Structurally Weak Regions as Locations for the Information and Communications Industry - The Example of Saxony-Anhalt
Rupert Kawka
Wirtschaft im Wandel,
No. 3,
2003
Abstract
The article compares the IT-firms in Sachsen-Anhalt with the benchmark region Munich, as latter is regarded as the most advanced German area concerning this branch. It is shown that the firms in Sachsen-Anhalt are much smaller in terms of employees and returns than the companies in Munich, but they do not only act on regional markets, but also they have customers in the whole of Germany. Nevertheless, the firms in Munich supply international markets to a larger extent.
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Capital for work: The JobFloater starts in November 2002
Herbert Buscher
Wirtschaft im Wandel,
No. 13,
2002
Abstract
A critical review of some of the recommendations made by the Hartz commission, in particular the JobFloater module The author argues that this concept will not contribute to a visible improvement of the labor market situation unless further reforms are launched.
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Investment Behaviour of Financially Constrained Multinational Corporations: Consequences for the International Transmission of Business Cycle Fluctuations
Diemo Dietrich
IWH Discussion Papers,
No. 165,
2002
Abstract
The paper investigates the investment decision of a financially constrained multinational
corporation (MNC) planning investment projects both at home and in a developing
country. The collateral values of the projects diverge because of country specific
transactions costs so that the willingness of banks to grant a loan depends not only on
the MNCs financial wealth but also on the share of FDI in total investment. It is shown
that i) variations in the MNCs financial standing affects FDI stronger than domestic
investment, ii) FDI is likely to decrease following a macroeconomic shock to the MNC
parent, and iii) domestic investment is likely to increase following a macroeconomic
shock to the MNC affiliate.
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Bank-Firm Relationships and International Banking Markets
Hans Degryse, Steven Ongena
International Journal of the Economics of Business,
No. 3,
2002
Abstract
This paper reviews how long-term relationships between firms and banks shape the structure and integration of banking markets worldwide. Bank relationships arise to span informational asymmetries that are endemic in financial markets. Firm-bank relationships not only entail specific benefits and costs for both the engaged firms and banks, but also directly affect the structure of banking markets. In particular, the sunk cost of screening and monitoring activities and the 'informational capital' collected by the incumbent banks may act as a barrier to entry. The intensity of the existing firm-bank relationships will determine the height of this barrier and shape the structure of international banking markets. For example, in Scandinavia where firms maintain few and strong relationships, foreign banks may only be able to enter successfully through mergers and acquisitions. On the other hand, Southern European firms maintain many bank relationships. Therefore, banks may consider entering Southern European banking markets through direct investment.
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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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Prospects for 2002: Waiting for the cyclical change
Wirtschaft im Wandel,
No. 1,
2002
Abstract
This article updates the complete analysis and forecast of the economic developments in the World and Germany in particular for 2002, as published in Summer. After six quarters of downturn, the beginning of 2002 does not show signs of a revival in economic activity. Neither internal nor external forces are currently strong enough to reverse the underlying downward trend. It is assumed that by spring time the recession in the USA will have faded. Resulting is a stimulus for the World Economy. This initiating impulse will revive production in Germany and the Euro Area, which by the second half of 2002 will gain pace. The increase in exports, as induced by the upturn in the US-Economy will positively affect domestic demand. With the usual time lag this development will also strengthen the job market. Monetary Policy will remain expansive and begins to show its full effect. Fiscal Policy, on the other hand, due to the need for consolidation, will remain restrictive.
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Rating Agency Actions and the Pricing of Debt and Equity of European Banks: What Can we Infer About Private Sector Monitoring of Bank Soundness?
Reint E. Gropp, A. J. Richards
Economic Notes,
No. 3,
2001
Abstract
The recent consultative papers by the Basel Committee on Banking Supervision has raised the possibility of an explicit role for external rating agencies in the assessment of the credit risk of banks’ assets, including interbank claims. Any judgement on the merits of this proposal calls for an assessment of the information contained in credit ratings and its relationship to other publicly available information on the financial health of banks and borrowers. We assess this issue via an event study of rating change announcements by leading international rating agencies, focusing on rating changes for European banks for which data on bond and equity prices are available. We find little evidence of announcement effects on bond prices, which may reflect the lack of liquidity in bond markets in Europe during much of our sample period. For equity prices, we find strong effects of ratings changes, although some of our results may suffer from contamination by contemporaneous news events. We also test for pre-announcement and post-announcement effects, but find little evidence of either. Overall, our results suggest that ratings agencies may perform a useful role in summarizing and obtaining non-public information on banks and that monitoring of banks’ risk through bond holders appears to be relatively limited in Europe. The relatively weak monitoring by bondholders casts some doubt on the effectiveness of a subordinated debt requirement as a supervisory tool in the European context, at least until bond markets are more developed.
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Innovative and international – with local personnel: Results of a survey of New Economy enterprises in Saxony and Thuringia
Cornelia Lang, Ralf Müller
Wirtschaft im Wandel,
No. 12,
2001
Abstract
BT and IT firms in Saxony and Thuringia were surveyed about their recruiting activities, the scope of their product markets and their R&D activities. The major findings are: The majority of firms engage in product and process development, their product markets are not predominantly local markets, and that they recruit their labor force in the local labor market. The latter fact is explained by the existence of the modern infrastructure in higher learning and research in the new Länder (which formerly constituted the GDR). Consequently the firms are optimistic to be also able to attract highly qualified personnel in the future.The recently enacted law, which grants a number of work permits for highly qualified jobs (green card) is therefore of no great significance to these firms.
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On the stability of Hungarian banks
Werner Gnoth
Wirtschaft im Wandel,
No. 9,
2001
Abstract
The participation of foreign capital, mainly of foreign banks in privatization of Hungarian banks has been decisive for reaching of competitiveness and stability. But the process of transformation of banks is not yet over. Many banks have not yet succeeded to compensate the revenue shortfalls and higher costs by a bigger variety of transactions, especially expanding their off-balance-sheet activities. Merges could also help to solidify stability and international competitiveness of rhe banking system. Analyzing several indicators of Hungarian banking system, we found no sign of crisis. Comparing significant indicators of the banking systems between Hungary, Poland and Czech Republic, we found the Hungarian banking system as having been more successful.
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Overall economic production in East Germany grows slightly despite international cyclical weakness
Hans-Ulrich Brautzsch, Brigitte Loose, Udo Ludwig
Wirtschaft im Wandel,
No. 7,
2001
Abstract
The article deals with the economic development in East Germany up to the
year 2002. It is shown the strong influence of the capacity adjustments in construction
and state sectors on the economic growth. Moreover the article analyzes
in detail the chances and problems of the sectors “manufacturing“ and “construction“ with productivity and unit labor costs playing the central part in restoring their competetiveness.
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