Considerable Export Potentials in Eastern Germany
Götz Zeddies
Wirtschaft im Wandel,
No. 2,
2007
Abstract
For a long time, the Federal Republic of Germany is one of the countries with the highest export performance in the world. But a closer examination of East- and West-Germany reveals substantial regional differences. The collabse of the markets in the eastern European countries, which were the main trading partners of GDR, after the breakdown of communism caused a sustainable decline of East-German exports. Nevertheless it was expected that the economic recovery in the former communist countries and the access to new export markets in the western world would cause an upward movement of East-German Trade. Although during the last years East-German exports grew faster than those of Western Germany, the east German share in Germanys total exports is still comparatively low. On the basis of a gravity-model of trade, bilateral export potencials are empirically analysed. This is done for the Federal Republic of Germany as a whole, and seperately forEast and West-Germany. Afterwards, the calculated export potencials are compared with actual exports. The results show that Germany as a whole exceeds its export potencial against the majority of its main trading partners. The differentiated analysis for East and West-Germany supports the hypothesis that Germanys high export performance stems from the western part of the country, whereas the eastern part exploits its export potencial with Germanys main trading partners only to the half. The unexploited export potencials as well as the higher concentration on the fast-growing central and eastern European markets imply considerable potencials for East-German exports to grow in the future.
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Population ageing and new entrepreneurship activities in East Germany
Stefan Eichler, Lutz Schneider
Wirtschaftspolitik und wirtschaftliche Entwicklung: Analysen unter besonderer Berücksichtigung ostdeutscher Regionen,
2007
Abstract
Population shrinking and ageing are obvious trends in many German regions, but in the Eastern states they reach an unique level. An often ignored economic implication of these demographic developments is the reduction of the entrepreneurial potential. Shirking, on the one hand, diminishes the quantity of potential entrepreneurs, on the other hand these effects are strengthened by ageing trends, since people usually decide in younger years to found an enterprise. The analysis tries to quantify the impact of demographic change on entrepreneurship activities in east Germany until 2020.
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Threshold for employment and unemployment. A spatial analysis of German RLM's 1992-2000
Christian Dreger, Reinhold Kosfeld
External Publications,
2006
Abstract
Changes in production and employment are closely related over the course of the business cycle. However, as exemplified by the laws of Verdoorn (1949, 1993) and Okun (1962, 1970), thresholds seem to be present in the relationship. Due to capacity reserves of the firms, output growth must exceed certain levels for the creation of new jobs or a fall in the unemployment rate. While Verdoorn's law focuses on the growth rate of output sufficient for an increase in employment, in Okun's law, the fall in the unemployment rate becomes the focus of attention. In order to assess the future development of employment and unemployment, these thresholds have to be taken into account. They serve as important guidelines for policymakers. In contrast to previous studies, we present joint estimates for both the employment and unemployment threshold. Due to demographic patterns and institutional settings on the labour market, the two thresholds can differ, implying that minimum output growth needed for a rise in employment may not be sufficient for a simultaneous drop in the unemployment rate. Second, regional information is considered to a large extent. In particular, the analysis is carried out using a sample of 180 German regional labour markets, see Eckey (2001). Since the cross-sections are separated by the flows of job commuters, they correspond to travel-to-work areas. Labour mobility is high within a market, but low among the entities. As the sectoral decomposition of economic activities varies across the regions, the thresholds are founded on a heterogeneous experience, leading to more reliable estimates.The contribution to the literature is twofold. First, to the best of our knowledge, no previous paper has investigated a similar broad regional dataset for the German economy as a whole before. By using a panel dataset, information on the regional distributions around the regression lines as well as theirs positional changes is provided for each year. Second, the methods applied are of new type. They involve a mixture of pooled and spatial econometric techniques. Dependencies across the regions may result from common or idiosyncratic (region specific) shocks. In particular, the eigenfunction decomposition approach suggested by Griffith (1996, 2000) is used to identify spatial and non-spatial components in regression analysis. As the spatial pattern may vary over time, inference is conducted on the base of a spatial SUR model. Due to this setting, efficient estimates of the thresholds are obtained. With the aid of a geographic information system (GIS) variation of the spatial components can be made transparent. With Verdoorn’s and Okun’s law the figures show some significant patterns become obvious over time. In respect to Verdoorn’s law, for instance, a stripe of high values in the north-western part from Schleswig-Holstein via Lower Saxony and North Rhine Westfalia to Rhineland Palatinate is striking in all years but 1994 and 1995. In most periods the spatial component is likewise concentrated in Saxony. Clusters of low values can be found in northern Bavaria and, in some periods, in Thüringen and Mecklenburg-Vorpommern. Other parts of Germany appear to be more fragmented consisting of relative small clusters of low, medium and high values of the spatial component. With Okun’s law some changing spatial patterns arise. In all, spatially filtering provides valuable insights into the spatial dimensions of the laws of Verdoorn and Okun.
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Development aid and economic freedom: Are there interrelations?
Tobias Knedlik, Franz Kronthaler
Wirtschaft im Wandel,
No. 11,
2006
Abstract
Development aid attracts currently high public attention, e.g. because of the Millennium Development Goals of the United Nations. Thereby so-called weak factors gain importance in the debate of development policy. In this regard the establishing of enabling conditions, which allow and support economic activities is central. Economic freedom is an important concept in the discussion. The academic literature clearly suggests a positive relation between economic freedom and economic development. This is the motivation to analyze the impact of development aid on economic freedom.
This contribution analysis this impact of two forms of development aid (conditional and overall aid). In contrast to expectations the results show a positive impact of overall aid and a negative impact of conditional aid on economic freedom. Economic policy should consider the positive effect of overall aid and adjust aid conditions according to domestic requirements in recipient countries to avoid negative effects on economic freedom.
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Interregional equalization policy in focus: Donor regions and beneficiary regions and their economic performance
Gerhard Heimpold, Peter Franz
Wirtschaft im Wandel,
No. 11,
2006
Abstract
The future of the interregional equalization policy in Germany is discussed intensively at present. While in the past the interest of equalization policy was focussed primarily on the regions which benefit from interregional equalization policy (beneficiary regions) and the effects obtained there, recently the view is directed also toward the regions which bear the fiscal burden of the equalisation policy (donor regions). Concerning the donor regions, a fear of growth-absorbing withdrawal effects exists, which gives reason in view of declining economic growth rates on the national level to think about the future of interregional equalization policy. The IWH contributed to this debate together with two project partners by an investigation, which was accomplished on behalf of the Federal Office for Building and Regional Planning. The following findings will show the economic performance of the donor regions (exclusively West German regions) and of the beneficiary regions (all East German regions and a few West German regions) and their changing economic growth patterns. Concerning the level of economic performance, measured by means of the gross domestic product (GDP) per capita, as expected, the donor regions, consisting of West German regions, in the period 1992-2003 altogether show an above average GDP per capita. In contrast, the beneficiary regions, both the East German and (less strongly) the West German show a GDP per capita below average. Concerning the development of the economic performance, which was measured on the basis of the relative GDP per capita (GDP per capita of the region concerned in relation to the national average), the East German beneficiary regions could catch up in the first period (1992-1998) strongly. This catching up process, however, clearly slowed down in the second period 1998-2003. Like a mirror-image the lead of the donor regions regarding GDP per capita in relation to the national average became smaller. But after 1998 many West German donor regions regained their growth dynamics. Additionally the contributions of the regions to the absolute increase of the GDP in the period 1998-2003 were investigated: 30 of 271 regions have a share of around 50% in the overall GDP increase, 28 of them located in West Germany, and 21 of them donor regions. This in mind, the policy should further provide and secure favourable development conditions for those regions, which contribute at most to the increase of the overall economic performance and thus create the economic base for the interregional equalization policy.
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Die Gestaltung der Wirtschaftsstruktur durch das Land Brandenburg - Eine kritische Analyse der Subventionszahlungen für die CargoLifter AG
Mirko Titze
Forum der Forschung. Wissenschaftsmagazin der Brandenburgischen Technischen Universität Cottbus,
No. 17,
2004
Abstract
The Government of the State of Brandenburg subsidised the company CargoLifter AG on the basis of the „new industrial policy“. Following this policy the government supports individually selected industries or companies. The „new industrial policy“ is supported by the strategic trade policy, which states that subsidising domestic companies in incomplete markets with declining average costs and high entry barriers can increase the welfare level of a particular region. The following article provides an analysis whether in the case of Cargo-Lifter the Government of the State of Brandenburg pursued an effective strategic trade policy. Moreover the article investigates particular problems of the strategic trade policy.
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Where are the economic development cores of East Germany? Results of a survey of the focuses of branches, enterprise networks and innovative competence fields in the East German Regions
Peter Franz, Gerhard Heimpold, Martin T. W. Rosenfeld
Regionale Strukturpolitik - quo vadis?, Informationen zur Raumentwicklung, Heft 9,
No. 9,
2006
Abstract
The contribution presents the results of an empirical study conducted by the Halle Institute for Economic Research on behalf of the Federal Office for Building and Regional Planning. The study concerns the identification of “regional clusters” for all spatial planning regions in East Germany. As criteria to identify clusters, three components were taken into consideration: spatially concentrated industries, enterprise networks and innovative competence fields, whereas, for the purpose of identifying “clusters”, the networks and innovative competences have to show a co-incidence with the industry which is spatially concentrated. Cases of co-incidence of all three elements were categorised as economic development cores (or spots), i. e. as forms of spatially concentrated economic activities which show cluster-relevant qualities. For regions which possess economic development spots, the growth perspectives can be expected as more favourable in comparison with other regions. The findings show a particularly high concentration of economic development spots in the Berlin region as well as in the Federal States of Saxony and Thuringia, where the cities of Dresden, Leipzig, Erfurt and Chemnitz form delineating points within which a particularly high number of economic development spots are existent. As a consequence, the study might initiate a debate in favour of a stronger spatial concentration of regional policy measures instead of spreading the resources by “watering can principle”.
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Do House Prices Drive Aggregate Consumption?
Marian Berneburg, Axel Lindner
Wirtschaft im Wandel,
No. 10,
2006
Abstract
In recent times increasing house prices have been credited with a stong positive influence on aggre-gate consumption. But it is questionable in how far higher prices are at all able to lift the purchasing power of the economy as whole: The seller’s profit of a high price, equals the buyer’s loss. But while a positive correlation between house prices and consumption is evident, it is not a sign of irra-tional behaviour by market participants. In fact it seems that both factors are driven by other pa-rameters: the interest rate and expectations about future interest rates and economic activity. For a selection of four developed countries, the follow-ing article tries to give an explanation for the house price developments of the past 15 years. While disregarding country specific risk as well as institutional aspects and demographic factors, a present value caluclation forms the basis for esti-mating a fundamentally justified price movement. Expectations for future rents and discount rates are being proxied by a moving average of past values. It can be observed how interest rate changes and long-run economic growth, two as-pects that clearly also drive private consumption, play a key role here.
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Economic development cores in East German regions: branch concentrations, company networks and innovative fields of competence of the economy
Martin T. W. Rosenfeld, Peter Franz, Jutta Günther, Gerhard Heimpold, Franz Kronthaler
IWH-Sonderhefte,
No. 5,
2006
Abstract
Der Begriff „Cluster“ ist in jüngster Zeit für die Akteure der Raumentwicklungspolitik auf allen Ebenen des Staates fast zu einer Art Zauberformel zur Beschwörung der Kräfte des regionalen Wirtschaftswachstums geworden. Die Sache hat allerdings mindestens zwei Haken: erstens hat jeder Akteur seine eigene Auffassung von dem, was unter Clustern zu verstehen ist; zweitens besteht ebenfalls keine Einigkeit darüber, mit welchen Strategien die vorhandenen Cluster unterstützt oder neue Cluster entwickelt werden sollten.
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The Economic Theory of Institutional Change (ETIC) as an Approach to Explain the Emergence of Public Activities (Überarbeitete Fassung eines Vortrags anläßlich der Jahrestagung 1996 des International Institute of Public Finance in Tel Aviv )
Martin T. W. Rosenfeld
Zeitschrift für Wirtschafts- und Sozialwissenschaften (ZWS),
1997
Abstract
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