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Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
The Effect of the Single Currency on Exports: Comparative Firm-level Evidence
IWH-CompNet Discussion Papers,
We investigate how adopting the euro affects exports using firm-level data from Slovakia and Estonia. In contrast to previous studies, we focus on countries that adopted the euro individually and had different exchange rate regimes prior to doing so. Following the New Trade Theory we consider three types of adjustment: firm selection, changes in product varieties and changes in the average value of the exports that compose the exports of individual firms. The euro effect is identified by a difference in differences analysis comparing exports by firms to the euro area countries with exports to the EU countries that are not members of the euro area. The results highlight the importance of the transaction costs channel related to exchange rate volatility. We find the euro has a strong pro-trade effect in Slovakia, which switched to the euro from a floating exchange rate, while it has almost no effect in Estonia, which had a fixed exchange rate to the euro prior to the euro changeover. Our findings indicate that the euro effect manifested itself mainly through the intensive margin and that the gains from trade were heterogeneous across firm characteristics.
IWH-CompNet Discussion Papers
IWH-CompNet Discussion Papers The IWH-CompNet Discussion Paper series presents research...
Joint R&D Subsidies, Related Variety, and Regional Innovation
International Regional Science Review,
Subsidies for research and development (R&D) are an important tool of public R&D policy, which motivates extensive scientific analyses and evaluations. This article adds to this literature by arguing that the effects of R&D subsidies go beyond the extension of organizations’ monetary resources invested into R&D. It is argued that collaboration induced by subsidized joint R&D projects yield significant effects that are missed in traditional analyses. An empirical study on the level of German labor market regions substantiates this claim, showing that collaborative R&D subsidies impact regions’ innovation growth when providing access to related variety and embedding regions into central positions in cross-regional knowledge networks.
The Importance of Localized Related Variety for International Diversification of Corporate Technology
Internationalization of research and development has increased substantially in recent years. This paper analyses the determinants of spatial distribution of foreign technological activities across 96 regions in Germany. It identifies foreign technological activities by applying the cross-border ownership concept to patent applications. The main proposition is that regions with higher related variety of technological activities between sectors attract more foreign technological activities. The estimations show that this is the case in regions characterized by a high overall technological strength. This suggests that related variety facilitates technological diversifications of foreign corporations in regions at the top of the geographic hierarchy.
Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach
Papers in Evolutionary Economic Geography,
The paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.
Wirtschaftsstruktur und Regionalentwicklung: Zur Bedeutung von Headquartern und verbundenen Wirtschaftszweigen
Wirtschaft im Wandel,
Der Artikel widmet sich der Frage, welchen Einfluss die Verbundenheit (related variety) und Unverbundenheit (unrelated variety) von Wirtschaftszweigen auf das regionale Beschäftigungswachstum ausüben. Theoretische Erkenntnisse lassen einerseits vermuten, dass Regionen in ihrer Entwicklung von der Existenz verbundener Wirtschaftszweige profitieren (related variety, z. B. regionale Präsenz möglichst vieler Bereiche des Fahrzeugbaus), da dies die Entstehung von Wissensspillovers befördert. Andererseits kann auch eine große regionale Branchenvielfalt (unrelated variety, z. B. Automobilindustrie, Chemie, Maschinenbau) positive Effekte entfalten, indem sie die Krisenanfälligkeit reduziert.
Der Beitrag erweitert das bestehende Analysekonzept um Aspekte der funktionalen Besonderheiten regionaler Wirtschaftszweige. Dies ermöglicht die Abbildung unterschiedlicher regionaler Schwerpunkte im Produktionsprozess
(beispielsweise bei Fertigungs-, Forschungs- und Entwicklungs- oder Führungsfunktionen). Die Ergebnisse zeigen, dass der Einfluss einer starken Verbundenheit von Wirtschaftszweigen nur dann positiv ist, wenn die Verbundenheit mit einer hohen Präsenz von Führungsfunktionen in der Region einhergeht. Das fehlende Zusammenspiel von Verbundenheit und Führungsfunktionen wirkt negativ auf das Beschäftigungswachstum. Unverbundene Wirtschaftszweige erweisen sich für eine Region als vorteilhaft, wenn vielfältige
Fertigungs- und Führungsfunktionen in unterschiedlichen Wirtschaftszweigen ausgeübt werden.
Related Variety, Unrelated Variety and Regional Functions: Identifying Sources of Regional Employment Growth in Germany from 2003 to 2008
IWH Discussion Papers,
This article analyses how regional employment growth in Germany is affected by related variety, unrelated variety and the functions a region performs in the production process. Following the related variety literature, we argue that regions benefit from the existence of related activities that facilitate economic development. However, we argue that the sole reliance of related variety on standard industrial classifications remains debatable. Hence, we offer estimations for establishing that conceptual progress can indeed be made when a focus for analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety. Our findings suggest that related variety only in combination with a high functional specialization
of the region facilitates regional growth in Germany. Additionally, also unrelated
variety per se fails to wield influences affecting development of regions. It is rather unrelated, but functionally proximate variety in the groups “White Collar” and “Blue Collar Workers” positively affects regional employment growth.