The Role of the Intellectual Property Rights Regime for Foreign Investors in Post-Socialist Economies
Benedikt Schnellbächer, Johannes Stephan
IWH Discussion Papers,
No. 4,
2009
Abstract
We integrate international business theory on foreign direct investment (FDI) with institutional theory on intellectual property rights (IPR) to explain characteristics and behaviour of foreign investment subsidiaries in Central East Europe, a region with an IPR regime-gap vis-à-vis West European countries. We start from the premise that FDI may play a crucial role for technological catch-up development in Central East Europe via technology and knowledge transfer. By use of a unique dataset generated at the IWH in collaboration with a European consortium in the framework of an EU-project, we assess the role played by the IPR regimes in a selection of CEE countries as a factor for corporate governance and control of foreign invested subsidiaries, for their own technological activity, their trade relationships, and networking partners for technological activity. As a specific novelty to the literature, we assess the in influence of the strength of IPR regimes on corporate control of subsidiaries and conclude that IPR-sensitive foreign investments tend to have lower functional autonomy, tend to cooperate more intensively within their transnational network and yet are still technologically more active than less IPR-sensitive subsidiaries. In terms of economic policy, this leads to the conclusion that the FDI will have a larger developmental impact if the IPR regime in the host economy is sufficiently strict.
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Crisis Contagion in Central and Eastern Europe
Hubert Gabrisch
Wirtschaft im Wandel,
No. 12,
2008
Abstract
The global financial crisis reached the Central and Eastern European region. Fears of a recession are spreading among investors in Russia and the Ukraine due to the heavy decline of oil and steel prices and provoked a first wave of short-term capital withdrawals. The export sector of all countries in the region is affected by weakening global demand. Finally, the financial sector, which is dominated by international banks in almost all countries, appears as the contagion channel for risk adjustments of mother banks. The combined impact of all these causes and channels lead to a proliferation of restrictions in credit and money supply and an outflow of investment capital. A strong weakening of economic growth is on the way in the region, and a long-lasting recession seems possible in some countries, in first line in the Baltic countries. It becomes a superior task of governments to ease the length and depth of the approaching recession by a strong fiscal stimulus. A continuation of the present policy of fiscal consolidation or of nominal convergence toward a quick adoption of the Euro does not seem very advisable. If governments decided to support domestic demand, measures should be taken to strengthening of a genuinely domestic banking sector in order to maintain credit availability.
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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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On the Economics of Ex-Post Transfers in a Federal State: A Mechanism Design Approach
Martin Altemeyer-Bartscher, T. Kuhn
WWDP, 95,
No. 95,
2008
Abstract
As a common feature in many federal states grants-in aid are payed to jurisdictions ex post, i.e. after local policy measures have chosen. We show that the central government cannot offer grants ex ante in a federal states with informational asymmetries as well as inter-temporal commitment problems. Local governments’ incentives to provide public goods are distorted if they rely on federal grants-in-aid offered ex post. Furthermore it becomes obvious that local governments are apt to substitute tax revenue for higher grants-in-aid if relevant local data are unobservable for the central government. To which extend ex post transfers mitigate local governments’ incentives crucially depends on the information structure predominant in the federation.
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Is a Centralisation of Local Governmental Structures an Appropriate Way to Ensure an Efficient Provision of Local Public Services? Findings from Case Studies in the State of Saxony-Anhalt
Gerhard Heimpold, Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 1,
2008
Abstract
Choosing the appropriate organisational model for local government (i. e. centralised vs. federal model) forms an essential challenge for local communities. Against the background of Fiscal Federalism, a trade-off between the two models mentioned can be expected: Though the centralised model may bring up economies of scale and scope, the federal form of local government may have advantages, too, for instance regarding the extent of civil participation. The article has the intention to answer the question how the degree of centralisation/decentralisation of local governmental organisation affects the provision of services of public interest. The article is based on case studies conducted in ten municipalities located in the State of Saxony-Anhalt, Germany. The government of Saxony-Anhalt intends to implement a reform project targeted at the modernisation of local governmental organisation. The basic reform idea is to transform the local governmental structures from a situation (at the beginning of 2008) where a co-existence of centralised and federally organised municipalities is given towards a future situation where the centralised model should be dominating. In line with the expectation derived from theory, the empirical findings do not draw a picture, which is unequivocally in favour either of the centralised or of the federal model. However, the reform of modernisation of local governmental organisation should remain on the agenda, especially due to a shrinking population in the rural parts of Saxony-Anhalt. This could support the state government’s plans of a more centralized organisation of local government. But this would mean to give up the advantages of the existing federal model of local government. Therefore, in addition to the centralised model favoured by the state government, politicians in Saxony-Anhalt should look for the possibility of an alternative “third” model, which tries to combine the advantages of economies of scale with a greater degree of civil participation.
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Reform of Local Municipal Structures: Centralization not only Implicates Advantages
Peter Haug, Claus Michelsen
Wirtschaft im Wandel,
No. 11,
2007
Abstract
The question whether centralized or decentralized municipal structures are more efficient has been discussed, not only in Germany, for a long time primarily under aspects of law and administrative sciences. In this article, we use an economic approach instead. The prevailing theories on interjurisdictional competition are not conclusive about the cost and welfare effects of centralization. Therefore, using the example of Saxony-Anhalt we investigate empirically if there are any significant differences in expenses or personnel between more centralized municipal governance forms (“Einheitsgemeinden”) or rather decentralized forms (“Verwaltungsgemeinschaften”). Our cross-section analysis for selected municipal activities reveals that both types are very similar in their cost and manning structures. Significant differences can be explained rather by different population densities than by the organizational structure. Considering these results we do not recommend a forced amalgamation of the municipalities in Saxony-Anhalt. Especially, if frustration cost or the political transaction cost, which both rise with centralization, are taken into account.
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Comparative Study of Multinational Companies in the Enlarged EU - A Technology Transfer Perspective
Johannes Stephan, Björn Jindra, I. Klugert
Conference Proceedings of „Comparing International Competitiveness of Manufacturing Companies in the EU with Special Emphasis on Central and Eastern Europe“,
2007
Abstract
Our study makes a novel contribution to the analysis of the link between multinational companies' heterogeneity and technological transfer. Thereby, we focus on internal technology transfer i.e. technology flowing from the multinational enterprise to the foreign subsidiary. We estimate the impact of corporate governance, subsidiary objectives, local absorptive capacity, as well as the cultural and geographic distance as potential determinants of internal technology transfer. We control for other observed firm- and industry-specific effects as well as unobserved host-country effects. We test our hypothesis with a firm-level data simultaneously collected from 434 foreign subsidiaries in Poland, Hungary, Estonia, Slovakia and Slovenia in 2002/2003. The evidence seems to indicate that the nature of the parent-subsidiary relationship is subject to the institutional context, subsidiary objectives, and risks involved for the foreign parent. These factors in turn determine the incentives for transferring knowledge to the subsidiary. Foreign subsidiaries' absorptive capacity enhances the intensity of internal technology transfer. In contrast geographic distance seems to limit the extent of technology transfer within the company. Country-of-origin-effects seem not to be statistically relevant for internal technology transfer once we control for observable firm, industry, and unobserved host-country-specific effects.
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Long term appointment of central bankers: Costs and benefits
Axel Lindner
European Journal of Political Economy,
No. 4,
2000
Abstract
Why do independent central bank boards have a reputation for more moderate policy than do elected governments, even if the board's members have been appointed by the current or former government? This paper gives an explanation for the case of a political world with ‘zeitgeist shocks’ on the electorate's preferences. If the median position of preferences inside the board determines the monetary policy, a trade-off concerning member term length arises: a longer term entails more moderation, while enhancing the likelihood of detachment from contact to the electorate's current preferences.
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Reallocation of Competences between Local and Higher Levels of Government as so-called „Functional Reforms“: A Case of (De-) Centralization?
Martin T. W. Rosenfeld
Fiscal Decentralization,
1987
Abstract
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