The Formation of Photovoltaic Clusters in Eastern Germany
Matthias Brachert, Christoph Hornych
Wirtschaft im Wandel,
No. 2,
2009
Abstract
One of the weaknesses of the East German economy is the relative lack of management functions and headquarters along with the relatively low research and developing efforts of the companies. With the emergence of new industries, there is a chance to respond to these weaknesses. Against this background, the article examines the emergence and development of the photovoltaic industry in Eastern Germany. The strong production and sales growth of the industry in the recent years is a result of central government funding programs. But up to now, East German regions have profited disproportionately from the growth of the sector. In 2008, we find about 14 000 direct industry employees in this sector in Eastern Germany.
Based on the Window of Locational Opportunity concept (WLO) by Storper and Walker – a stage model of industrial development –, this article describes the reasons of the development of the industry in Eastern Germany from 1996 until 2008. In spite of persistent growth processes and the foundation of new companies within the photovoltaic industry, a concentration on some certain locations, linked with the process of the formation of industrial clusters, becomes apparent. In a first result of the emergence of clusters, the regions of Bitterfeld-Wolfen, Dresden/Freiberg, Erfurt/Arnstadt, Frankfurt (Oder) and Berlin build leading sites in Eastern Germany.
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Institutions and Clusters
Ulrich Blum
Handbook on Research on Clusters,
2009
Abstract
We show that transaction costs and external economies, which change institutional arrangements heavily, influence cluster structures. Two types of clusters, (i) the vertical cluster where a hub dominates suppliers that have settled in the vicinity and, (ii), the horizontal cluster where firms share a common platform – historically a natural resource, today often knowledge and competences. Furthermore, non-cluster firms exist. We show, in a model, how these types emerge from the interaction found in firms and the interaction of firms within a network system. Changing transaction costs and externalities influence clusters and produce cluster dynamics. The sustainability of a cluster depends on its ability to stabilize the basis of its existence. This is easier for horizontal clusters that can steadily develop their knowledge and competence platform than for a vertical cluster which heavily depends on product life cycles. We give some evidence for clusters in East Germany, which presents an interesting example. The Treuhand atomized the giant combines, so that the rearrangements may be interpreted as results of fundamental market forces. Therefore major influences on the emerging institutional structure should stem from transaction costs and externalities.
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Race to the Market: Can Standards Survive the Acceleration of Innovation and Product Life Cycles?
Ulrich Blum
Spatial Dispersed Production and Network Governance, Papers Presented at the 11th Uddevalla Symposium, 15 – 17. May 2008, Kyoto, Research Report 2008,
2008
Abstract
Plagiarism of emerging market countries has for a considerable time been seen as the main challenge to the western approach of codifying and securing intellectual property rights (IPRs). This neglects the fact that historically all countries which tried to converge to the level of successful economies copied technology. The discussion shadows our view that the more imminent question is whether the steady increase in competition intensity which shortens product life cycles and puts pressure on the invention and innovation system, provides enough time to patent and to standardize. As patent activity not only provides incentives for sinking costs into R&D but is also a first step in the dissemination of technologies, and as standards, especially formal standards, generate level playing fields in broad and reliable markets, this may be critical in the long run. Furthermore, the migration of technologies as a result of a steady reorganization of the spatial division of labor may lead to the adverse situation that countries harboring technologies do not have appropriate institutions for knowledge codification.
Exogenous factors that – at least in the short run – cannot be influenced by the standardization bodies are the level of cooperation among interested parties (and mutual trust and institutional linkage), the competitiveness of the technology, the ability to generate externalities by knowledge codification, and the productivity of the technologies. The most important single success factor that standardization bodies can influence is the speed with which a committee proceeds to timely publish formal standards. With reference to a game-theoretical model and based on data for 1997 and 2007 on published formal standards, we show that until now, standardization bodies seem to have successfully coped with the situation.
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Financial Crisis Burdens Economic Activity in Poland
Martina Kämpfe
Wirtschaft im Wandel,
No. 12,
2008
Abstract
In the first half of the year 2008, domestic demand –the main force behind growth – only marginally declined. Still extraordinarily high was the demand for the output of construction firms. Although demand from Western European countries declined since spring, the foreign trade was not much behind its level of the previous year because of high export activity to Asian and Eastern European countries. In the second half of the year, both, the finance and banking system as well as the real economy, were impacted by the consequences of global financial crisis. Indications of that are the temporary collapse of the polish stock market, the rapid fall of the Złoty and the weakening of domestic demand and exports. Against this background, expansion of economic activity in 2009 will continue at a markedly lower level.
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Globalisation and the Competitiveness of the Euro Area
Filippo di Mauro, Katrin Forster
ECB Occasional Paper Series,
No. 97,
2008
Abstract
Against the background of increasing competition and other significant structural changes implied by globalisation, maintaining and enhancing competitiveness has evolved into one of the prime concerns in most countries. Following up on previous work (see in particular ECB Occasional Papers No. 30 and No. 55), this Occasional Paper examines the latest developments and prospects for the competitiveness and trade performance of the euro area and the euro area countries. Starting from an analysis of most commonly used, traditional competitiveness indicators, the paper largely confirms the findings of previous studies that there have been substantial adjustments in euro area trade. Euro area firms have taken advantage of the new opportunities offered by globalisation, and have at the same time been increasingly challenged by emerging economies. This is primarily reflected in the loss of export market shares which have been recorded over the last decade. While these can partly be related to the losses in the euro area's price competitiveness, further adjustment also seems warranted with regard to the export specialisation. Compared with other advanced competitors, the euro area remains relatively more specialised in labour intensive categories of goods and has shown only a few signs of a stronger specialisation in research-intensive goods. Nevertheless, the paper generally calls for a more cautious approach when assessing the prospects for euro area competitiveness, as globalisation has made it increasingly difficult to define and measure competitiveness. Stressing the need to take a broader view on competitiveness, specifically with a stronger emphasis on productivity performance, the paper also introduces a more elaborate framework that takes into account the interactions between country-specific factors and firm-level productivity. It thus makes it possible to construct more broadly defined competitiveness measures. Pointing to four key factors determining the global competitiveness of euro area countries - market accessibility, market size, technological leadership of firms and institutional set-up - the analysis provides further arguments for continuing efforts to increase market integration and strengthen the competitive environment within Europe as a mean of enhancing resource allocation and coping with the challenges globalisation creates.
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Demographic Change and Labour Markets: Why are Older Employees less Mobile?
Lutz Schneider
Wirtschaft im Wandel,
No. 10,
2008
Abstract
Since older workers are less disposed to change jobs workforce ageing will affect labour mobility in Germany. On the basis of the IAB-Employment Sample (IABS) the contribution analyzes the effect of age on job and occupational mobility. The study focuses on the question whether older workers are less mobile due to the optimal matching quality of their current job which cannot be improved by job switches or whether other factors have to be considered for explaining the age related mobility decline.
Econometric results firstly confirm the significance of expected wage growth for mobility decision across all age groups. Secondly, older workers seem to benefit from wage increase due to a job change less frequently than younger workers. However, this factor explains only a part of the mobility lag. Even after controlling for the wage effect younger workers change jobs more often than older ones.
For this reason the opinion that ageing will impede the labour market adjustments cannot be disabled. If older workers only slightly react on wage signals and do not respond to attractive offers growing firms might face problems to recruit appropriate staff – a trend which could have negative consequences for technological and sectoral changes of the entire economy.
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Firm Density in East Germany: Findings from the Business Register
Gerhard Heimpold
Wirtschaft im Wandel,
No. 10,
2008
Abstract
The contribution focuses on the business density in East Germany in comparison with West Germany. For the purpose of the investigation, a new information source was used – the so-called Business Register. Business density in East Germany is of relevance for two reasons: First, when the wall came down in 1989, the East German economy suffered from the lack of private firms. Second, after 2000, a gap in terms of work places is still existent. The empirical data on business density in East Germany do not reveal an unequivocal picture. Measuring business density by comparing the number of firms with the respective number of population reveals a gap in terms of the number of businesses per 10 000 inhabitants in East Germany. The gap is above average with respect to firms in the manufacturing sector, and it is particularly high regarding larger manufacturing firms. Measuring the business density as a quota of the number of firms and the volume of Gross Domestic Product (GDP) reveals a reverse picture: The business density in relation to GDP is on average higher in comparison with the respective value in West Germany. Maybe, the size of the East German market sets limits regarding the number of firms which may act there. However, the size of the domestic market is not so relevant for the firms belonging to the manufacturing sector and to the business-related services since they are expanding to a large extent due to their export activities. Though from the manufacturing sector, relativly positive development perspectives can be expected, the number of large firms per 10 000 inhabitants is relatively low in comparison with West Germany. Public support for strengthening the business landscape in the East German manufacturing sector remains on the agenda of economic policy in Germany.
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German Economy on the Brink of Recession
Wirtschaft im Wandel,
2. Sonderausgabe
2008
Abstract
In autumn 2008, the word economy is in a downswing, caused by the commodity and energy price hike of the first half of the year, housing crises in the US and some other important countries, and in particular by the financial crisis that has recently intensified. The downswing will continue this year and for some time during 2009, and will only come to an end later next year if governments and central banks succeed in stabilizing financial markets in the coming months. In this case, lower prices of commodities and still high growth dynamics in important emerging markets countries will lead to a tentative revival of the world economy.
The German economy is on the brink of a recession. It is particularly vulnerable to a global downswing because exports of investment goods are of upmost importance for the overall economy. Because the uncertainty about the worldwide effects of the financial crisis is very high, the forecast is split. A more probable scenario is based on the assumption of a stabilizing world economy. In this scenario, the growth rate of the German economy in 2009 is 0.2%. The second scenario is based on the assumption of a worldwide recession next year and forecasts that German GDP will shrink by 0.8% in 2009.
Concerning policy, the institutes recommend a strengthening of the capital base of banks via injection of government money. This should be done in a way that gives incentives to banks for attracting additional capital from private sources.
A special chapter of the report analyzes the nature and causes of the price hikes of energy and commodities in the first half of 2008.
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Business Cycle Forecast: On the Edge?
Wirtschaft im Wandel,
No. 9,
2008
Abstract
During the summer of 2008, the world economy was further slowing. The financial crisis affects the real economy by tightened credit standards in the US and in the European Union, and housing markets are now in a severe crisis not only in the US, but also in some countries in Western Europe. Finally, consumption of households is affected by stagnating real disposable incomes due to the energy price hike. The slowing world economy, however, has caused the oil price to fall since July, and most emerging markets economies are, up to now, quite resilient.
In Germany, sentiment has deteriorated significantly. Production appears to be about stagnating in the summer. During winter, the devaluation of the euro and a beginning pick up of demand since July will help producers of tradable goods in Germany. Domestic demand will be supported by lower energy prices and healthily growing wage incomes. All in all, gross domestic product (gdp) (adjusted for the number of working days) will increase by 1,8% this year and by 0,8% in 2009.
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Monetary Policy and Financial (In)stability: An Integrated Micro–Macro Approach
Ferre De Graeve, Thomas Kick, Michael Koetter
Journal of Financial Stability,
No. 3,
2008
Abstract
Evidence on central banks’ twin objective, monetary and financial stability, is scarce. We suggest an integrated micro–macro approach with two core virtues. First, we measure financial stability directly at the bank level as the probability of distress. Second, we integrate a microeconomic hazard model for bank distress and a standard macroeconomic model. The advantage of this approach is to incorporate micro information, to allow for non-linearities and to permit general feedback effects between financial distress and the real economy. We base the analysis on German bank and macro data between 1995 and 2004. Our results confirm the existence of a trade-off between monetary and financial stability. An unexpected tightening of monetary policy increases the probability of distress. This effect disappears when neglecting microeffects and non-linearities, underlining their importance. Distress responses are largest for small cooperative banks, weak distress events, and at times when capitalization is low. An important policy implication is that the separation of financial supervision and monetary policy requires close collaboration among members in the European System of Central Banks and national bank supervisors.
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