The European Refugee Crisis and the Natural Rate of Output
Katja Heinisch, Klaus Wohlrabe
Applied Economics Letters,
Nr. 16,
2017
Abstract
The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labour as an important ingredient. This article shows how the recent huge migrants’ inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labour market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modelled adequately compared to results based on the unadjusted European Commission procedure.
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The European Refugee Crisis and the Natural Rate of Output
Katja Heinisch, Klaus Wohlrabe
Abstract
The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labor as an important ingredient. This paper shows how the recent huge migrants inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labor market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modeled adequately compared to results based on the unadjusted European Commission procedure.
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Foreign Direct Investment: The Role of Institutional and Cultural Determinants
Stefan Eichler, N. Lucke
Applied Economics,
Nr. 11,
2016
Abstract
Using panel data for 29 source and 65 host countries in the period 1995–2009, we examine the determinants of bilateral FDI stocks, focusing on institutional and cultural factors. The results reveal that institutional and cultural distance is important and that FDI has a predominantly regional aspect. FDI to developing countries is positively affected by better institutions in the host country, while foreign investors prefer to invest in developed countries that are more corrupt and politically unstable compared to home. The results indicate that foreign investors prefer to invest in countries with less diverse societies than their own.
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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,
Nr. 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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Post-transition Regions as Locations for Foreign Direct Investment of Multinational Enterprises
Andrea Gauselmann
Hochschulschrift, Juristische und Wirtschaftswissenschaftliche Fakultät der Martin-Luther-Universität Halle-Wittenberg,
2014
Abstract
Multinationale Unternehmen investieren im Ausland, um von standortspezifischen Vorteilen zu profitieren und ihre eigene Wettbewerbsfähigkeit zu verbesser. Gleichzeitig tragen sie zu einer Steigerung der Produktivität und einem wirtschaftlichen Aufholprozess am ausländischen Standort bei. Sie fungieren in diesem Sinne als Treiber für technologische und wirtschaftliche Entwicklung. Das Ziel der Dissertation ist es, einen Beitrag zur aktuellen Forschung zu leisten, indem untersucht wird, durch welche Determinanten ausländische Investoren bei der Standortwahl in den europäischen Post-Transformationsregionen beeinflusst werden, welche Motive sie bei ihrer Investition verfolgen, wie sie die Qualität der Standortfaktoren vor Ort beurteilen und unter welchen Bedingungen ein Austausch von Wissen und Technologie zwischen den ausländischen Tochterunternehmen und den Akteuren der einheimischen Wirtschaft stattfindet.
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The Regional Distribution of Foreign Investment in Russia: Are Russians more Appealing to Multinationals as Consumers or as Natural Resource Holders?
K. Gonchar, Philipp Marek
Economics of Transition and Institutional Change,
Nr. 4,
2014
Abstract
This article conducts a plant-level study of the factors affecting foreign direct investment (FDI) inflow to a large opening economy endowed with specific factor advantages. We conclude that the distribution of FDI in Russian regions depends on market access and can be most notably described by the knowledge-capital framework. Factor endowments built by natural resources are more successful in explaining the location decisions of export–platform affiliates. The impact of natural resources depends on how the availability of these resources is measured. The results reject the crowding out effects of resource FDI and prove co-location mode, when service investments are attracted to resource-rich regions. Labour cost advantages better explain the preferences of non-trading service affiliates.
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The Impact of Institutional and Social Characteristics on Foreign Direct Investment: Evidence from Japan
Stefan Eichler, Alexander Karmann, N. Lucke
Annals of Financial Economics,
Nr. 2,
2013
Abstract
We examine the determinants of Japanese foreign direct investment (FDI) focusing on institutional and social factors. Using panel data on 59 countries from 1995 to 2008, we find that host countries with free and open markets and greater cultural distance from Japan attract Japanese FDI. Good institutions, such as a well-developed legal framework and an effective government, are important in promoting Japanese FDI to emerging economies, whereas fewer regulatory restrictions, lower tax burden, and more religious diversity attract Japanese FDI to developed countries. We find that corruption stimulates Japanese FDI to developed countries, which is contrary to most previous research.
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R&D Offshoring and the Productivity Growth of European Regions
Davide Castellani, F. Pieri
CIRCLE Working Papers, No. 20,
Nr. 20,
2013
Abstract
The recent increase in R&D offshoring have raised fears that knowledge and competitiveness in advanced countries may be at risk of 'hollowing out'. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D offshoring is associated with productivity dynamics of European regions. We find that offshoring regions have higher productivity growth, but this positive effect fades down with the number of investment projects carried out abroad. A large and positive correlation emerge between the extent of R&D offshoring and the home region productivity growth, supporting the idea that carrying out R&D abroad strengthen European competitiveness.
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Skill Content of Intra-european Trade Flows
Götz Zeddies
European Journal of Comparative Economics,
Nr. 1,
2013
Abstract
In recent decades, the international division of labor has expanded rapidly in the wake of European integration. In this context, especially Western European high-wage countries should have specialized on (human-)capital intensively manufactured goods and should have increasingly sourced labor-intensively manufactured goods, especially parts and components, from Eastern European low wage countries. Since this should be beneficial for the high-skilled and harmful to the lower-qualified workforce in high-wage countries, the opening up of Eastern Europe is often considered as a vital reason for increasing unemployment of the lower-qualified in Western Europe. This paper addresses this issue by analyzing the skill content of Western European countries’ bilateral trade using input-output techniques in order to evaluate possible effects of international trade on labor demand. Thereby, differences in factor inputs and production technologies have been considered, allowing for vertical product differentiation. In this case, skill content of bilateral exports and imports partially differs substantially, especially in bilateral trade between Western and Eastern European countries. According to the results, East-West trade should be harmful particularly to the medium-skilled in Western European countries.
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Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries
K. Gonchar, Philipp Marek
HSE Working Papers, Series: Economics, WP BRP 26/EC/2013,
2013
Abstract
This paper analyzes the spatial distribution of foreign direct investment (FDI) across regions in Russia. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and links regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that market-related factors and the availability of natural resources are important factors in attracting FDI. Second, existing agglomeration economies encourage foreign investors. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions.
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