Yes to Investments by Public Authorities for the Future! But Business Cycle will no Longer be Saved by it!
Hans-Ulrich Brautzsch, Brigitte Loose, Udo Ludwig
Wirtschaft im Wandel,
No. 3,
2009
Abstract
In order to mitigate the effects of the deep economic recession, the German federal government has adopted two economic stimulus packages to be applied in the period from 2009 to 2010. According to our estimations, these programs include investments amounting to 25.3 billion Euros mainly in infrastructure and education. We investigate the total effects of these investments on production and employment using a static input-output model. We find that the gross domestic product will increase by at most one percentage point, namely 0.4 points in 2009 and 0.7 points in 2010. This implies that approximately 400 000 jobs will be safeguarded. About one quarter of the effects will concern construction and business services respectively. For several reasons, our calculations constitute the upper bound to the expected effects. The increasing demand in construction could lead to significantly increasing prices. In light of the expected decline in production, the economic effects of the programs may appear to be low. Obviously, the strong decrease in external demand and its impact on the economy cannot be effectively combated by instruments of national economic policies.
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Competition between Financial Markets in Europe: What can be Expected from MiFID?
Hans Degryse
Financial Markets and Portfolio Management,
No. 1,
2009
Abstract
The Markets in Financial Instruments Directive (MiFID) could be the foundation of new trading platforms in Europe. This contribution employs insights from the theoretical and empirical literature to highlight some of the possible implications of MiFID. In particular, we argue that more competition will lead to more liquid markets, reflected in lower bid–ask spreads and greater depth. It will also lead to innovation in incumbent markets and stimulate the design of new trading platforms. MiFID has already introduced more competition, as evidenced by the startup of Instinet Chi-X, the announcement of new initiatives, including Project Turquoise and BATS, and the reactions of incumbent exchanges.
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Wie effektiv sind Technologie- und Gründerzentren in den Neuen Bundesländern?
Michael Schwartz
List Forum für Wirtschafts- und Finanzpolitik,
2008
Abstract
In Eastern Germany, since the beginning of the 1990s technology centers and business incubators are established by cities and municipalities to provide a favorable business environment for young and newly founded innovative firms. Right from the beginning, the effectiveness of these support facilities has been the subject of intense academic and policy discussions, but empirical evidence on the actual effectiveness of these centers is limited so far. Taking into account that the choice of the appropriate criteria for evaluations of the effectiveness of technology centers and business incubators is far from clear cut, this article focuses on three core indicators that are generally accepted as measures for effectiveness (incubation time, share of newly founded firms in the tenant portfolio and technological level of the supported firms), and analyses for five business incubators in East Germany whether they can be characterized as being effective policy instruments. A positive assessment of the five incubators’ effectiveness can be made with regard to average incubation time of tenant companies, as well as insofar the share of newly founded firms on all supported companies is concerned. However, deficiencies are found regarding the technological level of the incubator firms.
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Beseitigung struktureller Defizite mit der Gemeinschaftsaufgabe „Verbesserung der regionalen Wirtschaftsstruktur“ – Ein Vergleich der Strategien in den neuen Bundesländern
Mirko Titze
Raumforschung und Raumordnung,
2008
Abstract
The Joint Task “For the Improvement of the Regional Economic Structure” is one of the most important instruments for the “Reconstruction East”. Herein the federal states have an extensive flexibility to define their own kind of industrial policy. Due to their structural deficits this paper is focused on the federal states in East-Germany. A decrease in the budget constrains the governments to improve efficiency of subsidies. However, there is one way to solve this problem: change unselective government aid to regional as well as sectoral government aid. This paper shows that there is no federal state, which has applied this kind of policy forcefully.
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Agenda 2010: Neues unter Deutschlands Himmel?
Ulrich Blum
Wirtschaftsdienst,
No. 3,
2008
Abstract
The paper analyzes to what extent the reform of the German social security and welfare system, known as the “Hartz-IV-Reforms” under the “Agenda 2010”, has been successful. It is shown that the integration of welfare and social security payments increased efficiency as did prior deregulations of the labor market. However, the implementation was partly inefficient due to a misalignment between crucial instruments and incentive structure of individuals. This led to unforeseen expenditures that partly continue until today. Due to this inefficiency, parts of the reform lost its political acceptance. Furthermore, the article shows that many of these reforms had already been prepared intellectually by selected think tanks in the 90ies. The reforms are consistent with a consensus among scholars regarding the ability of the modern state to protect citizens from individual life risks. Finally, the article discusses the future agenda with respect to other important economic policy instruments beyond the integration of welfare and social security such as incentive structure in the established taxation system.
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Specialization as Strategy for Business Incubators: An Assessment of the Central German Multimedia Center
Michael Schwartz, Christoph Hornych
Technovation,
No. 7,
2008
Abstract
The literature on business incubators (BIs) mainly discusses findings of incubators that do not restrict themselves to specific sectors (diversified incubators). There is a strong disregard of the possible benefits arising from the concept of a sector-specialized business incubator (SBI), although this concept has become more important in recent years. In Germany, about 19% of the incubators can be characterized as being specialized. Since 1999, nearly one-third of all new BIs in Germany opened with a sector-specific focus. This study attempts to approach this research question by examining the advantages and deficiencies of this concept and to address them with empirical observations from an SBI in the city of Halle (Germany), which has an explicit sector-focus on the media industry (MI). We identify key benefits arising from such an incubator concept: (1) high quality premises and equipment, (2) improvement of service and consultancy offerings and (3) image effects for the location. We also find deficiencies of an SBI especially regarding internal networking activities and promotion of linkages to universities. Furthermore a negative working climate impedes interaction. This study offers implications for firms, incubator managers and local policy-makers who are concerned with the instrument of an SBI.
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Technologie- und Gründerzentren im Lichte von Diversifizierung versus Spezialisierung
Michael Schwartz, Christoph Hornych
IWH Discussion Papers,
No. 7,
2008
Abstract
In Germany, a growing tendency can be observed to focus business incubators (BIs) and technology centers and their respective support elements and processes as well as the selection criteria applied by the incubator management on firms from solely one sector or few but complementary sectors and their specific needs and requirements. These are called specialized business incubators (SBIs). Despite the increasing importance of specialization strategies of business incubators as local and regional policy instruments, there are no reliable empirical examinations of the specifics, and advantages in particular, of SBIs compared to more diversified BIs. On the basis of survey-data, that comprises responses from 161 actual firms incubated in 13 diversified BIs and 13 specialized BIs in Germany, this study investigates the mechanisms within the specific context of specialized BIs and their value-added contribution versus the more diversified incubation model. For the first time, this study provides large-scale empirical evidence concerning the effects of adopting a specialization strategy in the context of business incubation.
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Real Options of Private House Owners in the East German Housing Market – How Demolition Subsidies Affect Investment Prospects for Private House Owners
Dominik Weiß
Wirtschaft im Wandel,
No. 6,
2008
Abstract
The subsidies of the German urban renewal program “Stadtumbau Ost” are claimed mainly by communal and cooperative housing companies. The instruments do not fit very well for private proprietors that hold a great part of the older housing stock in central locations, for example in Wilhelminian style districts. Interim evaluation reports concerning the implementation of the “Stadtumbau” program show good results for big housing blocks, but constantly high vacancy rates in the inner city quarters. It becomes obvious that the political targets have not been achieved completely so far and that market forces limit the extensive restoration of historic buildings.
The opportunities, economic incentives and the decisions of landlords and house owners will be analyzed with a real option approach. A detailed view considers the different available forms of subsidies, examining its power to affect real estate values and to initiate politically desired urban transformations. It can be shown that the current forms of subsidies fail to promote investment of private house owners because of rising value expectations. Downgrading the building zones to lower density might reduce unrealistic expectations that were identified as a hurdle to invest. As a consequence from this consideration, municipalities should implement alternative urban development concepts and adjust the subsidy policy.
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Urban Renewal in Saxony: A Need for a more Problem-orientated Allocation of Subsidies!
Claus Michelsen
Wirtschaft im Wandel,
No. 2,
2008
Abstract
Currently, the political discussion of urban renewal in East Germany focuses more and more on new strategies to solve the problems of urban decline and vacancies on the housing market. Since 2001, the demolition of housing has been subsidized with approximately one billion Euros. Critics of this strategy argue that the continuation of demolition leads to a fragmentation of cities and a loss of urban functions. Therefore, they suggest to focus more on revitalization of residential quarters and to allocate more subsidies to improve neighbourhoods as well as residential amenities to lower housing vacancies.
This article argues that on the one hand, the overall housing vacancy-rates cannot be lowered with the current instruments of urban revitalization. Even though, there is a chance to attract citizens from the periphery of cities. This means to redistribute housing vacancies instead of an overall reduction. On the other hand, this strategy needs to be clearly focused on selected cities in which a potential of immigration exists. However, empirical results from Saxony suggest a different picture: The allocation of subsidies for urban revitalization shows no identifiable pattern. Therefore, the author proposes to refocus the policy of urban redevelopment.
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Strategien der neuen Bundesländer im Rahmen der Gemeinschaftsaufgabe „Verbesserung der regionalen Wirtschaftsstruktur“ – Ein Vergleich –
Mirko Titze
IWH Discussion Papers,
No. 14,
2007
Abstract
The Common Task “Improvement of Regional Economic Structure” is one of the most important instruments for the “Reconstruction East”. Herein the federal states have an extensive flexibility to define their own kind of industrial policy. Due to their structural deficits this paper is focused on the federal states in East-Germany. A decrease in the budget constrains the governments to improve efficiency of subsidies. However, there is one way to solve this problem: change unselective government aid to regional as well as sectoral government aid. This paper shows that there is only one federal state, which has applied this kind of policy: the federal state of Brandenburg.
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