Where enterprises lead, people follow? Links between migration and FDI in Germany
Claudia M. Buch, J. Kleinert, Farid Toubal
European Economic Review,
No. 8,
2006
Abstract
Standard neoclassical models of economic integration are based on the assumptions that capital and labor are substitutes and that the geography of factor market integration does not matter. Yet, these two assumptions are violated if agglomeration forces among factors from specific source countries are at work. Agglomeration implies that factors behave as complements and that the country of origin matters. This paper analyzes agglomeration between capital and labor empirically. We use state-level German data to answer the question whether and how migration and foreign direct investment (FDI) are linked. Stocks of inward FDI and of immigrants have similar determinants, and the geography of factor market integration matters. There are higher stocks of inward FDI in German states hosting a large foreign population from the same country of origin. This agglomeration effect is confined to higher-income source countries.
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What can a town achieve today? Integration, urban regimes, and the acceptance of models
Peter Franz
IWH Discussion Papers,
No. 56,
1997
Abstract
Since 1990, the date of German reunification, urban development and especially the recovery of inner cities in East Germany has been delayed by several factors including real estate restitution claims, inflexible preservation codes for historic buildings, and the shortage of stores for retailers. This blockade situation has resulted in the quick and intensified development of shopping centres as „inner city substitutes“ on the urban periphery. The combined effect of the factors preventing revitalisation strategies and the newly realised and practised potential for autonomous action by the authorities of smaller municipalities was a severe restriction for the governing capacities of the authorities of the larger cities. in regaining their governance capability city governments are dependent on urban groups joining and supporting public developmental strategies. In accordance with Stone (1993) and Stoker and Mossberger (1994) urban groups active in urban development policy can be described as urban regimes. In Germany three types of regimes can be differentiated. The cities differ with respect to the political strength and the forms of coalition and conflict between different urban regimes. Specific conditions in East Germany have led to a special regime constellation with a powerful „conservation regime“ on the one hand and a vivid „globalisation regime“ on the other hand. This conflicting constellation results in a developmental blockade. The hypothesis is that a third regime type, the „local alliance“, is missing and still has to be created by practices such as city marketing and city management. Only when this regime building process has advanced will new constellations of political coalitions and compromise become possible and be able to reduce governance problems of city government in the long run.
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