Trade's Impact on the Labor Share: Evidence from German and Italian Regions
Claudia M. Buch
IAW Discussion Paper No. 46,
2008
Abstract
Has the labor share declined? And what is the impact of international trade? These
questions are not only relevant in an international context they also matter for
understanding the regional distribution of incomes in a given country. In this
paper, we study two regions with trade exposures that differ from the rest of the
country, and which display distinct changes in the labor share. East German and
Southern Italian regions have a degree of international openness which is below
the countries’ averages. At the same time, there has been a more pronounced
decline in the labor share in East Germany than in West Germany. In Southern
Italy, the labor share has increased in recent years. We show that increased trade
openness is not the main culprit behind changing labor shares.
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Foreign Subsidiaries in the East German Innovation System – Evidence from manufacturing industries
Jutta Günther, Johannes Stephan, Björn Jindra
Applied Economics Quarterly Supplement,
No. 59,
2008
Abstract
This paper analyses the extent of technological capability of foreign subsidiaries located in East Germany, and looks at the determinants of foreign subsidiaries’ technological sourcing behaviour. The theory of international production underlines the importance of strategic and regional level variables. However, existing empirical approaches omit by and large regional level factors. We employ survey evidence from the “FDI micro database” of the IWH, that was only recently made available, to conduct our analyses. We find that foreign subsidiaries are above average technologically active in comparison to the whole East German manufacturing. This can be partially explained by the industrial structure of foreign direct investment. However, only a limited share of foreign subsidiaries with R&D and/or innovation activity source technological knowledge from the East German innovation system. If a subsidiary follows a competence augmenting strategy or does local trade, it is more likely to source technological knowledge locally. The endowment of a region with human capital and a scientific infrastructure has a positive effect too. The findings suggest that foreign subsidiaries in East Germany are only partially linked with the regional innovation system. Policy implications are discussed.
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IWH-Industrieumfrage im September 2008: Eingetrübte Aussichten – Investitionsgüter- und Konsumgüterhersteller aber weiterhin zuversichtlich
Cornelia Lang
Wirtschaft im Wandel,
No. 10,
2008
Abstract
Die Stimmung im Verarbeitenden Gewerbe Ostdeutschlands hat sich unter den rund 300 vom IWH regelmäßig befragten Unternehmen im September weiter eingetrübt. Zwar fällt die Beurteilung der aktuellen Geschäftslage per saldo einen Punkt günstiger aus als im Juli und meldet eine deutliche Mehrheit der Unternehmen gegenwärtig eine „gute“ oder „eher gute“ Geschäftstätigkeit. Die Aussichten für die nächsten sechs Monate haben sich gegenüber der Juliumfrage aber deutlich verschlechtert. Der Saldo der Geschäftsaussichten sank um acht Punkte und damit zum zweiten Mal in Folge in beachtlichem Umfang.
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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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Migration Potential of East German Regions
Alexander Kubis, Lutz Schneider
Wirtschaft im Wandel,
No. 10,
2008
Abstract
The study analyses the attractiveness of East German regions as destination for inter-regional movements. We found remarkable migration flows towards East Germany even from the Western part. Urban centres particularly benefit from substantial migration inflows. But also some peripheral regions are able to attract considerable in-migration if they provide superior natural beauty and/or cultural institutions.
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Economic Effects of the Halle Institute for Economic Research
Ulrich Blum
Wirtschaft im Wandel,
No. 10,
2008
Abstract
The most important approach to assess the scholarly performance of an institute is to evaluate its academic output. Economic research institutes such as the Halle Institute for Economic Research (IWH) furthermore are targeted at providing policy advice to public authorities. This adds an additional criterion, the ability to impact policy discussions in Germany and beyond.
A rarely discussed issue is the effect of an institute on the local economy. The IWH is located in a region of East Germany that is still catching up economically. Transformation problems are still very visible. In such an economic environment, the expenditures of an institute play an important role in stabilizing local demand. The analysis shows, by using input-output-methods, that the most important factor for the local economy is the demand stemming from wages earned by the employees of the institute. Especially the local area, where most of the staff lives, heavily benefits from this effect. Expenditures of about 4.6 million Euros which include the salaries of the staff of about 70 persons generates sufficient demand in the area to guarantee employment for another 35 persons. In addition, as crowding out of activities by additional demand is presently not an issue in East Germany, the taxes generated account for a considerable part of the budget.
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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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Rents and Quality of Life in Eastern Germany
Dominik Weiß
IWH Discussion Papers,
No. 12,
2008
Abstract
The rent levels between East- and Westgermany differ less than one Euro on average. This difference seems very slow regarding the persistant economic disparities and high vacancy rates in East-Germany.
Based on the assumtion, that income and life quality aspects have an impact on the local rent level a set of variables is regressed on the rent of several housing quality segments in a cross-section analysis at the community-level. The regression contains demographic, economic and housing-market-related variables and a dummy variable for east germany. It incorporates hypotheses about a special supplier structure and several market interventions that are related to the transformation process from socialistic into market economic structures after the reunification in the 1990s.
The results show a significant positive coeficiant for the east german dummy in two segments of the housing stock. Further Research about the reasons for the extra charge are important, because theese findings may be responsible for the continous out migration from East Germany.
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In Focus: State is Winner of Recent German Upswing
Axel Lindner
Wirtschaft im Wandel,
No. 9,
2008
Abstract
In 2006 and 2007, production expanded briskly in Germany. Real disposable incomes of private households, however, were almost stagnant. This article sheds, with help of national accounts data, some light on the reasons for this discrepancy: By far the most important factor is that the share of the general government in the disposable income of the whole economy increased strongly. The share of corporations in the disposable income increased, too. Finally, the deflator for consumption rose by more than the deflator of GDP mainly because of the price hike for imported commodities and energy.
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Aktuelle Trends: Innovationstätigkeit in Ostdeutschland ungebrochen
Jutta Günther, Marco Sunder, Dirk Trocka
Wirtschaft im Wandel,
No. 9,
2008
Abstract
Innovationen im Sinne neuer Produkte und Produktionsprozesse sind Ausdruck des technischen Fortschritts und ein wesentlicher Faktor für die betriebliche Wettbewerbsfähigkeit. Wie die aktuelle Welle des IAB-Betriebspanels von 2007 zeigt, kann sich das Verarbeitende Gewerbe in Ostdeutschland im Vergleich zu Westdeutschland auf allen drei Gebieten der Produktinnovationen gut behaupten. Jeweils die Hälfte aller Betriebe in Ost- und Westdeutschland führte im Befragungszeitraum (2005 bis 2006) mindestens eine der drei Produktinnovationen (Weiterentwicklung vorhandener Produkte, die Erweiterung der Produktpalette um bereits am Markt vorhandene Produkte und die Einführung von Marktneuheiten) durch. Betrachtet man die Marktneuheiten, also die für die technologische Leistungsfähigkeit besonders relevanten Innovationen, so liegen Ost- und Westdeutschland mit 14% bzw. 13% praktisch gleichauf (2002 bis 2003 waren es 8% bzw. 6%). Die hinsichtlich der Marktneuheiten besonders innovativen Branchen des Verarbeitenden Gewerbes in Ostdeutschland sind die Chemische Industrie, die Elektrotechnik sowie der Bereich Gummi und Kunststoffe. Im Vergleich dazu sind in Westdeutschland die Elektrotechnik und der Sonstige Fahrzeugbau, zu dem auch der Flugzeugbau zählt, die innovativsten Branchen.
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