Spatial Distribution of East German Innovative Competencies: Significant Increase in the Southwestern Hinterland of Berlin and in the Centres of Saxony and Thuringia
Peter Franz
Wirtschaft im Wandel,
No. 9,
2007
Abstract
Patent applications constitute an essential indicator for the extent of innovative activities in an economy or region. Due to the fact that innovative activities are in general spatially concentrated, policy makers perceive in this information starting points for a growth-oriented regional policy. Against this background, the Halle Institute for Economic Research (IWH) in 2004 had examined the spatial distribution of industries, firm networks and innovative competencies in the context of an area-wide study for East Germany. Newly available data for the patent statistics allow for an updating of these results regarding the innovative competencies for the time period from 2000 to 2005. In comparison to the time period between 1995 and 2000, an increase in innovative competencies becomes evident. This growth takes place almost exclusively in regions where innovative competencies are already domiciled. All in all, the growth dynamics of East Germany with regard to patent applications is slightly behind the West German one. The distribution of technological fields, to which the applied patents refer to, remained largely constant during the two observation periods. In the area of bio-technology, electrical engineering and of health care the standing of East Germany has further improved. With regard to political implications, the data should not be used for imposing technology specific support programs. Instead a tax relief for R&D independent of the used technologies seems to be more adequate.
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Spillover Effects of Spatial Growth Poles - a Reconciliation of Conflicting Policy Targets?
Alexander Kubis, Mirko Titze, Joachim Ragnitz
IWH Discussion Papers,
No. 8,
2007
Abstract
Regional economic policy faces the challenge of two competing policy goals - reducing regional economic disparities vs. promoting economic growth. The allocation of public funds has to weigh these goals particularly under the restriction of scarce financial re- sources. If, however, some region turns out to be a regional growth pole with positive spillovers to its disadvantaged periphery, regional policies could be designed to recon- cile the conflicting targets. In this case, peripheral regions could indirectly participate in the economic development of their growing cores. We start our investigation by defining and identifying such growth poles among German regions on the NUTS 3 administrative level based on spatial and sectoral effects. Using cluster analysis, we determine significant characteristics for the general identification of growth poles. Patterns in the sectoral change are identified by means of the change in the employment. Finally, we analyze whether and to what extent these growth poles ex- ert spatial spillover effects on neighbouring regions and thus mitigate contradictory in- terests in regional public policy. For this purpose, we apply a Spatial-Cross-Regressive- Model (SCR-Model) including the change in the secondary sector which allows to con- sider functional economic relations on the administrative level chosen (NUTS 3).
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Wertschöpfungsketten Ost: Motoren für nachhaltige kommunale Entwicklung
Martin T. W. Rosenfeld
Forum Neue Länder,
No. 6,
2007
Abstract
The article is discussing the impacts of regional and local value-added-chains on economic growth, with a special regard to those value-added-chains which include headquarters of private firms. In addition, the article raises the questions whether there should be public support for regional and local value-added-chains, and whether local public enterprises should be used as instruments for such a support.
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Long-Term Growth Projections for Eastern Germany
Udo Ludwig
Wirtschaft im Wandel,
No. 6,
2007
Abstract
Recent research comes to the conclusion that the eastern part of Germany not only heavily de-pends on its western counterpart, but that it essentially is dying a slow death. Arguments for this point of view reach from deindustrialisation and the lack of Headquarters of national and international Corporations to the rapidly aging society.
The study at hand assumes that economic development in a specific region does not only de-pend on the quantity and quality of its factors of production, but also on the overall conditions in the national economy a region is connected to. The analysis uses a framework in which the regional production factors are limited to the population and its development. Just as produc-tion, output is restricted to the value added of the region. Since data is only available for the ten years between 1995 - 2005, a panel econometric approach was chosen. For this purpose, the 97 spatial planning regions of Germany (Raumordnungsregionen) were divided into four groups according to their economic growth; slightly surprising, nine regions from Central Germany and Brandenburg fall into the top two groups.
The estimation results show that both economic growth in Germany as a whole as well as increases in the regional number of inhabitants positively influence regional value added. Fur-thermore, the impact of national growth is largest in the group with the highest regional value added and lowest in the group with the smallest regional output. On the other hand, lagged values of regional growth have the greatest impact in the low growth group and the smallest impact in the high growth group.
The main result of the study is that regional economic growth will not necessarily stop when the population is shrinking. After 2020, though, the growth rates of the gross domestic prod-uct will decrease. At the same time, the growth disparities between the different regions will not decline, a process aided by the demographic developments in Germany.
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Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Frühjahr 2007
Wirtschaft im Wandel,
1. Sonderausgabe
2007
Abstract
In spring 2007, the global economy remains robust. While growth rates have declined slightly from last year, as business activity in the US has slowed, they continue to reflect an upswing, which by now has held on for a notably long time. Especially the developing and emerging countries have been raising output very fast, due in part to their increasing role in the international division of labour. In the industrialised economies, on the other hand, the current recovery has not been remarkably strong. So far the slowdown in the US economy has not spilled over to other regions and the Euro Area as well as Japan continue to expand at a high pace. Here expansive monetary policy provided a notable support. Buoyant financial markets stimulated the world economy additionally, even though market volatility has increased since the end of February. The US central bank’s current concern with inflationary risks keeps it from loosening its slightly restrictive monetary policy. It will be the second half of the year – when price pressures have eased – until the Fed makes its first rate cut. The ECB, on the other hand, has been preparing financial markets for a further increase in interest rates by summer. In 2007 and 2008 the growth disparities in the industrialised countries will diminish. On one hand, the upswing in the Euro Area will start to moderate, as fiscal policy hampers business activity and monetary policy will not stimulate anymore. On the other hand, the US economy will slowly gain pace from summer onwards; the emerging markets will continue to develop in a highly dynamic fashion. World-GDP in this and next year will likely rise by about 3 ¼ % in 2007, which is still faster than in the average of the last ten years. World trade will rise by 7 ½ % in the coming two years. An oil price of 65 US-Dollar and an exchange rate between the Euro and the US-Dollar of 1.32 were assumed for both years 2007 and 2008. The real estate market in the USA continues to be a risk for...
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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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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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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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The IWH signals approach: the present potential for a financial crisis in selected Central and East European countries and Turkey
Hubert Gabrisch, Simone Lösel
Wirtschaft im Wandel,
No. 8,
2006
Abstract
The steep increase of oil prices, general threats rooting from Iran’s nuclear program, and doubts about the future policy of important central banks recently caused more uncertainties of investors on international financial markets. This explains the higher volatility and the fall of indices on stock markets including those of some Central and East European countries. International investors could respond with adjustments of their portfolio and trigger off a financial crisis. On this background, the article studies the potential for a financial crises in the region mentioned. The analytical tool is the IWH signals approach. The study concludes that the risk of the outbreak of a financial crisis within the next 18 months is rather unrealistic in most countries. A stable economic policy, high real growth rates, a financial system already robust compared to earlier times of transition, and appropriate exchange rate arrangements protect the countries against speculative attacks and portfolio adjustments. When the composite indicator shows deterioration like in the Baltic countries, it turned out to be negligible. For the Slovak Republic and Slovenia, the composite indicator even improved. A closer look to individual indicators reveals still some problems in the banking sectors of the Czech Republic, Poland, and Hungary, however, without out major impact on the composite indicator.
This general assessment does not apply to Romania, and, in particular, to Turkey. The composite indicator signals a significant increase of the risk potential for the next 18 months in both countries. There is a considerable need for sound policy action.
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Wie steht es in Mecklenburg-Vorpommern um die Ballung wirtschaftlicher Aktivitäten? - Eine Untersuchung unter besonderer Berücksichtigung der Städte des Landes
Gerhard Heimpold, Martin T. W. Rosenfeld
Rostocker Beiträge zur Regional- und Strukturforschung, Heft 18,
No. 18,
2006
Abstract
Urban and regional economics put great emphasis on urban spaces and, in general, on the importance of agglomeration forces, which is of great importance for the development perspectives of structurally weak regions. This in mind, the contribution investigates the extent and the structures of economic agglomeration characteristics, using the example of the cities in the Federal State of Mecklenburg-Vorpommern. In this context, the question is raised whether the potential given there might be better used to achieve economic progress. The contribution starts with a brief theoretical overview on the importance of agglomeration forces for urban and regional development. The empirical section comprises, first, an analysis how the cities under consideration are endowed with factors being regarded as important for economic growth; second, two essential elements of agglomeration of economic activities are investigated more in-depth: spatially concentrated industries and business networks. The investigation is based on a method which was already in use within an East-Germany wide study on Economic Development Spots (project on behalf of the Federal Office for Building and Regional Planning - BBR, finished in 2004). Finally, the contribution draws implications for the economic policy at the Laender level as well as at the municipal level.
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