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Germany’s economy is so bad even sausage factories are closingIWHThe Economist, January 15, 2026
The 'cluster theory' has become one of the main concepts promoting regional competitiveness, innovation, and growth. As most empirical applications focus on measures of concentration of one industrial branch in order to identify regional clusters, the appropriate analysis of specific vertical relations is developing in this discussion. This paper tries to identify interrelated sectors via national input-output tables with the help of minimal flow analysis (MFA). The regionalization of these national industry templates is carried out with the allocation of branch-specific production values on regional employment. As a result, the paper shows concentrations of vertical clusters in only 27 of 439 German Nomenclature des Units Territoriales Statistiques (NUTS)-3 regions.
If regional development agencies assume the cluster concept to be an adequate framework to promote regional growth and competitiveness, it is necessary to identify industrial clusters in a comprehensive manner. Previous studies used a diversity of methods to identify the predominant concentrations of economic activity in one industrial sector in a region. This paper is based on a multidimensional approach developed by Titze et al. With the help of the combination of concentration measures and input–output methods they were able to identify horizontal and vertical dimensions of industrial clusters. This paper aims to refine this approach by using a superior measure of spatial concentration and by integrating information about spatial interdependence of industrial cluster structures to contribute to a more adequate framework for industrial cluster identification.
This paper explores the impact of industrial clusters on regional growth at the German labour market region level using a regional convergence model. Based on the results of an exploratory study of the geography of German industrial clusters, we are able to differentiate the impact of industrial clustering from a horizontal and a vertical perspective while taking regional convergence into consideration. The results indicate that in addition to an all-German process of convergence, a specific East German one can be identified. The different types of industrial clusters show mixed effects within this framework. While vertically isolated industrial clusters have a negative impact on regional growth in this period, positive growth effects can be identified when industrial clusters show an intra-regional vertical interconnectedness.
Using a large linked employer–employee data set for Germany, we find that the existence of a works council is associated with a lower separation rate to employment, in particular for workers with low tenure. While works council monopoly effects show up in all specifications, clear voice effects are only visible for low tenured workers. Works councils also reduce separations to nonemployment, and this impact is more pronounced for men. Insurance effects only show up for workers with tenure of more than 2 years. Our results indicate that works councils to some extent represent the interests of a specific clientele.
In 2004, European competition law had been considerable changed by the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform and its arising uncertainty on the agreements firms implement, especially on innovative agreements like vertical R&D agreements. By means of a decision theoretic approach, we show that the law’s intention to reduce the incentive to establish illegal cartels will be reached but innovating cooperations might be prevented. To avoid this unintended side effect, fines but not the monitoring activities should be increased.
Die Präferenzen von Individuen in Transformationsregionen sind immer noch durch Prägungen des früheren sozialistischen Systems bestimmt. Diese These der sozialistischen Prägung wird im Beitrag getestet, indem untersucht wird, ob sich ein Einfluss der Sozialisation in einem solchen System auf die Akkumulation von Sozialkapital und, als Konsequenz, auf die Präferenzen für räumliche Mobilität nachweisen lässt. Gegenstand der Analyse ist der paradigmatische Fall Ostdeutschlands, wo die Mobilitätsneigung deutlich geringer zu sein scheint als im westlichen Teil. Auf Grundlage einer IV ordered probit Schätzung wird erstens belegt, dass Ostdeutsche, sofern sie im Sozialismus aufgewachsen sind, stärker in lokal gebundenes informelles Sozialkapital investiert sind. Zweitens bestätigt sich die These, dass eine Partizipation in derartigen Netzwerken die Mobilitätspräferenz verringert. Drittens zeigt sich, dass sich nach Kontrolle dieses Netzwerkeffektes der Mobilitätsrückstand der Ostdeutschen substantiell verringert. Die eher geringe räumliche Mobilität der ostdeutschen Bevölkerung erscheint daher zu einem erheblichen Teil den typischen Sozialkapitalmustern post-sozialistischer Gesellschaften geschuldet zu sein.
It stands to reason that social unrest does not erupt out of the blue. Although there are a great many reasons why social dismay might descend into social disorder, only few yardsticks or indices can plausibly be used to gauge the potential for social unrest (PSU). If policy makers want to undertake public action to prevent social dismay escalating into social disruption, they obviously need to draw on practical sensors. This paper assesses critically the adequacy of two such measures, the polarization (P) index, and the total relative deprivation (TRD) index. The paper proposes a tentative guide to selecting between these two measures. A review of three stylized scenarios suggests that, where income redistributions reduce the number of distinct income groups, and when each group is characterized by a strong sense of within-group identity, the P index surpasses the TRD index as a basis for predicting PSU. When the within-group identification is weak, however, it is better to use the TRD index to predict PSU.
Die Software CO2-Navigator wendet den Realoptionsansatz und den Risikomanagementprozess auf den unternehmerischen Umgang mit dem Klimawandel an. Er richtet sich in erster Linie an emissionsintensive, kleine und mittlere Unternehmen ist jedoch auch in größeren Unternehmen, die beispielsweise eine eigene „Sustainability“-Abteilung unterhalten, anwendbar. Der Wertbeitrag des Softwaretools besteht darin, dass es die Aspekte Klimastrategie, quantitative Bewertung von Klimaschutzinvestitionen sowie Emissionsrechtemanagement vereint. Es kann im Unternehmen in Bereichen strategisches Management, regulatorisches Management, Energie- und Umweltmanagement, Technologiemanagement sowie Controlling Anwendung finden. Der spezielle Wertbeitrag dieses Artikels liegt in der Verknüpfung von Klimarisikomanagement und Realoptionsansatz sowie in der Darstellung des CO2-NAVIGATORs vor dem Hintergrund seiner Entwicklung im Sinne konstruktionsorientierter Forschung.
This study analyzes the relationship between the specialization of a region in certain industries and the efficiency of the region in generating new knowledge. The efficiency measure is constructed by relating regional R&D input and output. An inversely u-shaped relationship is found between regional specialization and R&D efficiency, indicating the presence of externalities of both Marshall and Jacobs’ type. Further factors influencing efficiency are externalities resulting from high R&D intensity of the local private sector as well as knowledge from local public research institutions. The impact of both the specialization and the additional factors is, however, different for regions at different efficiency levels.
The aim of this paper is to bring economics-based finance research more into the focus of international business theory. On the basis of an analytical model that introduces financial constraints into incomplete contracting in an international vertical trade relationship, we propose an integrated framework that facilitates the study of the interdependencies between internalisation decisions, firm-internal allocations of control rights, and the debt capacity of firms. We argue that the financial constraint of an MNE and/or its supplier should be considered as an important determinant of internal governance structures, complementary to, and interacting with, institutional factors and proprietary knowledge.
