Firm Density in East Germany: Findings from the Business Register
Gerhard Heimpold
Wirtschaft im Wandel,
No. 10,
2008
Abstract
The contribution focuses on the business density in East Germany in comparison with West Germany. For the purpose of the investigation, a new information source was used – the so-called Business Register. Business density in East Germany is of relevance for two reasons: First, when the wall came down in 1989, the East German economy suffered from the lack of private firms. Second, after 2000, a gap in terms of work places is still existent. The empirical data on business density in East Germany do not reveal an unequivocal picture. Measuring business density by comparing the number of firms with the respective number of population reveals a gap in terms of the number of businesses per 10 000 inhabitants in East Germany. The gap is above average with respect to firms in the manufacturing sector, and it is particularly high regarding larger manufacturing firms. Measuring the business density as a quota of the number of firms and the volume of Gross Domestic Product (GDP) reveals a reverse picture: The business density in relation to GDP is on average higher in comparison with the respective value in West Germany. Maybe, the size of the East German market sets limits regarding the number of firms which may act there. However, the size of the domestic market is not so relevant for the firms belonging to the manufacturing sector and to the business-related services since they are expanding to a large extent due to their export activities. Though from the manufacturing sector, relativly positive development perspectives can be expected, the number of large firms per 10 000 inhabitants is relatively low in comparison with West Germany. Public support for strengthening the business landscape in the East German manufacturing sector remains on the agenda of economic policy in Germany.
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Will Oil Prices Decline Over the Long Run?
Filippo di Mauro, Robert K. Kaufmann, Pavlos Karadeloglou
ECB Occasional Paper Series,
No. 98,
2008
Abstract
At present, oil markets appear to be behaving in a fashion similar to that in the late 1970s and early 1980s when oil prices rose sharply over an extended period. Furthermore, like at that time, analysts are split on whether such increases will persist or reverse, and if so by how much. The present paper argues that the similarities between the two episodes are not as strong as they might appear at first sight, and that the likelihood of sharp reversals in prices is not particularly great. There are a number of reasons in support of the view that it is unlikely that the first two decades of this century will mimic the last two decades of the previous century. First, oil demand is likely to grow significantly in line with strong economic growth in non-OECD countries. Second, on the supply side, OPEC is likely to enhance its control over markets over the next two decades, as supply increases in newly opened areas will only partially offset declining rates of production in other geologically mature non-OPEC oil regions. Moreover, while concerns about climate change will spur global efforts to reduce carbon emissions, these efforts are not expected to reduce oil demand. Finally, although there is much talk about alternative fuels, few of these are economically viable at the prices currently envisioned, and given the structural impediments, there is a reduced likelihood that the market will be able to generate sufficient quantities of these alternative fuels over the forecast horizon. The above factors imply that oil prices are likely to continue to exceed the USD 70 to USD 90 range over the long term.
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Spatially Concentrated Industries as Innovation Driver? – Empirical Evidence from East Germany
Christoph Hornych, Michael Schwartz
Wirtschaft im Wandel,
No. 9,
2008
Abstract
A positive relation between the spatial concentration of sectors and their capacity of innovation is frequently assumed in regional science as well as in regional development policy. Therefore, with the support of sectoral agglomeration, effects on the regional technological performance are expected. However, previous empirical work is inconsistent in supporting this interdependency.
This study aims to examine the effects of sectoral agglomeration on innovative activities in East-German regions. For this purpose, spatially concentrated industries are identified and included in the estimation of regional ‘knowledge-production-functions’. Contrary to expectations, the spatial concentration seems to inhibit the amount of patent-activities of the sector in the specific region. In contrast, positive effects are generated from research facilities. Moreover, we find evidence for intersectoral spillovers.
The results show that for innovative activities, urbanization effects have a higher relevance as localization effects. So far, spatially concentrated industries are not an innovation driver in East Germany.
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Exchange Rates and FDI: Goods versus Capital Market Frictions
Claudia M. Buch, J. Kleinert
World Economy,
forthcoming
Abstract
Changes in exchange rates affect countries through their impact on cross-border activities such as trade and foreign direct investment (FDI). With increasing activities of multinational firms, the FDI channel is likely to gain in importance. Economic theory provides two main explanations why changes in exchange rates can affect FDI. According to the first explanation, FDI reacts to exchange rate changes if there are information frictions on capital markets and if investment depends on firms’ net worth (capital market friction hypothesis). According to the second explanation, FDI reacts to exchange rate changes if output and factor markets are segmented, and if firm-specific assets are important (goods market friction hypothesis). We provide a unified theoretical framework of these two explanations. We analyse the implications of the model empirically using a dataset based on detailed German firm-level data. We find greater support for the goods market than for the capital market friction hypothesis.
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Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems
Michael Fritsch, Viktor Slavtchev
Determinants of Innovative Behaviour,
2008
Abstract
Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs’ externalities). We test the impact of both MAR as well as Jacobs’ externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.
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Flow of conjunctural information and forecast of euro area economic activity
Katja Drechsel, L. Maurin
ECB Working Paper, no. 925,
2008
Abstract
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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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Wirtschaftspolitische Beratung im Zeichen der Transformation: das Institut für Wirtschaftsforschung Halle
Ulrich Blum, Martin T. W. Rosenfeld
Zeitschrift für Politikberatung,
2008
Abstract
The paper analyzes the role of scientific policy advice in modern democratic societies in general and the role of the Halle Institute for Economic Research as one of the major German economic research institutes in particular. It shows that public funded institutions must be politically independent in order to turn theory and evidence based knowledge into political advice. Typical communication channels are contract research and public hearings as well as publications in economic policy journals, a frequent presence in other print media, radio, television and internet.
The Halle Institute for Economic Research focuses on macroeconomic analyses and forecasting. In addition it scrutinizes structural change and transformation processes from a regional, innovation system, competition and urban perspective.
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Suburban Municipalities on Trial – Analysing the Sustainability of Socioeconomic Structures at the Example of the Municipality Schkopau
Sabine Döhler, Alexander Kubis
Wirtschaft im Wandel,
No. 7,
2008
Abstract
This article analyses socio-economic criteria of municipalities next to large cities. In a case study, we examine the municipality Schkopau in the south of Saxony-Anhalt. We ask if the fusion of smaller communes to this “new” municipality created in 2004 was rational in terms of sustainable socio-economic structures. Hence, we use the criteria of satellite towns developed by Boustedt.
We show that the criterion of political independence is assured by law. Meanwhile, the criteria independence of culture and urban development are not completely fulfilled. Due to the high density of industrial enterprises, the municipality has high tax revenue and therefore a strong financial basis. Also, the criterion of the minimum population figure is implemented.
Based on the specific results of the satellite town criteria, we could not find definite results for the municipality Schkopau, they are rather ambivalent. This result is partly caused by the strong interactions within the functional area of the provinces Saxony, Saxony-Anhalt and Thuringia. Due to the high dynamic of the structural change, we also point out the necessity to enhance the criteria for sustainable socio-economic structures of local and regional municipalities.
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How Does Industry Specialization Affect the Efficiency of Regional Innovation Systems?
Michael Fritsch, Viktor Slavtchev
Jena Economic Research Papers, Nr. 2008-058,
No. 58,
2008
Abstract
This study analyzes the relationship between the specialization of a region in certain industries and the efficiency of the region in generating new knowledge. The efficiency measure is constructed by relating regional R&D input and output. An inversely u-shaped relationship is found between regional specialization and R&D efficiency, indicating the presence of externalities of both Marshall and Jacobs’ type. Further factors influencing efficiency are spillovers within the private sector as well as from public research institutions. The impact of both the specialization and the additional factors is, however, different for regions at different efficiency levels.
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