journal of Political Economy,
No. 1,
2016
Abstract
We develop an endogenous growth model in which clean and dirty technologies compete in production. Research can be directed to either technology. If dirty technologies are more advanced, the transition to clean technology can be difficult. Carbon taxes and research subsidies may encourage production and innovation in clean technologies, though the transition will typically be slow. We estimate the model using microdata from the US energy sector. We then characterize the optimal policy path that heavily relies on both subsidies and taxes. Finally, we evaluate various alternative policies. Relying only on carbon taxes or delaying intervention has significant welfare costs.
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Burdett–Mortensen Model of on-the-Job Search with Two Sectors
Florian Hoffmann, Shouyong Shi
Review of Economic Dynamics,
Special Issue in Honor of Dale Mortensen
2016
Abstract
The focus of this paper is on the steady state of a two-sector economy with undirected search where employed and unemployed workers can search for jobs, both within a sector and between the sectors. As in the one-sector model, on-the-job search generates wage dispersion among homogeneous workers. The analysis of the two-sector model uncovers a property called constant tension that is responsible for analytical tractability. We characterize the steady state in all cases with constant tension. When time discounting vanishes, constant tension yields the endogenous separation rate in each sector as a linear function of the present value for a worker. The one-sector economy automatically satisfies constant tension, in which case the linear separation rate implies that equilibrium offers of the worker value are uniformly distributed. Constant tension also has strong predictions for worker transitions and value/wage dispersion, both within a sector and between the two sectors. When constant tension does not hold, we compute the steady state numerically and illustrate its properties.
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Financial Constraints on Growth: Comparing the Balkans to Other Transition Economies
Hubert Gabrisch
Eastern European Economics,
No. 4,
2015
Abstract
This article applies an adjusted growth diagnostic approach to identify the currently most binding constraint on financing growth in the West Balkan countries. Since this group of economies faces both structural and systemic transformation problems, the original supply-side approach might not be sufficient to detect the most binding constraint. The results of the analysis indicate that the binding constraint on credit and investment growth in the region is the high and increasing share of nonperforming loans, primarily in the household sector, due to policy failures. This article compares the Balkan countries to a group of advanced transition economies. Single-country and panel regressions indicate that demand-side factors do not play a constraining role on growth in the West Balkan countries, but they do in the advanced transition economies.
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Does Country Context Distance Determine Subsidiary Decision-making Autonomy? Theory and Evidence from European Transition Economies
Gjalt de Jong, Vo. van Dut, Björn Jindra, Philipp Marek
International Business Review,
No. 5,
2015
Abstract
We studied an underrepresented area in the international business (IB) literature: the effect of country context distance on the distribution of decision-making autonomy across headquarters and foreign affiliates. Foreign affiliates directly contribute to the competitive advantages of multinational enterprises, highlighting the importance of such intra-firm collaboration. The division of decision-making autonomy is a core issue in the management of headquarters–subsidiary relationships. The main contribution of our paper is that we confront two valid theoretical frameworks – business network theory and agency theory – that offer contradictory hypotheses with respect to the division of decision-making autonomy. Our study is among the first to examine this dilemma with a unique dataset from five Central and Eastern European transition countries. The empirical results provide convincing support for our approach to the study of subsidiary decision-making autonomy.
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On the Trail of Core–periphery Patterns in Innovation Networks: Measurements and New Empirical Findings from the German Laser Industry
Wilfried Ehrenfeld, Toralf Pusch, Muhamed Kudic
Annals of Regional Science,
No. 1,
2015
Abstract
It has been frequently argued that a firm’s location in the core of an industry’s innovation network improves its ability to access information and absorb technological knowledge. The literature has still widely neglected the role of peripheral network positions for innovation processes. In addition to this, little is known about the determinants affecting a peripheral actors’ ability to reach the core. To shed some light on these issues, we have employed a unique longitudinal dataset encompassing the entire population of German laser source manufacturers (LSMs) and laser-related public research organizations (PROs) over a period of more than two decades. The aim of our paper is threefold. First, we analyze the emergence of core–periphery (CP) patterns in the German laser industry. Then, we explore the paths on which LSMs and PROs move from isolated positions toward the core. Finally, we employ non-parametric event history techniques to analyze the extent to which organizational and geographical determinates affect the propensity and timing of network core entries. Our results indicate the emergence and solidification of CP patterns at the overall network level. We also found that the paths on which organizations traverse through the network are characterized by high levels of heterogeneity and volatility. The transition from peripheral to core positions is impacted by organizational characteristics, while an organization’s geographical location does not play a significant role.
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On the Twin Deficits Hypothesis and the Import Intensity in Transition Countries
Hubert Gabrisch
International Economics and Economic Policy,
No. 2,
2015
Abstract
This article aims to explain the increasing deficits in the trade and current account balances of three post-transition countries–Czech Republic, Hungary, and Poland–by testing two hypotheses: the twin deficit hypothesis and increasing import intensity of export production. The method uses co-integration and related techniques to test for a long-run causal relationship between the fiscal and external deficits of three post-transition countries in Central and Eastern Europe. In addition, an import intensity model is tested by applying OLS and GMM. All the results reject the Twin Deficits Hypothesis. Instead, the results demonstrate that specific transition factors such as net capital flows and, probably, a high import intensity of exports affect the trade balance.
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Does Country Context Distance Determine Subsidiary Decision-making Autonomy? Theory and Evidence from European Transition Economies
Gjalt de Jong, Vo. van Dut, Björn Jindra, Philipp Marek
International Business Review,
2015
Abstract
We studied an underrepresented area in the international business (IB) literature: the effect of country context distance on the distribution of decision-making autonomy across headquarters and foreign affiliates. Foreign affiliates directly contribute to the competitive advantages of multinational enterprises, highlighting the importance of such intra-firm collaboration. The division of decision-making autonomy is a core issue in the management of headquarters–subsidiary relationships. The main contribution of our paper is that we confront two valid theoretical frameworks – business network theory and agency theory – that offer contradictory hypotheses with respect to the division of decision-making autonomy. Our study is among the first to examine this dilemma with a unique dataset from five Central and Eastern European transition countries. The empirical results provide convincing support for our approach to the study of subsidiary decision-making autonomy.
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Von der Transformation zur Europäischen Integration – 25 Jahre Wirtschaftsentwicklung in den Neuen Ländern – ein Tagungsbericht
Gerhard Heimpold, D. Lentfer
Wirtschaft im Wandel,
No. 2,
2015
Abstract
Unter dem Titel „Von der Transformation zur Europäischen Integration – 25 Jahre Wirtschaftsentwicklung in den Neuen Ländern“ hat das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) gemeinsam mit Partnern aus Universitäten in Mitteldeutschland am 18. Februar 2015 Forschungsergebnisse zu 25 Jahren Wirtschaftsentwicklung in den Neuen Ländern vorgestellt. Der Präsident des IWH, Prof. Reint E. Gropp, Ph.D., eröffnete die Tagung und ging auf einen Wandel im Verständnis von Transformation in der IWH-Forschung ein. Die institutionelle Transformation von der Zentralverwaltungs- in die Marktwirtschaft sei abgeschlossen. Angesichts des stagnierenden Aufholprozesses Ostdeutschlands müsse sich die IWH-Forschung nun um Transformation als Wachstumsprozess kümmern und untersuchen, wie Wachstum entsteht, was dabei fördernd oder hemmend wirkt und wie die Finanzmärkte zur effizienten Kapitalallokation beitragen.
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Corporate Governance Structures and Financial Constraints in Multinational Enterprises – An Analysis in Selected European Transition Economies on the Basis of the IWH FDI Micro Database 2013 –
Andrea Gauselmann, Felix Noth
IWH Discussion Papers,
No. 3,
2015
Abstract
In our analysis, we consider the distribution of decision power over financing and investment between MNEs’ headquarters and foreign subsidiaries and its influence on the foreign affiliates’ financial restrictions. Our research results show that headquarters of multinational enterprises have not (yet) moved much decision power to their foreign subsidiaries at all. We use data from the IWH FDI Micro Database which contains information on corporate governance structures and financial restrictions of 609 enterprises with a foreign investor in Hungary, Poland, the Czech Republic, Slovakia, Romania and East Germany. We match data from Bureau van Dijk’s AMADEUS database on financial characteristics. We find that a high concentration of decision power within the MNE’s headquarter implicates high financial restrictions within the subsidiary. Square term results show, however, that the effect of financial constraints within the subsidiary decreases and finally turns insignificant when decision power moves from headquarter to subsidiary. Thus, economic policy should encourage foreign investors in the case of foreign acquisition of local enterprises to leave decision power within the enterprise and in the case of Greenfield investment to provide the newly established subsidiaries with as much power over corporate governance structures as possible.
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