What are the Long-Term Benefits of the Economic Stimulus Package II for German Local Governments? – The Case of Saxony
Peter Haug
Wirtschaft im Wandel,
No. 4,
2010
Abstract
This article deals with the question whether the investments subsidized by the economic stimulus package II („Konjunkturpaket II“) do not only have short-term effects on demand but also long-term effects e.g. on local economic growth. As far as the short-term effects are concerned, the case of the German state of Saxony shows – with some delay – a rise in local government´s investments. Hence, the time-lag problem inherent in all governmental spending programmes seems to keep within reasonable limits. Up to now there have been no signs of inflationary price tendencies in the construction sector.
According to - for example - the „new“ economic growth theory, one ought to be sceptical about the long-term effects of the projects supported by the programme: Even for genuine public intermediate goods the withdrawal effects of financing have to be weighed against the positive effects on private enterprise sector productivity. Furthermore, the effects on factor prices caused by the investment grants might encourage the excess use of physical capital in public production.
This sceptical attitude of the theory is confirmed for Saxony by the fact that primarily public consumption goods (sports and leisure facilities) or educational facilities (kindergartens, primary schools), which are of no direct relevance to the local enterprises, are supported by the programme. Investments in vocational training, research and development play only a minor role at the local government level or are explicitly excluded from the programme.
Especially because of the incentives to misallocate public resources it is recommended to rely on unconditional grants in future support programmes. Then the local governments could use the grants for either „investments” in human capital (new [fixed-term contract] hires, qualification) or in physical capital, according to their needs.
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Specialization, Diversity, Competition and their Impact on Local Economic Growth in Germany
Martin T. W. Rosenfeld, Annette Illy, Michael Schwartz, Christoph Hornych
Abstract
This study systematically examines the impact of fundamental elements of urban economic structure on urban growth in Germany from 2003 to 2007. We test four elements simultaneously, that is sectoral specialization, diversification of economic activities, urban size as well as the impact of local competition. To account for the effect of varying spatial delimitations in the analysis of urban growth, we further differentiate between cities and planning regions as geographical units. The analysis covers manufacturing industries as well as service sectors. Most previous work produces inconsistent results and concentrates on localization economies and/or diversification, while urban size and the effect of local competition are widely ignored. Our regression results show a U-shaped relationship between localization economies and urban growth and positive effects of local competition on urban growth. With respect to diversification, we find positive effects on urban growth on the city-level, but insignificant results on the level of the planning regions. The impact of urban size also differs between free cities and planning regions; in the former a U-shaped relationship is found whereas the effect is inversely U-shaped for the latter.
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Change in East German Firm Level Export Determinants
Birgit Schultz
Wirtschaft im Wandel,
No. 3,
2010
Abstract
Exports have a ‘motor of growth’ status for the German economy. They both save and increase employment and provide wealth. However, only a minority of East German manufacturing and construction firms realize sales in foreign countries. The paper analyses for two points in time the influences of firm level export factors on the level of export activities of East German firms, and how the strength of the influence has changed over time. We found export sales especially in firms who are integrated in international corporate groups and are highly specialized. Economies of scale (firm size) increase the export share. Additionally, export sales also depend on wages. These findings are in line with current analysis in the field of international trade. While the above factors are found to be stable over time some others have changed in importance. In 2000 the industrial sector and the unit labor costs were important factors in determining export activities. In 2008 these factors have lost importance. Instead, human capital and investments have achieved significance.
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Unternehmensnetzwerke in der Photovoltaik-Industrie – Starke Verbundenheit und hohe Kooperationsintensität
Christoph Hornych, Matthias Brachert
Wirtschaft im Wandel,
No. 1,
2010
Abstract
The Photovoltaic-(PV)-Industry is a comparatively new industrial sector which is affected by high level of uncertainty. This uncertainty is derived from different technology paths as same as uncertainty about the future market developments. Important instruments to come up with uncertainty are firm networks. Thereby the state of the knowledge about the degree of interconnectedness between the German PV-industry is poor. This article aims to close this gap by giving an overview about the integration of PV-enterprises in firm networks.
The empirical analysis of the network structure of the German PV-industry thereby confirms the expected high level of network relations. Almost nine out of ten firms cooperate with other PV-firms in Germany. Also, the intensity of cooperation turns out to be above the average compared to other industrial sectors. On average one PV-firm cooperates with 5.8 other PV-firms. This indicates possibilities for a better knowledge exchange in the sector. Overall the high cooperation intensity supports the assumption that PV-industry is able to benefit from the spatial concentration of the industry in the region.
Despite the dense network which has already emerged, the promotion of networks can still be an efficient paradigm to support innovativeness and growth in this sector. This is going to be even more successful if the results of the network analysis are integrated into the government supporting scheme.
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Poland Weathers the Crisis
Martina Kämpfe
Wirtschaft im Wandel,
No. 12,
2009
Abstract
Expansion of economic activity in Poland in 2009 continued at a markedly lower level compared to previous years, but despite the falling external and domestic demand, economic recession did not happen until now. Early stabilisation measures, supported also by the European Community (EC) and the International Monetary Fund (IMF), helped to avoid substantial instabilities in the financial sector. It seems that Poland is not as hardly affected by the financial crisis as other countries. Unlike previous years, now net exports were the main driving force for growth – they more than compensated the decrease in domestic demand.
Unemployment had risen up from the lowest level in the last decade, but still moderately due to measures of job security. Given the further shrinking labour demand, unemployment will increase despite modest economic activity. Fiscal policy has to meet challenges under the current economic crises: Excess expenditure and deficiency in receipts will deteriorate general government deficit in 2009 and 2010. Without adopted consolidation strategy, Polish convergence to the Euro area will have to be postponed.
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The Manufacturing Sector in East Germany on a Path from De-industrialization to Re-industrialization: Are there Economically Sustainable Structures?
Gerhard Heimpold
Wirtschaft im Wandel,
20 Jahre Deutsche Einheit - Teil 1 -
2009
Abstract
The contribution comprises an analysis how the manufacturing sector in East Germany has developed in the post-transition period after 1990. A set of economic performance indicators is used. The analysis shows a considerable growth of gross value added and productivity. However, the growth of productivity occurred at the expense of employment. On average, in 2008, the East German manufacturing sector reached 4/5th of the productivity level of the West German level. As far as the endowment with growth determinants is concerned, the manufacturing industry in the New German Länder has undertaken considerable efforts to modernize its fixed capital stock. The endowment with human capital measured by the proportion of employees possessing a university degree is as high as in the western part of Germany. However, the investigation reveals a number of deficits, too. Data on Research and Development (R&D) expenditures and R&D staff in the manufacturing sector reveal, on average, lower R&D activities in the East German manufacturing sector. This is resulting from specific structures of the East German manufacturing sector: dominance of small firms, lack of large firms possessing headquarters and conducting own R&D. Complementary, the share of technology-driven industries is lower, and the proportion of labor intensive industries is larger in comparison with the West German manufacturing sector. In addition, an investigation of functional structures of employment reveals a proportion of employment in production functions which is above the West German average, whereas the opposite is the case with the proportion of employment in service functions. For further strengthening the East German manufacturing sector, structural change toward technology-intensive and human capital-intensive economic activities has to be continued.
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New Growth and Poverty Alleviation Strategies for Africa – Institutional and Local Perspectives. African Development Perspectives Yearbook, Vol. 14
Tobias Knedlik, Karl Wohlmuth, Philippe Burger, Achim Gutowski, Mareike Meyn, T. (eds) Urban, Afeikhena Jerome
,
2009
Abstract
The Volume XIV analyses the “New Growth and Poverty Alleviation Strategies for Africa“. Institutional issues and perspectives in designing new growth and poverty alleviation strategies are considered in various case studies (Cote d'Ivoire, Nigeria, Botswana and Tanzania). Other studies deal with institutional problems of resource-rich countries after conflict (Sudan) and with the institutions to enhance environmental protection parallel to economic growth and poverty reduction (Niger). Further studies deal with institutions to bridge the gap between formal and informal entrepreneurial sectors in Kenya and Tanzania. Local issues and perspectives for designing new growth and poverty alleviation strategies are considered in case studies on rural-urban development gaps in Tanzania and on microfinance as an instrument for new growth and poverty alleviation strategies (Tanzania and Eritrea). A study on small farmers in Ghana provides information on the role they can play in value chains. Two studies on Nigeria highlight the local and the sub-regional health and poverty alleviation programmes and the relation to growth. Book reviews and book notes on the theme are part of the volume. This volume builds the foundation for a comprehensive strategy of policy reforms in Africa so as to integrate new growth and poverty alleviation strategies. Complementary to Volume XIV is Volume XIII on “New Growth and Poverty Alleviation Strategies for Africa - Interational and Regional Perspectives“. Both volumes are of importance for all those who work in African countries as officials, executives, managers, researchers, and policy-makers, but also for all those who actively support Africa's development concerns at the international, regional, country, local, and project levels. They will experience this Volume XIV and also the complementary Volume XIII as indispensable sources of insight, reference, and inspiration.
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Finanzielle Instabilität und Krise in den Post-Transformations-Ländern
Hubert Gabrisch
Wirtschaftspolitische Blätter,
No. 3,
2009
Abstract
Contagion was only the trigger of the unexpectedly severe crisis in European post-transition countries. Rather, increasing financial fragility of the countries since 2001, after their banking and financial sector was overtaken by international financial institutions, was the origin. Euphoric expectations induced an asset price inflation followed by an increasing debt burden of the private sector, which was fueled by net capital inflows. This study argues that simple concepts of demand reduction do not offer any way out of the crisis. A second transition is necessary, which establishes a new growth model being robust against speculative capital flows and offering high growth rates.
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Industrielle Cluster als Ursache regionaler Prosperität? Zur Konvergenz deutscher Arbeitsmarktregionen 1996-2005
Alexander Kubis, Matthias Brachert, Mirko Titze
Raumforschung und Raumordnung,
/6
2009
Abstract
This paper explores the impact of industrial clusters on regional growth at level of Germany’s functionally defined labour market regions (AMR) within a regional convergence model. It focuses especially on the role of the co-location of vertically connected industrial sectors. Based on works of Schnabl (2000) it is possible to identify three different effects of industrial clusters on regional economic performance. Beside the effect of regionally concentrated economic sectors (horizontal clusters) and value adding chains (vertical clusters) on the region itself, we are able to control for regional spillover effects of industrial clusters. Further the study allows the isolated examination of the impact of industrial cluster while taking regional convergence into consideration. It is possible to demonstrate positive growth effects of industrial clusters along with an overall process of convergence as same as with a specific eastern one. Therefore industrial cluster present an opportunity to explain deficits within the process of East-West-Convergence. Their relative absence of industrial clusters in Eastern Germany influences the growth potential in a negative way.
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