Technological capability of foreign and West German investors in East Germany
Jutta Günther
IWH Discussion Papers,
No. 189,
2004
Abstract
Foreign direct investment (FDI) plays an important role for countries or regions in the process of economic catching-up since it is assumed – among other things – that FDI brings in new production technology and knowledge. This paper gives an overview about the development of FDI in East Germany based on official data provided by the Federal Bank of Germany. The investigation also includes a comparison of FDI in East Germany to Central East European countries. But the main focus of the paper is an analysis of the technological capability comparing majority foreign and West German owned firms to majority East German owned firms. It shows that foreign and West German subsidiaries in East Germany are indeed characterized by superior technological capability with respect to all indicators looked at (product innovation, research & development, organizational changes etc.).
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The Reform of Local Public Services of General Interest in Europe
Peter Haug, Martin T. W. Rosenfeld
Applied Economics Quarterly (Supplement),
2004
Abstract
The benefits of a reduced supply of local public services may more than outweigh the supposed welfare losses. This was suggested by various theoretical and empirical investigations in many fields of economics during the last decades. Nevertheless, local and national politicians, trade unionists, charities, and other lobbyists have succeeded in preventing further liberalisation of “services of general interest” in Europe. This article examines why these preserve agents have been and are still successful. The analysis is based on an institutional economic approach. Several policy measures and institutional changes are suggested to either reduce influence of preserve agents or to compensate them for their losses.
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Opportunities and Risks for Regional Development in Former East German Brown Coal Mining Areas: The Case of the “Geiseltal” Mining Area in Saxony-Anhalt
Peter Franz
Wirtschaft im Wandel,
No. 11,
2003
Abstract
The rehabilitation of former brown coal open mining locations represents an important section of the economic and ecological restructuring process in East Germany, taking place since 1990. The recent progress in rehabilitation has led to large amounts of newly disposable space and thus expands the opportunities for regional development, especially with respect to tourism. But the possible positive effects are at risk because of diverse obstacles. In the case of the former open mining location of the “Geiseltal” in the south of Saxony-Anhalt such obstacles show up in form of a strong identification of the residents with the tradition of mining industry, in form of the expansive interests of nature protection organizations, and in form of inadequate organisational structures of the local public administration. In the case of a tourism-oriented development strategy risks arise concerning the actual duration of the remaining recultivation process and concerning the competition with locations with similar development targets.
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EU Eastern Enlargement and Structural Change: Specialization Patterns in Accession Countries and Economic Dynamics in the Single Market
Albrecht Kauffmann, P. J. J. Welfens, A. Jungmittag, C. Schumann
Diskussionsbeiträge des Europäischen Instituts für Internationale Wirtschaftsbeziehungen (EIIW), Bergische Universität Wuppertal, Nr. 106,
No. 106,
2003
Abstract
This paper analyses key issues of structural change and specialization patterns in the economies of an enlarged European Union. In all transition countries we observe a shift from the agricultural and industrial sector towards the service sector in terms of employment and productivity; however, in some countries a reindustrialisation drives is observed in a late transition stage. While some countries namely the Czech Republic, Hungary, Slovakia, Poland, Estonia and Slovenia, have improved their productivity especially in medium-technology-intensive industries and may advance on the technological ladder, others remain unchanged and seem to get locked in labour-intensive industrial sectors. In the context of EU-enlargement, we expect trade creation – going along with a rise of intra-industry trade – and higher FDI-activities. Countries will have to adjust along the logic of comparative advantage, however, technological upgrading and human capital formation are fields in which government can stimulate the direction of comparative advantage. According to the Gerschenkron-hypothesis the accession countries have an “advantage of backwardness. Since accession countries have a low R&D-GDP ratio in the early transition stage rising government expenditures on research and development plus higher education is crucial. We expect the EU-15 countries in general to benefit from enlargement but gains will be asymmetric across countries: economic geography matters. Austria, Germany, the Scandinavian countries, the Netherlands, Italy and France are likely to profit more than the other members of EU-15. Germany and Austria additionally play a particularly crucial role as origins of FDI. Future research should focus on the speed and the scope of structural adjustment.
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New industries in Eastern Germany - The state of the development of modern biotechnologies in Saxony-Anhalt
Walter Komar
Wirtschaft im Wandel,
No. 16,
2002
Abstract
East German regions are able to increase their economics and innovation potential, if they orient themselves on technologies, which release important growth effects. Such growth branch is the modern biotechnology. In this paper the development and the location factors of the biotechnology industry in Saxonia-Anhalt are analyzed and compared with the bio region Munich, which rank to among the best bio regions in Germany. The analysis shows that the development of the modern biotechnology in East German regions can be favoured, if the location factors are improved.
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Possible effects of demographic change - An overview
Gunter Steinmann, Olaf Fuchs, Sven Tagge
Wirtschaft im Wandel,
No. 15,
2002
Abstract
One of the more important influences shaping the future economic conditions of the highly industrialized countries is the decline and aging of their population. The article is a comprehensive survey of the impact of this development on key economic variables and the institutions of the welfare state. While the overall consequence of the aging process on productivity growth is more likely to be negative, there are also some offsetting forces like the increase in the capital intensity. The institutions of the welfare state, which are based on intergenerational transfers, will have to be reformed, in order to bring them in line with the demographic process. The prediction of a decrease in the rate of unemployment as a consequence of a declining labor force is according to our analysis not justified.
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Recent Developments and Risks in the Euro Area Banking Sector
Reint E. Gropp, Jukka M. Vesala
ECB Monthly Bulletin,
2002
Abstract
This article provides an overview of euro area banks’ exposure to risk and examines the effects of the cyclical downturn in 2001. It describes the extent to which euro area banks’ risk profile has changed as a result of recent structural developments, such as an increase in investment banking, mergers, securitisation and more sophisticated risk management techniques. The article stresses that the environment in which banks operated in 2001 was fairly complex due to the relatively weak economic performance of all major economies as well as the events of 11 September in the United States. It evaluates the effects of these adverse circumstances on banks’ stability and overall performance. The article provides bank balance sheet information as well as financial market prices, arguing that the latter may be useful when assessing the soundness of the banking sector in a forward-looking manner. It concludes with a review of the overall stability of euro area banks, pointing to robustness in the face of the adverse developments in 2001 and the somewhat improved forward-looking indicators of banks’ financial strength in early 2002.
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Germany s dependence on the economic situation in the U.S. is less crucial than generally assumed
Klaus Weyerstraß
Wirtschaft im Wandel,
No. 6,
2002
Abstract
In the context of the recent cyclical downturn in Germany it has often been argued that Germany depends more than other European countries on international economic developments. In this article it is investigated whether empirical support can be found for this proposition. Moreover, it is explored whether this relation has changed over time. For this purpose, vector autoregressive (VAR) models are applied to the output gaps of different economies.
It is shown that in the seventies and eighties, the transmission of business cycle shocks was more pronounced to Germany than to the other EU countries. Since the middle of the nineties, no such differences can be detected. Furthermore, since the middle of the nineties, the effects of shocks from abroad on the German business cycle have been significantly more short-lived than before.
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Current Economic Situation: Cyclical change is immediately ahead
Wirtschaft im Wandel,
No. 4,
2002
Abstract
Das IWH nimmt die Veröffentlichung der gesamtwirtschaftlichen Ergebnisse für 2001 durch das Statistische Bundesamt zum Anlass, seine Konjunkturprognose für Deutschland und für Ostdeutschland vom Dezember 2001 für das laufende Jahr zu aktualisieren. Zugleich gibt es eine erste Vorausschätzung für das Jahr 2003 ab.
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Macroeconomic Modelling of the German Economy in the Framework of Euroland
Rüdiger Pohl, Heinz P. Galler
Schriften des IWH,
No. 11,
2002
Abstract
An attempt to develop a new macroeconometric model for Germany is confronted with several questions that range from the general rationality of such an approach to specific problems of an appropriate model structure. One important aspect of this discussion is the introduction of the Euro as a common currency of the European monetary union. This institutional change may result in structural breaks due to changing behavior of economic agents. In addition, the definition of the spatial unit that is appropriate for modelling becomes a problem. Additional problems come from the introduction of the European Single Market and the increasing international economic integration not only within the European union but also beyond its borders. And in the case of Germany, the unification of the West and the East demand special attention. Last but not least, the harmonization of national accounting for the member states of the European Union has to be dealt with. Thus, the introduction of the Euro as a common currency is just one problem besides others that must be addressed.
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