Growth in biotechnology industry has come to a halt - is the industry still the great white hope?
Walter Komar
Wirtschaft im Wandel,
No. 11,
2004
Abstract
With the modern biotechnology a new industry has appeared worldwide. In Germany, the boom of the foundation of new companies started about 1996/1997. Meanwhile the growth of the biotechnology sector has come to a hold. The biotechnology industry experiences a phase of the consolidation. This paper shows that due to consolidation a core of successful companies will develop, which continue to grow and can support the development of the new industry. Also economically less advanced regions have a chance in the modern biotechnology.
Read article
The Contestable Markets Theory - Efficient Advice for Economic Policy
Christian Growitsch, Thomas Wein
External Publications,
2004
Abstract
During the nineties of the last century several formerly monopolistic markets (telecommunication, electricity, gas, and railway) have been deregulated in Germany based on European directives and theoretically inspired by the theory of contestable markets. The original contestable market theory implied three assumptions necessary to be satisfied to establish potential competition: Free market entry, market exit possible without any costs, and the price adjustment lag exceeding the entry lag. Our analysis shows that if the incumbent reduces its prices slowly (high adjustment lag) and the market entry can be performed quickly (low entry lag), a new competitor will be able to earn back sunk costs. Therefore it is not necessary that all three conditions be complied with for potential competition to exist. Applying this „revised“ contestable market theory to the deregulated sectors in Germany, natural monopolies can be identified in telecommunication sections local loops and local/regional connection networks, in the national electricity grid and the regional/local electricity distribution networks, in the national and regional/local gas transmission/distribution sections, and in the railroad network. These sections are not contestable due to sunk costs, expected high entry lags and a probably short price adjustment lag. They are identified as bottlenecks, which should be regulated. The function of system operators in energy and railroad are closely related to the non-contestable monopolistic networks.
Read article
The influence of Vertical Integration and Property Rights on Network Access Charges in the German Electricity Markets
Christian Growitsch, Thomas Wein
External Publications,
No. 6,
2004
Abstract
German Electricity markets were deregulated in the late nineties of the last century. In contrast to other European countries, the German government enacted negotiated third party access instead of installing a regulation authority. Network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers, which specify the calculation schemes for access charges. Local and regional suppliers are nevertheless able to set (monopolistic) charges at their own discretion, restricted only by the possibility of interference competition authorities. While some of those suppliers have been acquired by one of the four Transmission System Operators and become vertically integrated, the majority is still independent public utility companies. In this paper we analyse if there is evidence for different charging behaviour depending on the supplier’s economic independence or its level of vertical integration. Controlling for other coefficients as the so called structural features and related cost differences as well as the influence of competition law suits, multivariate estimations show significantly lower access charges than vertically separated suppliers, whereas incorporated network operators charge significantly higher charges compared to independent suppliers for at least one typical case.
Read article
The economic situation and development in the German regions along the border with Poland
Gerhard Heimpold
Jahrbuch für Regionalwissenschaft,
No. 1,
2004
Abstract
Read article
Promotion of investment in East Germany - Results of an empirical study of effectiveness
Harald Lehmann, Andreas Stierwald
Wirtschaft im Wandel,
No. 5,
2004
Abstract
In Germany considerable amounts of public funds are being spent on business development programs. In order to do so economic reasoning is needed. In particular the programs for supporting investment lack microeconometric empirical evaluation. To close this gap the special program „Gemeinschaftsaufgabe zur Verbesserung der regionalen Wirtschaftsstruktur“ (GA) is exemplarily analyzed. This program is intended to strengthen the capital stock of the East German economy, so firms of the East German manufacturing industries will be studied. A comparison of the two fundamental methods for microeconometric evaluation shall demonstrate the general problems in analyzing the effectiveness of development programs. The matching estimator provides more stable results then a sample selectivity model. The results suggest that the GA generates considerable extra investment activities.
Read article
Technological capability of foreign and West German investors in East Germany
Jutta Günther
IWH Discussion Papers,
No. 189,
2004
Abstract
Foreign direct investment (FDI) plays an important role for countries or regions in the process of economic catching-up since it is assumed – among other things – that FDI brings in new production technology and knowledge. This paper gives an overview about the development of FDI in East Germany based on official data provided by the Federal Bank of Germany. The investigation also includes a comparison of FDI in East Germany to Central East European countries. But the main focus of the paper is an analysis of the technological capability comparing majority foreign and West German owned firms to majority East German owned firms. It shows that foreign and West German subsidiaries in East Germany are indeed characterized by superior technological capability with respect to all indicators looked at (product innovation, research & development, organizational changes etc.).
Read article
Economic development in Central and Eastern Europe on the eve of the EU enlargement to the east
Martina Kämpfe
Wirtschaft im Wandel,
No. 4,
2004
Abstract
Die wirtschaftliche Entwicklung in der mittel- und osteuropäischen Region hat sich im Jahr 2003 weiter deutlich belebt, wobei -mit Ausnahme der Slowakei- der private Konsum wichtigste Wachstumsstütze war. Im Prognosezeitraum werden positive Impulse vom erwarteten Anziehen der Nachfrage in der EU auf die Exportentwicklung in Mittel- und Osteuropa ausgehen. Die Investitionen werden 2003 und 2004 ausgeweitet werden, insbesondere durch rege private Investitionsaktivitäten im Zusammenhang mit den geplanten EU-Beitritten, aber auch durch öffentlich finanzierte und von der EU geförderte Investitionsprogramme.
Read article
The economic structure of the largest East German cities: economic differences increase
Cordula Winkler
Wirtschaft im Wandel,
No. 2,
2004
Abstract
Especially large cities come into appearance within the field of interregional competition, while trying to attract enterprises and mobile production factors. Against this background, the paper examines the economic stage of development of the largest East German cities. In addition to the actual situation we have a look at the development of cities since the middle of the 90ies. Relating to the actual economic situation, the findings show great economic differences between cities. Nevertheless, none of the large cities have taken on a leading position for all considered indicators. Instead of this each large city has its own specific strengths and weaknesses – compared with the other large cities as well as compared with East Germany on the whole. In addition, a comparison with the situation in 1995 shows, that the degree of differentiation between cities has increased. This development goes along with a strengthening of specific economic profiles, particularly in smaller large cities.
Read article
Diversifikation und regionale Wirtschafts- und Beschäftigungsentwicklung - Eine empirische Analyse für ausgewählte deutsche Gebiete
Peter Haug
Jahrbuch für Regionalwissenschaft,
No. 2,
2004
Abstract
This article analyses the effects of heterogeneous economic structures on the long-term development of regional employment. A simple model is introduced to illustrate the beneficial outcomes for households as well as for enterprises of locating in highly diversified municipalities because risk (volatility of income, recruitment costs in a broader sense) diminishes for both. Econometric results for a sample of municipalities in Lower Saxony provide some evidence for a positive effect of local economic diversification on employment opportunities. The results seem to be not confined to the aggregated local labour demand but also apply to most branches the local business sector.
Read article
Second progress report by economic research institutes about the economic development in East Germany
IWH-Sonderhefte,
No. 7,
2003
Abstract
Schwerpunkte des Berichts sind – neben einer Analyse der technologischen Leistungsfähigkeit der ostdeutschen Wirtschaft und einer regional differenzierten Betrachtung der Infrastrukturausstattung – die Investitionsförderung, die Innovationsförderung und die Aktive Arbeitsmarktpolitik. Festgestellt wird, dass die Wirtschaftsförderung zwar in erheblichem Maße zur Unterstützung des Aufbaus in den neuen Ländern beigetragen hat, zunehmend aber an Wirksamkeit einbüßt. Sie sollte deswegen deutlich reformiert werden. Die Aktive Arbeitsmarktpolitik wiederum ist mit Blick auf die Beschäftigungswirkungen nur eingeschränkt als wirksam zu betrachten und sollte in ihrer jetzigen Form nicht fortgeführt werden. Angesichts dieser Ergebnisse und vor dem Hintergrund der finanzpolitischen Probleme Deutschlands wird vorgeschlagen, die besondere Investitions- und Innovationsförderung für die neuen Länder allmählich auslaufen zu lassen und verstärkt auf die Effizienz der eingesetzten Maßnahmen zu achten. Letzten Endes ist aber erst dann mit einer deutlich verbesserten wirtschaftlichen Lage in Ostdeutschland zu rechnen, wenn die gesamtwirtschaftlichen Wachstumsprobleme in ganz Deutschland gelöst werden.
Read article