The Economic Geography of Offshoring.
Ulrich Blum
Offshoring Journal,
No. 1,
2007
Abstract
Offshoring is defined as the moving of entrepreneurial functions or business functions to other places, mostly third countries, or ordering the respective services from an independent company in a third country. Today, offshoring activities are mostly interesting if they relate to the service, especially those parts in which digital processes play an important role. Also activities with low transaction costs and advantages of locations are best suited for offshoring. But the question of what to outsource and what to keep in-house is also related to the limits of the firm and the limits of a legal system.
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The East German Cement Cartel: Cartel Efficiency and Policy after Economic Transformation
Ulrich Blum
Eastern Economic Review,
2007
Abstract
In 2003 the German Antitrust Commission (GAC) proved the existence of a cartel in the German cement industry. The German cement producers involved in the case were fined € 661 million for having established quotas to extract additional rents. One of the main centers of this cartel was East Germany, where the East German Cement Combine with its giant facilities had been sold, in the early 1990s, to four large producers by Treuhand in the process of privatizing the economy. Only in respect to in this market did all defendants concede having had a part in forming a cartel.
In this paper, we challenge the argument of excess revenue that the GAC puts forward for the East German market. We argue that legal evidence does not necessarily translate into economic evidence. We show that demand for cement is realized in geographical and, to a more limited extent, in product space. Thus, in the absence of cartels we would expect monopolistic competition to prevail. We argue that any transition in the market regime, from the cartel to the post cartel period, must be traceable in the individual firm’s demand function which differs from the clients’ demand function because of costs for spatial and product differentiation. Within the framework of an econometric model, we cannot identify any structural changes in demand. Most likely, imports from Poland and the Czech Republic were dumped into the East German market and some medium sized producers were responsible for the cartel never working.
Finally the paper shows how difficult it is to generate competition in certain industries even under the umbrella of a well-established market economy, i.e. that of West Germany, and that the openness of the economy, i.e. trans-border shipments, are decisive.
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Book Review: Philippe Burger: Sustainable Fiscal Policy and Economic Stability, 2003
Tobias Knedlik
Africa – Commodity Dependence, Resource Curse and Export Diversification, African Development Perspectives Yearbook 2007, No. 12,
2007
Abstract
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Einkommenssicherung, Arbeitsmarktpolitik und Beschäftigung in Ostdeutschland
Herbert S. Buscher
Wirtschaft im Wandel,
No. 6,
2007
Abstract
The paper presents three approaches currently discussed, which might be useful attempts to protect income not to fall below a certain threshold. These concepts are either useful in the case of unemployment or for employees in the low wage sector of the economy. The approaches discussed have recently been published or have been discussed in the public. These are a minimum wage concept, a special variant of subsidized wages as favoured by the German Council of Economic Experts, and finally a workfare approach as suggested by the IZA Bonn. After briefly discussing the estimated employment effects of the various approaches, the paper addresses the question how the East German labour market will be affected by these measures.
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Demographic development and its economic consequences
Joachim Ragnitz, Lutz Schneider
Wirtschaft im Wandel,
No. 6,
2007
Abstract
Within the next decades, East Germany will continue to face strong demographic challenges. In addition to shrinking, the ageing of population and labour force will more and more affect the economic development of the new Länder. Against this background, the question rises whether the shift of workforce age structure will influence growth and innovation potential as well as structural change. The IWH recently has focused on this topic widely ignored by the research literature so far. On the basis of selected methods and data, the economic impact of workforce ageing was empirically evaluated. The first issue concerns the impact of age on productivity. Based on two separate empirical investigations, the conclusion can be drawn that above a certain stage, age diminishes productivity. But higher levels of experience might partly compensate for this reduction. Secondly, the innovation effects of ageing have been analyzed. Again, significant age effects arise. Employees at the age of about 40 years turn out to be the most innovative part of the workforce. Furthermore, the analysis shows that engineers are particularly subject to age effects. A third study sheds light on the challenging consequences of ageing on entrepreneurship potential. Hence, independently of the increasing problem of skill shortages, ageing itself will unfavourably affect growth, innovation and structural change. Though political options are limited due to the more or less fixed demographic trends, appropriate instruments regarding economic, family and education policy might lower the identified age effects.
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Effectiveness of Competition Law: A Panel Data Analysis
Franz Kronthaler
IWH Discussion Papers,
No. 7,
2007
Abstract
The paper explores what macroeconomic factors can tell us about the effectiveness of recently enacted national competition laws. Qualitative evidence suggests that numerous countries fall short in implementing competition law. Furthermore, there seems to be significant differences between countries. To examine what factors might contribute to the explanation of effectiveness of competition law panel regression analysis is used. The results indicate that the level of economic development matters, however the institutional learning curve is also relevant. Furthermore, larger countries should be more concerned with competition advocacy activities than smaller countries and it seems to be the case that the problem of capture of competition law is serious in countries with high levels of corruption.
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Economic 'Clusters' in East Germany: Evidence on the Location and the Characteristics of Spatially Concentrated Industries
Martin T. W. Rosenfeld, Peter Franz, Gerhard Heimpold
Post-Communist Economies,
No. 1,
2007
Abstract
The contribution provides empirical findings, which regions in East Germany show spatially concentrated industries possessing ”cluster” qualities. The latter are regarded as being existent if spatially concentrated industries coincide with networking activities and innovative competences. The findings reveal that spatially concentrated industries possessing the qualities sketched are relatively rare, and they are, if existent, primarily located in the East German agglomerated spaces. This in mind, the article draws the conclusion, that spreading regional policy schemes by the “watering can principle” should be avoided. Instead, the resources should be concentrated on locations where spatially concentrated industries are existent. Networks and innovative competences should be strengthened there.
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Development aid and economic freedom: Are there interrelations?
Tobias Knedlik, Franz Kronthaler
Wirtschaft im Wandel,
No. 11,
2006
Abstract
Development aid attracts currently high public attention, e.g. because of the Millennium Development Goals of the United Nations. Thereby so-called weak factors gain importance in the debate of development policy. In this regard the establishing of enabling conditions, which allow and support economic activities is central. Economic freedom is an important concept in the discussion. The academic literature clearly suggests a positive relation between economic freedom and economic development. This is the motivation to analyze the impact of development aid on economic freedom.
This contribution analysis this impact of two forms of development aid (conditional and overall aid). In contrast to expectations the results show a positive impact of overall aid and a negative impact of conditional aid on economic freedom. Economic policy should consider the positive effect of overall aid and adjust aid conditions according to domestic requirements in recipient countries to avoid negative effects on economic freedom.
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Interregional equalization policy in focus: Donor regions and beneficiary regions and their economic performance
Gerhard Heimpold, Peter Franz
Wirtschaft im Wandel,
No. 11,
2006
Abstract
The future of the interregional equalization policy in Germany is discussed intensively at present. While in the past the interest of equalization policy was focussed primarily on the regions which benefit from interregional equalization policy (beneficiary regions) and the effects obtained there, recently the view is directed also toward the regions which bear the fiscal burden of the equalisation policy (donor regions). Concerning the donor regions, a fear of growth-absorbing withdrawal effects exists, which gives reason in view of declining economic growth rates on the national level to think about the future of interregional equalization policy. The IWH contributed to this debate together with two project partners by an investigation, which was accomplished on behalf of the Federal Office for Building and Regional Planning. The following findings will show the economic performance of the donor regions (exclusively West German regions) and of the beneficiary regions (all East German regions and a few West German regions) and their changing economic growth patterns. Concerning the level of economic performance, measured by means of the gross domestic product (GDP) per capita, as expected, the donor regions, consisting of West German regions, in the period 1992-2003 altogether show an above average GDP per capita. In contrast, the beneficiary regions, both the East German and (less strongly) the West German show a GDP per capita below average. Concerning the development of the economic performance, which was measured on the basis of the relative GDP per capita (GDP per capita of the region concerned in relation to the national average), the East German beneficiary regions could catch up in the first period (1992-1998) strongly. This catching up process, however, clearly slowed down in the second period 1998-2003. Like a mirror-image the lead of the donor regions regarding GDP per capita in relation to the national average became smaller. But after 1998 many West German donor regions regained their growth dynamics. Additionally the contributions of the regions to the absolute increase of the GDP in the period 1998-2003 were investigated: 30 of 271 regions have a share of around 50% in the overall GDP increase, 28 of them located in West Germany, and 21 of them donor regions. This in mind, the policy should further provide and secure favourable development conditions for those regions, which contribute at most to the increase of the overall economic performance and thus create the economic base for the interregional equalization policy.
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Die Gestaltung der Wirtschaftsstruktur durch das Land Brandenburg - Eine kritische Analyse der Subventionszahlungen für die CargoLifter AG
Mirko Titze
Forum der Forschung. Wissenschaftsmagazin der Brandenburgischen Technischen Universität Cottbus,
No. 17,
2004
Abstract
The Government of the State of Brandenburg subsidised the company CargoLifter AG on the basis of the „new industrial policy“. Following this policy the government supports individually selected industries or companies. The „new industrial policy“ is supported by the strategic trade policy, which states that subsidising domestic companies in incomplete markets with declining average costs and high entry barriers can increase the welfare level of a particular region. The following article provides an analysis whether in the case of Cargo-Lifter the Government of the State of Brandenburg pursued an effective strategic trade policy. Moreover the article investigates particular problems of the strategic trade policy.
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