FDI, Producitivity and Economic Restructuring in Central and Eastern Europe
Judit Hamar, Johannes Stephan
Foreign Direct Investment and Technology Transfer in Transition Countries: Theory – Method of Research – Empirical Evidence,
2005
Abstract
This introducturory chapter of Part II of the book represents a comparative overview of economic development and the changing conditions for and results of FDI as a mechanism of productivity growth in Estonia, Hungary, Poland, the Slovakia-Republic, Slovenia. By summarising briefly the main similarities and differences by countries depend on their different stages in FDI attractiveness, labour productivity, economic development levels and restructuring by technology intensity.
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Comment on A. Bley's article on 'Monetary Aspects of European Eastern Enlargement and CEE participation in ERM and EMU'
Johannes Stephan
Technology Transfer via Foreign Direct Investment in Central and Eastern Europe. Theory, Method of Research and Empirical Evidence. Studies in Economic Transition. Series edited by J. Hölscher and H. Tomann,
2005
Abstract
Foreign subsidiaries of multinational companies are suggested as one of the main channels of technology transfer to less developed economies. In Central East Europe their presence proved to be a decisive factor to economic restructuring and development. This volume is a unique guide to theory, method of research, and empirical evidence for technology transfer via foreign subsidiaries of multinational companies. It combines the merits of a core text on technology transfer via FDI with up-to-date empirical evidence.
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The Economics of Restructuring the German Electricity Sector
Christian Growitsch, Felix Müsgens
Zeitschrift für Energiewirtschaft,
No. 3,
2005
Abstract
The debate about the development of German electricity prices after the liberalization of energy markets in 1998 raises the question of failures in market restructuring. However, a general statement would be misleading for two main reasons. Firstly, the price development, analyzed for the exemplary case of household prices, shows significant differences among the stages of the value chain. Secondly, the underlying cost structure might have changed from 1998 to 2004. While such effects can be expected to level out over time, they can distort the comparison of a small period of observation. For these reasons, we analyzed the different price components at a detailed level, finding a considerable price reduction of about 32% in generation and a much lower reduction of 13% in transmission and distribution tariffs. These decreases have been mostly compensated by a significant increase in taxes and subsidies (+56%).
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An analysis of household electricity price developments in Germany since liberalization
Christian Growitsch, Felix Müsgens
External Publications,
2005
Abstract
Despite the liberalization of energy markets in 1998, household electricity prices in 2004 are nearly the same as 1998, indicating a failure of market restructuring. However, such a general consideration is misleading for two main reasons. Firstly, the price development shows significant differences among the stages of the value chain. Secondly, the underlying cost structure might have changed from 1998 to 2004. While such effects can be expected to level out over time, they can distort the comparison of a small period of observation. For these reasons, we analyzed the different price components at a detailed level, finding a considerable price reduction of about 32% in generation and a much lower reduction of 13% in transmission and distribution tariffs. These decreases have been mostly compensated by a significant increase in taxes and subsidies (+56%).
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Liberalization of Electricity Markets in Selected European Countries
Albrecht Kauffmann, M. Keim, P. J. J. Welfens
Diskussionsbeiträge des Europäischen Instituts für Internationale Wirtschaftsbeziehungen (EIIW), Bergische Universität Wuppertal, Nr. 124,
No. 124,
2004
Abstract
We look into liberalization issues in the context of the EU Electricity Liberalization. Taking a look at principal issues reveals that the Community Directive 96/92/EC does not really take into account the interdependencies of energy markets. Moreover, third party access is not effectively enforced, particularly not in Germany, where mergers between a major electricity company and the dominant gas company have raised particular issues. Electricity liberalization in Scandinavia is working relatively well. EU accession countries are considered potential electricity exporters in the long run as full restructuring will drive down both energy intensities and electricity intensities. Russia would be wise to quickly become a member country of WTO, not in the least to gain access to Western Europe’s electricity market; the role of Russia so far has been neglected in the discussion of electricity liberalization. Excess capacities in EU-27 can be expected in the medium term. There is considerable doubt that politicians – often with ambitious goals in the field of environmental policy – will allow for a pan-European liberalization of electricity. We also take a closer look at regulatory policy issues.
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Opportunities and Risks for Regional Development in Former East German Brown Coal Mining Areas: The Case of the “Geiseltal” Mining Area in Saxony-Anhalt
Peter Franz
Wirtschaft im Wandel,
No. 11,
2003
Abstract
The rehabilitation of former brown coal open mining locations represents an important section of the economic and ecological restructuring process in East Germany, taking place since 1990. The recent progress in rehabilitation has led to large amounts of newly disposable space and thus expands the opportunities for regional development, especially with respect to tourism. But the possible positive effects are at risk because of diverse obstacles. In the case of the former open mining location of the “Geiseltal” in the south of Saxony-Anhalt such obstacles show up in form of a strong identification of the residents with the tradition of mining industry, in form of the expansive interests of nature protection organizations, and in form of inadequate organisational structures of the local public administration. In the case of a tourism-oriented development strategy risks arise concerning the actual duration of the remaining recultivation process and concerning the competition with locations with similar development targets.
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Significant Progress in East German Machine Construction Industry
Siegfried Beer
Wirtschaft im Wandel,
No. 2,
2003
Abstract
The restructuring of the mechanical engineering industry of the new Länder has displayed clearly positive effects. Between 1997 and 2001, productivity and turnover have increased by about 25 %. Since mid 1999 the number of employees has also gone up again. Business surveys indicate an improvement in profitability. This positive development is due to an increase in competitiveness which is based on new product lines together with more effective innovation activities. Growth has also been enhanced by the enlargement and modernisation of the capital stock and a moderate movement of wages. Despite this progress the east German engineering industry as a whole does by far not reach the productivity figures of its west German counterpart. Differences explaining this gap are found in the product structure with dominating customer specific products and in the firm size with a smaller number of employees in the East.
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Financial policy dominated by consolidation
Kristina vanDeuverden
Wirtschaft im Wandel,
No. 10,
2002
Abstract
Submitting the Stability and Growth Pact European member states committed themselves to reduce their budget deficits. In spring this year the German fiscal position worsened more and more and it became obvious that the deficit target would – again – be missed. Despite the worsened starting point Germany affirmed to follow its original stability programme and to attain a budget “close to balance” by the year 2004. Thus, consolidation will have to be strengthened and the scope for fiscal policy narrows down.
If current fiscal policy is not sustainable, the necessity of consolidation is obvious. However, the mode of consolidation is controversial. The Stability and Growth Pact focuses on converging budget deficits close to balance. For this, short-term oriented consolidation dominates the more medium and long-term oriented aspects of fiscal policy. Generating economic conditions by fiscal policy is at least restricted, maybe temporarily impossible – and shortening the consolidation period increases its costs.
A forecast of the government’s financial development in the years 2002 to 2006 shows clearly that the restructuring of revenues and expenditure will show no progress. In particular, the lack of structural reforms will burden Germany’s fiscal situation in the medium-term oriented consolidation period. However: the political self-commitment this spring leaves no scope for alternatives, but to enforce the consolidation. Despite some efforts, the projection concludes that by the year 2004 the budget will show a deficit.
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Germany: Cyclical Improvement not Until the End of the Year
Wirtschaft im Wandel,
No. 12,
2001
Abstract
During the second quarter of 2001 German overall production stagnated. Weak global development muddied the economic prospects of firms and prevented them from rising their output and their investment activities. In 2001 gross national product will only increase by 1%; the number of unemployed will be higher than expected. Nevertheless, we advise against an increase in public expenditure that aims at stimulating the economy. Anyhow, growing public deficits, caused by cyclical movements, should be accepted. In order to increase employment labour market reforms become more urgent.
In East Germany, currently even a decline in gross national product cannot be excluded. After the first period of restructuring, which has been accompanied by structural problems, cyclical movements become more important. In addition, economic stagnation burdens labour markets. Nonetheless trying to stimulate the East German economy by government spending programmes does not seem to be a viable strategy. From the cyclical point of view they are not very efficient and concerning structural problems they are no solution.
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Insolvency law and company restructuring in transformation countries: The example of Russia
Thomas Linne
Wirtschaft im Wandel,
No. 6,
2001
Abstract
Wirtschaft im Wandel 6/2001 147 Ein zentrales Element der Transformationsprozesse in den Länder Mittel- und Osteuropas sind institutionelle Anpassungen. Diese Anpassungspro- zesse sind unabdingbare Voraussetzung für ein stabiles, längerfristiges Wirtschaftswachstum. Ein wichtiger Bestandteil der institutionellen Rahmenbedingungen ist dabei das Insolvenzrecht. Im Zuge der Novellierung des russischen Insolvenzgesetzes vom März 1998 kam es zu einem Anstieg der Unternehmensinsolvenzen. Die steigenden Insolvenz- zahlen sind im Sinne einer härteren Budgetrestriktion für die Unternehmen und verstärkten Anreizen für eine bessere Unternehmensführung positiv zu beurteilen. Gleichwohl bestehen noch erhebliche institutionelle Hemmnisse: Die Sanierungsverfahren von insolventen Unternehmen werden häufig noch zur Konkursverschleppung zweckentfremdet. Staatliche Gläubiger betrieben den Forderungseinzug gegenüber säumigen Schuldnern weniger energisch als andere Gläubiger und setzten so teilweise die Subventionierung von Unternehmen verdeckt fort. Die schwache Stellung der gesicherten Gläubiger im Insolvenzverfahren ist weiterhin unbefriedigend. Eine Besserstellung dieser Gruppe könnte den Unternehmen einen leichteren Zugang zu Krediten eröffnen und damit positive Impulse für die Fortsetzung der realwirtschaftlichen Transformation liefern.
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