Why are East Germans not More Mobile? Analyzing the Impact of Social Ties on Regional Migration
Peter Bönisch, Lutz Schneider
Abstract
Individuals’ preferences in transition regions are still shaped by the former communist system. We test this ‘Communism legacy’ hypothesis by examining the impact of acculturation in a communist regime on social network participation and, as a consequence, on preferences for spatial mobility. We focus on the paradigmatic case of East Germany where mobility intentions seem to be substantially weaker than in the western part. Applying an IV ordered probit approach we firstly find that East German people acculturated in a Communist system are more invested in locally bounded informal social capital than West Germans. Secondly, we confirm that membership in such locally bounded social networks reduces the intention to move away. Thirdly, after controlling for the social network effect the mobility gap between East and West substantially reduces. Low spatial mobility of the eastern population, we conclude, is to an important part attributable to a social capital endowment characteristic to post-communist economies.
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Corporate Governance in the Multinational Enterprise: A Financial Contracting Perspective
Diemo Dietrich, Björn Jindra
International Business Review,
2010
Abstract
The aim of this paper is to bring economics-based finance research more into the focus of international business theory. On the basis of an analytical model that introduces financial constraints into incomplete contracting in an international vertical trade relationship, we propose an integrated framework that facilitates the study of the interdependencies between internalisation decisions, firm-internal allocations of control rights, and the debt capacity of firms. We argue that the financial constraint of an MNE and/or its supplier should be considered as an important determinant of internal governance structures, complementary to, and interacting with, institutional factors and proprietary knowledge.
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FDI and the National Innovation System - Evidence from Central and Eastern Europe
Jutta Günther, Björn Jindra, Johannes Stephan
D. Dyker (ed.), Network Dynamics in Emerging Regions of Europe, Imperial College Press,
2010
Abstract
The paper investigates strategic motives, technological activities and determinants of foreign investment enterprises’ embeddedness in post-transition economies (Eastern Germany and selected Central East European countries). The empirical study makes use of the IWH FDI micro database. Results of the descriptive analysis of investment motives show that market access dominates over efficiency seeking and other motives. The majority of investors are technologically active in the region as a whole, but countries differ in terms of performance. The probit model estimations show that firm specific characteristics, among them innovativeness and autonomy from parent company, are important determinants of foreign investment enterprises’ embeddedness.
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Still Divided by Transformation? Characteristic Features of the German Innovation System and the Barriers to Extending it to East Germany
Peter Franz
D. Dyker (ed.), Network Dynamics in Emerging Regions of Europe, Imperial College Press,
2010
Abstract
This paper concentrates on various factors preventing the establishment of an efficient regional innovation system in East Germany. For this purpose in the third section the strengths and weaknesses of the all German innovation system are elaborated by means of patent statistics. The fourth section describes the evolution of the East German innovation system after 1990, lists the most important supportive political measures, and discusses several reasons for deficits in innovative performance. The fifth section concludes and presents suggestions for political intervention.
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The Attractiveness of East Germany as Investment Location for Multinational Enterprises (MNEs)
Andrea Gauselmann, Björn Jindra
Wirtschaft im Wandel,
No. 6,
2010
Abstract
The article analyses the general motives of MNEs for investment in East Germany as well as the quality of selected locational factors in East Germany from multinational affiliates’ point of view. In contrast to existing studies for East Germany the article dedicates particular attention to the role of MNEs’ heterogeneity. The research draws from the third survey of the IWH FDI-Micro database in 2009, which offers a representative sample of multinational affiliates of the East German economy. The results show a fundamental shift in the relative importance of investment motives during the transition process of East Germany. Since the mid 1990s East Germany attracts increasingly investors that target economies of scope of local technological advantage rather than low-cost advantages of local production factors as the case in the early transition period. It can be demonstrated that the investment motives depends on the country of origin, the type and timing of market entry as well as the sector of the multinational affiliate. Amongst the given locational factors affiliates value the quality of the socio-cultural context highest. This group of soft factors is followed by locational aspects related the potential for technological cooperation, the availability of labour, and finally the extent of fiscal and financial incentives. There exist significant differences in the judgment about quality of different locational aspects depending on the country of origin and the underlying investment motive. Finally the article identifies possible policy measures in the area of skilled labour, technology and investment policy in order to sustain the attractiveness of East Germany as investment location in the future.
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Urban Development by Protecting Historic Buildings? An Analysis of Incentives and Regulations in Heritage Conservation
Peter Franz
Wirtschaft im Wandel,
No. 6,
2010
Abstract
Regulations in heritage conservation play an important role in the redevelopment processes of East German cities. Numerous cities dispose of built cultural heritage still lending the cityscapes its character. As a reaction to the neglect of this cultural heritage during the GDR regime the East German Länder have enacted relatively restrictive heritage conservation laws. In addition to this the federal program “Städtebaulicher Denkmalschutz” was started in 1991 especially for the East German cities. In many cities activities for and investment in historic buildings have led to attractive urban centers. On the other side indicators become visible that an exaggerated heritage protection policy can turn out to be an obstacle for urban development. This paper takes an economic perspective on the topic of built heritage protection. In addition to this it contains a systematic overview over the policy arena, involving national and sub-national levels, actors and regulations. The financing of built heritage protection and recognizable intended and not intended effects of its measures are further topics of the paper. The results show that in East Germany a higher proportion of buildings is listed as in West Germany. The same is true when the public expenditures per head for heritage protection are compared. The analysis suffers from difficulties in assessing an optimal state of built heritage protection; a fact that signals further need in specific research.
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The Emergence of Wage Coordination in the Central Western European Metal Sector and its Relationship to European Economic Policy
Vera Glassner, Toralf Pusch
Abstract
In the European Monetary Union the transnational coordination of collective wage bargaining has acquired increased importance on the trade union agenda. The metal sector has been at the forefront of these developments. This paper addresses the issue of crossborder coordination of wage setting in the metal sector in the central western European region, that is, in Germany, the Netherlands and Belgium, where coordination practices have become firmly established in comparison to other sectors. When testing the interaction of wage developments in the metal sector of these three countries, relevant macroeconomic (inflation and labour productivity) and sector-related variables (employment, export-dependence) are considered with reference to the wage policy guidelines of the European Commission and the European Metalworkers’ Federation. Empirical evidence can be found for a wage coordination effect in the form of increasing compliance with the wage policy guidelines of the European Metalworkers’ Federation. The evidence for compliance with the stability-oriented wage guideline of the European Commission is weaker.
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Going Public to Acquire? The Acquisition Motive in IPOs
Ugur Celikyurt, Merih Sevilir, Anil Shivdasani
Journal of Financial Economics,
No. 3,
2010
Abstract
Newly public firms make acquisitions at a torrid pace. Their large acquisition appetites reflect the concentration of initial public offerings (IPOs) in mergers and acquisitions-(M&A-) intensive industries, but acquisitions by IPO firms also outpace those by mature firms in the same industry. IPO firms' acquisition activity is fueled by the initial capital infusion at the IPO and through the creation of an acquisition currency used to raise capital for both cash- and stock-financed acquisitions along with debt issuance subsequent to the IPO. IPO firms play a bigger role in the M&A process by participating as acquirers than they do as takeover targets, and acquisitions are as important to their growth as research and development (R&D) and capital expenditures (CAPEX). The pattern of acquisitions following an IPO shapes the evolution of ownership structure of newly public firms.
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