Economic Capability of East German Regions: Results of a Cluster Analysis
Franz Kronthaler
Regional Studies,
No. 6,
2005
Abstract
This paper analyses the economic capability of East German regions compared with West German regions. Based on new growth theory and new economic geography, and using relevant empirical literature, regions are clustered according to a set of growth factors. The clustering results find little evidence that the economic capability of East German regions is already comparable with West German regions. Economic disadvantages are particularly rooted in lower technical progress, a lack of entrepreneurship, lower business and industrial concentration, and a loss of human capital. However, there are a few East German regions with a high economic capability, but even those suffer from economic disadvantages such as lower technical progress, lower industrial activity and a poorer regional accessibility.
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Analysis of statements made in favour of and against the adoption of competition law in developing and transition economies
Johannes Stephan, Franz Kronthaler, Frank Emmert
Einzelveröffentlichungen,
No. 9,
2005
Abstract
The paper is concerned with documenting and assessing statements made by policymakers, opinion formers, and other stakeholders in favour and against the adoption of competition laws with particular reference to transition and developing countries which have not yet enacted these kind of laws. For example, claims that competition enforcement might reduce the inflow of foreign direct investment, or that other policies are successfully used as substitutes for competition law, are assessed. In a first step, the method of generalized analysis structures the list of statements around core issues of common features to make them accessible to further interpretation and assessment. The paper shows that some claims are in fact country or region specific, and specific to the development level of the respective countries. In a second step, the core issues are assessed according to economic and legal criteria. Since the analysis focuses on transition and developing countries, the criteria for economic assessment are predominantly economic growth and development issues, but also include the economic coherency of a set of claims submitted by stakeholders in a given country. The criteria for legal assessment include whether claims are problematic in light of WTO-principles, or are even born out of a political objective which is incompatible with the spirit, if not the letter of WTO-rules.
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The Role of Regional Knowledge Sources for Innovation – An Empirical Assessment
Michael Fritsch, Viktor Slavtchev
Freiberg Working Papers, Nr. 15-2005,
No. 15,
2005
Abstract
Wir untersuchen die Bedeutung verschiedener Inputs, insbesondere verschiedener Wissensquellen, für den regionalen Output an Erfindungen (Patente) mithilfe einer Wissensproduktionsfunktion. Als Wissensquellen werden die FuE-Beschäftigte im Privatsektor, die Größe der Universitäten und Fachhochschulen sowie das Volumen der von ihnen aus verschiedenen Quellen eingeworbenen Drittmittel berücksichtigt. Die Bedeutung dieser Wissensquellen wurde systematisch auf der Ebene der westdeutschen Kreise getestet, wobei Informationen sowohl über den jeweiligen Kreis als auch über die Nachbarkreise einbezogen wurden. Es stellt sich heraus, dass von der Qualität der in den Universitäten und Fachhochschulen betriebenen Forschung ein signifikanter Einfluss auf die regionale Innovationstätigkeit ausgeht. Die reine Größe der Universitäten und Fachhochschulen in der Region hat hingegen keinen Einfluss. Darüber hinaus ermitteln wir Unterschiede nach Herkunft von Drittmitteln sowie Unterschiede in der Bedeutung verschiedener Fachdisziplinen für regionale Innovationsaktivitäten. Wissensspillover sind im Wesentlichen auf die angrenzenden Kreise begrenzt.
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The Contestable Markets Theory - Efficient Advice for Economic Policy
Christian Growitsch, Thomas Wein
Externe Publikationen,
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.
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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.).
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Effects of the Joint Task Improvement of Regional Economic Structures on Investment Activities - An Individual Analysis of Companies in the East German Manufacturing Sector
Andreas Stierwald, Jürgen Wiemers
IWH Discussion Papers,
No. 185,
2003
Abstract
Die Investitionstätigkeit in Ostdeutschland ist durch massive staatliche Förderung gekennzeichnet. Die mit Abstand wichtigsten Instrumente, hinsichtlich des Fördervolumens sowie der Inanspruchnahme durch die Betriebe, sind die Investitionszulage und die Gemeinschaftsaufgabe zur „Verbesserung der regionalen Wirtschaftsstruktur“ (GA). In diesem Beitrag wird der Einfluss untersucht, die die Teilnahme an der Gemeinschaftsaufgabe auf die Investitionshöhe ausübt. Das dabei auftretende Problem der Selbstselektion wird mit Hilfe eines Selektionsmodells gelöst. Auf der ersten Stufe wird mit einem Probitmodell die Teilnahmewahrscheinlichkeit an der GA-Förderung geschätzt.
Daran anschließend wird die Investitionshöhe der Betriebe erklärt, u.a. durch
die Teilnahme bzw. Nichtteilnahme an der GA-Förderung. Dabei stellt sich heraus, dass die Fördervariable im betrachteten Zeitraum einen signifikant positiven Effekt sowohl auf die Investitionen je Beschäftigten als auch auf die Investitionen je Umsatzeinheit ausübt, die GA-Förderung also investitionssteigernd wirkte.
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Differences between German regions with respect to growth factors: a comparison based on a cluster analysis
Franz Kronthaler
Wirtschaft im Wandel,
No. 13,
2003
Abstract
Der Beitrag untersucht vor dem Hintergrund der Diskussion über die Neuordnung der deutschen und europäischen Regionalpolitik, welche Unterschiede in der Ausstattung mit Wachstumsfaktoren zwischen den deutschen Regionen bestehen. Auf der Grundlage einer Clusteranalyse wurden die deutschen Regionen zehn Clustern, die jeweils durch unterschiedliche Ausstattungsmerkmale charakterisiert sind, zugeordnet. Dabei zeigt sich, dass kein Cluster auftritt, in dem sich sowohl west- als auch ostdeutsche Regionen befinden. Bei einer näheren Betrachtung der Cluster, die sich aus ostdeutschen Regionen zusammensetzen, deutet sich an, dass ein Großteil dieser Regionen erst über eine unterdurchschnittliche Ausstattung mit den meisten Wachstumsfaktoren verfügt. Teilweise ähnliche Ausstattungsmerkmale zeigen sich aber auch bei zahlreichen nord- und westdeutschen Regionen. Demgegenüber zeigt sich bei einer kleinen Gruppe von ostdeutschen Regionen, insbesondere bei den Regionen mit bedeutenden Agglomerationen, bereits eine günstigere Ausstattung bei vielen Wachstumsfaktoren. Aber im Vergleich zum gesamtdeutschen Durchschnitt gibt es auch in diesen Regionen noch verschiedene Schwächen.
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A Study of the Competitiveness of Regions based on a Cluster Analysis: The Example of East Germany
Franz Kronthaler
IWH Discussion Papers,
No. 179,
2003
Abstract
This paper examines whether some East German regions have already achieved the same economic capability as the regions in West Germany, so that they are on a competitive basis with the West German regions and are able to reach the same economic level in the long run. If this is not the case, it is important to know more about the reasons for the economic weakness of the East German regions twelve years after unification.
The study is based on a cluster analysis. Criteria for the cluster formation are several economic indicators, which provide information about the economic capability of regions. The choice of the indicators is based on a review of results of the theoretical and empirical literature on the new growth theory and new economic geography.
The results show that most of the East German regions have not yet reached the economic capability and competitiveness of their West German counterparts so that they - from the viewpoint of the new growth theory and the new economic geography - are not in the position to reach the same economic level. According to these theories economic disadvantages are most notably the consequences of less technical progress, a lack of entrepreneurship and fewer business concentration. Under these points it is especially noteworthy that young well educated people leave these East German regions so that human capital might will turn into a bottle-neck in the near future. Only a few regions in East Germany - those with important agglomerations - are comparable to West German regions that are characterised by average capability and competitiveness, but not to those with above average economic capability and competitiveness. Even those more advanced East German regions still suffer from a slower technical progress.
There are important policy implications based on these results: regional policy in East Germany was not able to assist raising all regions to a sufficient level of competitiveness. It may be more effective to concentrate the regional policy efforts on a selection of important agglomerations. This has also strong implications for the EU regional policy assuming that the accession countries will have similar problems in catching up to the economic level of the EU as have the East German regions.
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Regional economic effects of hosting the Olympic Games 2012 in Leipzig and its partner towns - An analysis of infrastructure investments
Peter Franz, Franz Kronthaler
IWH-Sonderhefte,
No. 1,
2003
Abstract
Die Stadt Leipzig hat sich zusammen mit Chemnitz, Dresden, Halle und Riesa um die Austragung der Olympischen Spiele 2012 beworben und konnte sich bei der Entscheidung des Nationalen Olympischen Komitees am 12. April 2003 gegen ökonomisch weitaus stärkere westdeutsche Städte durchsetzen. Mit der Ausrichtung der Großveranstaltung erhoffen sich die Städte deutliche Entwicklungsimpulse. Die Studie geht der Frage nach, in welchem Ausmaß sich das ökonomische Entwicklungsniveau der fünf Partnerstädte durch eine solche sportliche Großveranstaltung verändern würde. Wichtige Ergebnisse: Hinsichtlich der unmittelbar mit dem Ausbau der Infrastruktur verbundenen Arbeitsplatzeffekte sind für einen Zeitraum von zehn Jahren etwa 3 500 zusätzliche Arbeitsplätze zu erwarten. Die bisher für die Olympiade geplanten Infrastrukturinvestitionen werden nur teilweise dazu beitragen, wichtige infrastrukturelle Engpässe in der Region zu beseitigen. Gleichwohl hätten die geplanten Infrastruktureinrichtungen zur Wirkung, dass die Olympia-Region Leipzig auch nach 2012 als Austragungsort von sportlichen Großveranstaltungen attraktiv bliebe.
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A revised theory of contestable markets : applied on the German telecommunication sector
Christian Growitsch, Thomas Wein
Externe Publikationen,
No. 275,
2002
Abstract
Despite the scepticism raised by the German Monopoly Commission our analysis shows that the revised theory of contestable markets can be applied to the telecommunications market better than expected. The original contestable market theory implied three assumptions necessary to be satisfied to establish potential competition: Free market entry, market exit is possible without any costs, and the price adjustment lag exceeds 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 are satisfied for potential competition to exist. We applied the ‘revised’ contestable market theory to the German telecommunication market and have been able to clearly identify the value added stages in which regulation is required. Under the present conditions local loops - which can be determined as natural monopolies - are not contestable due to sunk costs, high entry lags expected and a probable short price adjustment lag. Local loops can be identified as monopolistic bottlenecks therefore. Regional and local connection networks should also be regulated because a high entry lag and a low price adjustment lag have to be expected as well as current competition does not exist today. The national connection network shows current competition between several network providers; hence regulation can be abolished in this field. Assumed that network access is regulated, services can be supplied by several competing firms.
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