East German Innovation System attractive for Foreign Investors
Jutta Günther, Björn Jindra, Johannes Stephan
Wirtschaft im Wandel,
No. 1,
2008
Abstract
Foreign direct investment (FDI) plays an important role in the catching-up process of East Germany due to direct employment- and demand related effects. However, this article takes a technological perspective on FDI in East Germany. It considers technological activities of foreign investors (R&D and innovation) and asks to what extent these are integrated into the East German innovation system. In other words, do foreign investors interact technologically with domestic enterprises and scientific institutions? So far, there seems to be a striking absence of empirical evidence on this issue. The basis for our analysis is recent data from a representative survey of foreign direct investors in East German manufacturing completed in 2007. The findings show that on average foreign investors are more R&D and innovation intensive compared to the total of East German manufacturing. In addition, their technological activities are by no means isolated from the East German innovation system. Foreign subsidiaries seem to benefit from East German customers, suppliers and especially scientific institutions with regard to locally conducted R&D and innovation. Contrary to existing assumptions the East German innovation system seems to be particularly attractive for the most technologically active foreign subsidiaries. This could constitute a major locational advantage for FDI in East Germany over Central and East Europe. However, the technologically active foreign investors believe that only East German suppliers are able to benefit from their technological cooperation. The same cannot be said about East German customers or competitors. Thus, the potential for technological externalities from FDI in East Germany seems still to be limited.
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Transport Costs and the Size of Cities: The Case of Russia
Albrecht Kauffmann
Volkswirtschaftliche Diskussionsbeiträge der Wirtschafts- und Sozialwissenschaftlichen Fakultät, Universität Potsdam, Nr. 93,
No. 93,
2007
Abstract
Real costs of freight transportation have strong increased in Russia particularly during the period of price liberalization 1992–93. This paper investigates possible connections between rising transport costs and the evolution of the size structure of the system of cities in the Russian Federation and its federal subjects. Empirical findings suggest that under conditions of a closed system agglomeration processes according to the predictions of the model of Tabuchi et al. (2005) would have taken place especially in the periphere regions of the North and Far East.
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Market Follows Standards
Ulrich Blum
Wirtschaft im Wandel,
No. 10,
2007
Abstract
Standards are an important part of the codified knowledge of a society. In contrast to industry standards, formal standards are created in a consensus-based procedure open to all interested parties. Only if an economic interest for application exists will formal standards be produced. Interested parties have to shoulder participation costs themselves, which enforces economic interest. Up to a certain extent, governments also trigger and finance formal standardisation processes through the new approach, which creates a framework that is filled by private activity. Standards stand at the end of intellectual property rights if the totality of the value chain of knowledge production is looked at. One important aspect is their accessibility and the inclusion of all necessary intellectual property rights, especially patents, at reasonable prices. Conversely, consortia may exclude groups from the use of their standards. By preventing the licensing of those patents included in a standard, they can effectively block market entry. Thus, “successful” standards often face antitrust problems. Formal standards reduce costs of production through economies of scale, economies of scope and network-economies. Goods and processes that are standardized signal quality, the inclusion of high technological standards and permanent presence in the markets, which again accelerates market dissemination. Firms face a dilemma: On the one hand, the penetration of a markets with industry standards offers potentials for high profits; on the other hand, this has to be balanced against the risk of failure, especially if clients are hesitant because they do not know which standard will be successful in the end. Formal standards create and stabilize trust markets. This is especially true in the area of globalisation. Europe, which has to face an enormous competition in the international knowledge economy, needs an institutionally efficient approach to formal standardisation. This contribution addresses future problems of the European standardisation that have been developed within the framework of a working group of the European Standardisation Organisation called Future Landscape of European Standardisation (FLES).
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Structural Policy in East Germany – A Discussion about the Common Task “Improvement of Regional Economic Structure“
Mirko Titze
Wirtschaft im Wandel,
No. 10,
2007
Abstract
After the reunification – more than ten years ago – the convergence process in the eastern German regions has started. Unfortunately, the convergence process has decelerated since 1995. For this reason, economists and politicians are discussing the kind of government aid, which has been applied since the early nineties. The paper deals with the Common Task “Improvement of Regional Economic Structure“ (Gemeinschaftsaufgabe “Verbesserung der regionalen Wirtschaftsstruktur“). It is one of the most important instruments for the “Reconstruction East“. Empirical studies have shown that this instrument has led to an additional growth impulse. However, for the last ten years the budget of the Common Task has decreased. Under the restriction of scarce financial resources the governments of the federal states have to adjust their regional programmes. Economists and politicians dispute to change unselective into selective (regional and sectoral) government aid. The article shows that in particular the Federal State of Brandenburg as well as the Free State of Saxony are focusing the Common Task on specific industrial sectors and certain regions.
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Innovations as driving force of the knowledge society – concepts and contemporary theoretical approaches
Jutta Günther, Björn Jindra
Wirtschaft im Wandel,
No. 9,
2007
Abstract
In response to the question what secures Europe’s future competitiveness, it is often in the context of “knowledge society” referred to location advantages for research and development (R&D), innovation and knowledge. Respective point of view is not only represented by decision makers of high-duty industrial countries, but also by so called catching up economies in Central and Eastern Europe as well as Asia. The present article deals against the background of current innovation theoretic approaches with the question of what indeed constitutes the abstract notion of the knowledge society, which actors play a role and how R&D and innovation are geographically distributed. Systemic approaches are outlined, which place emphasis on the relation among different knowledge generating actors, in particular among science and economy. In effort to elucidate the geographical distribution of R&D and innovation the authors refer to the regional economic theory, which constitute the reasons why such processes are marked by spatial concentration. Thereby, the hypotheses are competing in associating the spatial concentration with either sectoral specialization or diversification. The article shows the domination of multinational companies of research and development (R&D) in the private sector and that these businesses connect regional centers of innovations beyond national borders. Based on the theory of technological accumulation and internationalization of companies, the globalization of R&D and innovation processes are explained. Thereby, it must be recognized that a hierarchy of regional innovation systems is emerging in which the disparities are increasing both at home and abroad.
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Demographischer Wandel und Maßnahmen zum Umbau der kommunalen Infrastruktur - Eine Bestandsaufnahme am Beispiel ausgewählter Städte des Landes Sachsen-Anhalt
Martin T. W. Rosenfeld
Umdenken - Umplanen - Umbauen, Stadt- und Regionalentwicklung in Sachsen, Sachsen-Anhalt und Thüringen unter Schrumpfungsbedingungen,
2007
Abstract
The article presents the results of an empirical investigation into urban reconstruction measures of selected East German cities in the field of infrastructure. Due to the general demographic trend of a shrinking population, it has been claimed that urban infrastructure has to be deconstructed or reconstructed, in response to the shrinking process. The article shows that (up to the year 2005) in all cities measures for an expanding infrastructure were dominant; only in the fields of schools, children’s day-care and water supplies, the cities had already started measures to reduce the existing infrastructure.
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asset price inflation
Tobias Knedlik, A. Knorr
Systeme monetärer Steuerung - Analyse und Vergleich geldpolitischer Strategien - Schriften zu Ordnungsfragen der Wirtschaft, Band 86,
No. 86,
2007
Abstract
Most of the influential central banks managed to bring inflation down to a sustainable path in the last two decades. However, during the same time asset prices increased significantly. From the perspective of economic policy, this development might constitute a problem in the case that price increases are not due to changes in fundamentals but are of a speculative nature. During the current past the number of asset price bubbles increased. The aim of this contribution is to analyze policy options with regard to asset price inflation. We identify the relevant markets, discuss their specific price mechanisms, discuss transmission mechanisms, and the usefulness of monetary policy and alternative instruments to deal with asset price inflation. We show that, once asset price inflation is present, monetary policy can do little to stop processes of speculative bubbles. It is the more important that that alternatives are considered. These include the analysis of monetary conditions, a straight forward communication, better regulation, and a strengthening of institutions that allow for diversifying risks to handle the necessary structural changes with lowest possible economic costs.
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Determinanten des Erfolgs im Transformationsprozess der mittel- und osteuropäischen Länder - eine empirische Würdigung der Beiträge von Karl Wohlmuth
Tobias Knedlik
Ökonomische Systeme im Wandel der Weltwirtschaft/Economic Systems in a Changing World Economy - Festschrift zum 65. Geburtstag von Professor Dr. Karl Wohlmuth,
2007
Abstract
In his academic career Prof Dr Karl Wohlmuth is, among others, concerned with questions of the economics of transformation. In early contributions regarding the transformation process of Eastern European countries, he deducts policy recommendations for a success-ful transformation process. The present paper summarizes the analyses of Wohlmuth and empirically evaluates - as an ex post analysis - determinants of success in the transforma-tion process. The central question is whether the determinants as identified by Wohlmuth had a significant influence on the success of transformation. The results are that the factors ‘reform of the private sector’, ‘liberalization of the labor market’, and ‘fiscal consolidation’ have been of special importance. It could therefore be shown that the factors that have been early identified by Wohlmuth played in deed an important role in the transformation proc-ess. Thus, his recommendations are of relevance for the ongoing process of transformation.
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Enhanced Cooperation in an Enlarged EU
Götz Zeddies, J. Ahrens, Renate Ohr
Jahrbuch für Wirtschaftswissenschaften,
No. 2,
2007
Abstract
The paper addresses the need for more flexibility in the integration process of the European Union after its recent eastward enlargement. The increasing number of decision-makers and the increasing heterogeneity of economic structures, financial constraints, societal preferences, and political interests impeded political decision making in the EU. In order to avoid a rank growth of integration and yet to strengthen the momentum of flexibility, so-called enhanced cooperation appears to be an appropriate instrument to be applied to the overall integration process. In this context the paper analyzes different possible developments of selected common policies in the EU if enhanced cooperation is practised by a sub-group of EU-members. Based on cluster analysis, similarities and distinctions among the EU members with respect to some specific policy realms are elaborated to identify clusters, or clubs, of countries which may apply the instrument of enhanced cooperation in the specific policy fields.
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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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