Does IFRS Information on Tax Loss Carryforwards and Negative Performance Improve Predictions of Earnings and Cash Flows?
Sandra Dreher, Sebastian Eichfelder, Felix Noth
Journal of Business Economics,
forthcoming
Abstract
We analyze the usefulness of accounting information on tax loss carryforwards and negative performance to predict earnings and cash flows. We use hand-collected information on tax loss carryforwards and corresponding deferred taxes from the International Financial Reporting Standards tax footnotes for listed firms from Germany. Our out-of-sample tests show that considering accounting information on tax loss carryforwards does not enhance performance forecasts and typically even worsens predictions. The most likely explanation is model overfitting. Besides, common forecasting approaches that deal with negative performance are prone to prediction errors. We provide a simple empirical specification to account for that problem.
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Import Competition and Firm Productivity: Evidence from German Manufacturing
Richard Bräuer, Matthias Mertens, Viktor Slavtchev
World Economy,
forthcoming
Abstract
Abstract We study how different types of import competition affect firm productivity using firm-product data from German manufacturing (2000-2014). Competition from high-income countries causes affected domestic firms to increase their productivity and lower their prices. Oppositely, import competition from low-wage countries does not lead to firm productivity gains. Instead, domestic firms' sales and input usage decline. Our findings confirm the intuition of ladder models that the effect of competition depends on the "closeness" of competitors. They are in line with widespread X-inefficiencies throughout the economy, which firms reduce in response to competition from high-income countries.
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Konjunktur aktuell: Deutschland weiter im Abschwung
Konjunktur aktuell,
No. 3,
2023
Abstract
Die Weltwirtschaft verliert im Herbst 2023 weiter an Schwung. Die Produktion im Verarbeitenden Gewerbe und der globale Warenhandel stagnieren, gestiegene Leitzinsen verschlechtern das Investitionsklima. Die restriktive Wirtschaftspolitik drückt vor allem die europäische Konjunktur, welche zusätzlich von der Unsicherheit durch den russischen Angriffskrieg belastet wird. In Deutschland belasten die hohe Inflation, gestiegene Zinsen, eine schwache Auslandsnachfrage und Verunsicherung unter privaten Haushalten und Unternehmen die Wirtschaft. Die konjunkturellen Risiken sind für die Bauwirtschaft besonders hoch. Alles in allem dürfte das Bruttoinlandsprodukt 2023 um 0,5% zurückgehen, für das kommende Jahr wird ein Zuwachs von 0,9% prognostiziert.
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Safety Net or Helping Hand? The Effect of Job Search Assistance and Compensation on Displaced Workers
Daniel Fackler, Jens Stegmaier, Richard Upward
IWH Discussion Papers,
No. 18,
2023
Abstract
We provide the first systematic evidence on the effectiveness of a contested policy in Germany to help displaced workers. So-called “transfer companies” (Transfergesellschaften) employ displaced workers for a fixed period, during which time workers are provided with job-search assistance and are paid a wage which is a substantial fraction of their pre-displacement wage. Using rich and accurate data on workers’ employment patterns before and after displacement, we compare the earnings and employment outcomes of displaced workers who entered transfer companies with those that did not. Workers can choose whether or not to accept a position in a transfer company, and therefore we use the availability of a transfer company at the establishment level as an IV in a model of one-sided compliance. Using an event study, we find that workers who enter a transfer company have significantly worse post-displacement outcomes, but we show that this is likely to be the result of negative selection: workers who lack good outside opportunities are more likely to choose to enter the transfer company. In contrast, ITT and IV estimates indicate that the use of a transfer company has a positive and significant effect on employment rates five years after job loss, but no significant effect on earnings. In addition, the transfer company provides significant additional compensation to displaced workers in the first 12 months after job loss.
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Committing to Grow: Privatizations and Firm Dynamics in East Germany
Ufuk Akcigit, Harun Alp, André Diegmann, Nicolas Serrano-Velarde
IWH Discussion Papers,
No. 17,
2023
Abstract
This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term.
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IWH-Flash-Indikator III. und IV. Quartal 2023
Katja Heinisch, Oliver Holtemöller, Axel Lindner, Birgit Schultz
IWH Flash Indicator,
No. 3,
2023
Abstract
Im zweiten Quartal 2023 stagnierte die Wirtschaftsleistung in Deutschland. Die Konsumausgaben der privaten Haushalte konnten sich nach den deutlichen Rückgängen in den beiden Vorquartalen stabilisieren. Dazu dürfte wohl auch die sich in den vergangenen Monaten abschwächende Inflation beigetragen haben. Die Sorgen der Unternehmen stiegen hingegen weiter deutlich: So setzt das Gemisch aus hohen Energiepreisen, geopolitischen und regulatorischen Risiken, gestiegenen Zinsen und Fachkräftemangel vor allem das Verarbeitende Gewerbe kräftig unter Druck. Die damit verbundenen Anpassungen lassen eine konjunkturelle Besserung erst Ende des Jahres 2023 möglich erscheinen. Das Bruttoinlandsprodukt (BIP) dürfte daher laut IWH-Flash-Indikator im dritten Quartal 2023 um 0,3% sinken. Im vierten Quartal beträgt der Zuwachs dann gemäß Indikator 0,5% (vgl. Abbildung 1).
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Preferred Field of Study and Academic Performance
Francesco Berlingieri, André Diegmann, Maresa Sprietsma
Economics of Education Review,
August
2023
Abstract
This paper investigates the impact of studying the first-choice university subject on dropout and switching field of study for a cohort of students in Germany. Using detailed survey data, and employing an instrumental variable strategy based on variation in the local field of study availability, we provide evidence that students who are not enrolled in their preferred field of study are more likely to change their field, delay graduation and drop out of university. The estimated impact on dropout is particularly strong among students of low socio-economic status and is likely to be driven by lower effort and motivation.
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AIECE General Report, Part 2, Spring 2023
Andrej Drygalla, Axel Lindner, Birgit Schultz
IWH Studies,
No. 4,
2023
Abstract
The Halle Institute for Economic Research (IWH) is a member of AIECE (Association d'Instituts Europeens de Conjoncture Economique/Association of European Conjuncture Institutes), an association of independent European institutes involved in surveying economic conditions and developments, and in short-term macroeconomic forecasting. The main objective of the Association is to stimulate the exchanges between its members with a view to improve their insight into international economic developments. This ranges from the exchange of statistical or institutional information to discussions on economic policy Guidelines to common research activities. The AIECE organises between its members an exchange of view, of information and of literature on international economic developments, in particular in Europe. The Association provides the framework for joint activities of its members in areas of common interest. Its structure allows its members to develop common views on the future cyclical development. In order to meet these objectives the Association has half-yearly plenary meetings, centred around a general report on the European conjuncture prepared in turn by one of the members in cooperation with the other member institutes, but also with discussions of the working group reports and of special surveys prepared by member institutes. In Spring 2023, the report was written by the Halle Institute for Economic Research (IWH).
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AIECE General Report, Part 1, Spring 2023
Andrej Drygalla, Axel Lindner, Birgit Schultz
IWH Studies,
No. 3,
2023
Abstract
The Halle Institute for Economic Research (IWH) is a member of AIECE (Association d'Instituts Europeens de Conjoncture Economique/Association of European Conjuncture Institutes), an association of independent European institutes involved in surveying economic conditions and developments, and in short-term macroeconomic forecasting. The main objective of the Association is to stimulate the exchanges between its members with a view to improve their insight into international economic developments. This ranges from the exchange of statistical or institutional information to discussions on economic policy Guidelines to common research activities. The AIECE organises between its members an exchange of view, of information and of literature on international economic developments, in particular in Europe. The Association provides the framework for joint activities of its members in areas of common interest. Its structure allows its members to develop common views on the future cyclical development. In order to meet these objectives the Association has half-yearly plenary meetings, centred around a general report on the European conjuncture prepared in turn by one of the members in cooperation with the other member institutes, but also with discussions of the working group reports and of special surveys prepared by member institutes. In Spring 2023, the report was written by the Halle Institute for Economic Research (IWH).
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22.06.2023 • 16/2023
Revival in service sectors, but industrial activity remains weak for the time being
After the recession during winter, the German economy will expand at a moderate pace in the coming quarters and despite higher interest rates, as private consumption will pick up again with slowly declining inflation and increased wage momentum. In its summer forecast, the Halle Institute for Economic Research (IWH) expects gross domestic product to decline by 0.3% in 2023, while growth of 1.7% is forecast for the coming year.
Oliver Holtemöller
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