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East Germany's lead over West Germany in terms of growth is bound to shrink – Implications of the Joint Economic Forecast Spring 2024 for the East German economy
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Year
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Vertical Grants and Local Public Efficiency
Ivo Bischoff, Peter Bönisch, Peter Haug, Annette Illy
Public Finance Review, No. 3, 2019
Abstract
The existing empirical literature on the impact of vertical grants on local public-sector efficiency yields mixed results. Given the fact that vertical financial equalization systems often reduce differences in fiscal capacity, we argue that empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency of public service production even when the underlying causal effect is not. We provide a simple illustrative theoretical model to show the logic of our argument and illustrate its relevance by an empirical case study for the German state of Saxony-Anhalt. We show that our main argument of an inference-disturbing effect applies to those existing studies that are more optimistic about the impact of vertical grants. Finally, we argue that it may disturb the inference drawn from studies in a number of other countries where vertical grants—intended or not—concentrate in fiscally weak municipalities.
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Do Smarter Teachers Make Smarter Students?
Eric A. Hanushek, Marc Piopiunik, Simon Wiederhold
Education Next, No. 2, 2019
Abstract
Student achievement varies widely across developed countries, but the source of these differences is not well understood. One obvious candidate, and a major focus of research and policy discussions both in the United States and abroad, is teacher quality.
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Industrial Relations: Worker Codetermination and Collective Wage Bargaining
Steffen Müller, Claus Schnabel
Jahrbücher für Nationalökonomie und Statistik, No. 1, 2019
Abstract
Trade unions and employers’ associations, collective bargaining, and employee representation at the workplace are the cornerstones of industrial relations systems in many developed countries. Germany stands out as a country with powerful works councils and a high coverage rate of collective bargaining agreements, supported by encompassing interest groups of employees and employers and by the state. The German case and the perceived stability of its industrial relations regime have attracted considerable attention among researchers and politicians, which also has to do with the country’s high productivity, comparably few strikes, and relatively minor employment problems. However, in recent years industrial relations in many countries including Germany have come under pressure and the fact that there is no obvious and clearly superior alternative to the current regime of industrial and labour relations may not be sufficient to guarantee the survival of the present system.
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Do Diasporas Affect Regional Knowledge Transfer within Host Countries? A Panel Analysis of German R&D Collaborations
Lutz Schneider, Alexander Kubis, Mirko Titze
Regional Studies, No. 1, 2019
Abstract
Interactive regional learning involving various actors is considered a precondition for successful innovations and, hence, for regional development. Diasporas as non-native ethnic groups are regarded as beneficial since they enrich the creative class by broadening the cultural base and introducing new routines. Using data on research and development (R&D) collaboration projects, the analysis provides tentative evidence that the size of diasporas positively affects the region’s share of outward R&D linkages enabling the exchange of knowledge. The empirical analysis further confirms that these interactions mainly occur between regions hosting the same diasporas, pointing to a positive effect of ethnic proximity rather than ethnic diversity.
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Innovation and Top Income Inequality
Philippe Aghion, Ufuk Akcigit, Antonin Bergeaud, Richard Blundell, David Hemous
Review of Economic Studies, No. 1, 2019
Abstract
In this article, we use cross-state panel and cross-U.S. commuting-zone data to look at the relationship between innovation, top income inequality and social mobility. We find positive correlations between measures of innovation and top income inequality. We also show that the correlations between innovation and broad measures of inequality are not significant. Next, using instrumental variable analysis, we argue that these correlations at least partly reflect a causality from innovation to top income shares. Finally, we show that innovation, particularly by new entrants, is positively associated with social mobility, but less so in local areas with more intense lobbying activities.
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Innovation Cooperation in East and West Germany: A Study on the Regional and Technological Impact
Uwe Cantner, Alexander Giebler, Jutta Günther, Maria Kristalova, Andreas Meder
International Journal of Computational Economics and Econometrics, 3/4 2018
Abstract
In this paper, we investigate the impact of regional and technological innovation systems on innovation cooperation. We develop an indicator applicable to regions, which demonstrates the relative regional impact on innovation cooperation. Applying this method to German patent data, we find that regional differences in the degree of innovation cooperation do not only depend on the technology structure of a region but also on specific regional effects. High-tech oriented regions, whether east or west, are not automatically highly cooperative regions. East German regions have experienced a dynamic development of innovation cooperation since re-unification in 1990. Their cooperation intensity remains higher than in West German regions.
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Taken by Storm: Business Financing and Survival in the Aftermath of Hurricane Katrina
Emek Basker, Javier Miranda
Journal of Economic Geography, No. 6, 2018
Abstract
We use Hurricane Katrina’s damage to the Mississippi coast in 2005 as a natural experiment to study business survival in the aftermath of a capital-destruction shock. We find very low survival rates for businesses that incurred physical damage, particularly for small firms and less-productive establishments. Conditional on survival, larger and more-productive businesses that rebuilt their operations hired more workers than their smaller and less-productive counterparts. Auxiliary evidence from the Survey of Business Owners suggests that the differential size effect is tied to the presence of financial constraints, pointing to a socially inefficient level of exits and to distortions of allocative efficiency in response to this negative shock. Over time, the size advantage disappeared and market mechanisms seem to prevail.
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Innovation, Reallocation, and Growth
Daron Acemoglu, Ufuk Akcigit, Harun Alp, Nicholas Bloom, William R. Kerr
American Economic Review, No. 11, 2018
Abstract
We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms.
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Business Dynamics of Innovating Firms: Linking U.S. Patents with Administrative Data on Workers and Firms
Stuart Graham, Cheryl Grim, Tariqul Islam, Alan Marco, Javier Miranda
Journal of Economics and Management Strategy, No. 3, 2018
Abstract
This paper discusses the construction of a new longitudinal database tracking inventors and patent-owning firms over time. We match granted patents between 2000 and 2011 to administrative databases of firms and workers housed at the U.S. Census Bureau. We use inventor information in addition to the patent assignee firm name to improve on previous efforts linking patents to firms. The triangulated database allows us to maximize match rates and provide validation for a large fraction of matches. In this paper, we describe the construction of the database and explore basic features of the data. We find patenting firms, particularly young patenting firms, disproportionally contribute jobs to the U.S. economy. We find that patenting is a relatively rare event among small firms but that most patenting firms are nevertheless small, and that patenting is not as rare an event for the youngest firms compared to the oldest firms. Although manufacturing firms are more likely to patent than firms in other sectors, we find that most patenting firms are in the services and wholesale sectors. These new data are a product of collaboration within the U.S. Department of Commerce, between the U.S. Census Bureau and the U.S. Patent and Trademark Office.
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Plant-level Employment Development before Collective Displacements: Comparing Mass Layoffs, Plant Closures and Bankruptcies
Daniel Fackler, Steffen Müller, Jens Stegmaier
Applied Economics, No. 50, 2018
Abstract
This article analyzes the development of employment levels and worker flows before bankruptcies, plant closure without bankruptcies and mass layoffs. Utilizing administrative plant-level data for Germany, we find no systematic employment reductions prior to mass layoffs, a strong and long-lasting reduction prior to closures, and a much shorter shadow of death preceding bankruptcies. Employment reductions in closing plants, in contrast to bankruptcies and mass layoffs, do not come along with increased worker flows. These patterns point to an intended and controlled shrinking strategy for closures without bankruptcy and to an unintended collapse for bankruptcies and mass layoffs.
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