Does the mere presence of big banks affect macroeconomic outcomes? In this paper, we develop a theory of granularity (Gabaix, 2011) for the banking sector, introducing Bertrand competition and heterogeneous banks charging variable markups. Using this framework, we show conditions under which idiosyncratic shocks to bank lending can generate aggregate fluctuations in the credit supply when the banking sector is highly concentrated. We empirically assess the relevance of these granular effects in banking using a linked micro-macro dataset of more than 80 countries for the years 1995-2009. The banking sector for many countries is indeed granular, as the right tail of the bank size distribution follows a power law. We then demonstrate granular effects in the banking sector on macroeconomic outcomes. The presence of big banks measured by high market concentration is associated with a positive and significant relationship between bank-level credit growth and aggregate growth of credit or gross domestic product.

From a theoretical point of view, it is traditionally assumed that foreign firms possess a centrally accumulated firm-specific technological advantage over domestic firms (see, for example, Findlay, 1978; Dunning, 1979). Given a sufficient level of absorptive capacity and human capital, domestic firms in host economies are able to benefit from various externalities stimulated by the presence of foreign firms.

The import penetration of exports has become a topic of public debate, particularly in the context of Germany’s position as one of the world’s leading exporters. The growth in the volume of intermediate products purchased from abroad for subsequent processing into export goods in Germany seems to be undermining the importance of exports as a driver of domestic production and employment. The gains that arise from an increase in exports seem to have been offset by the losses caused by the crowding out of local production by imports. Empirical evidence on the impact of this international integration of the goods market on the German labour market is ambiguous. Short-term negative effects on employment are claimed to be offset by the long-term benefit that the jobs lost in the short run will eventually be replaced by higher-skilled jobs with better

perspectives. Against this background, the following hypothesis is tested empirically: Germany is poor in natural resources, but rich in skilled labour. In line with the Heckscher- Ohlin theory, Germany should therefore specialize in the production of export goods and services that are relatively intensive in these factors and should import those goods and services that are relatively intensive in unskilled labour. The empirical part of the paper deals with the extent of the German export penetration by imports. At first, it analyses by what ways imports are affecting the exports directly and indirectly and shows the consequences of import penetration of exports for the national output and employment. Secondly, consequences for employment are split in different skill types of labour. These issues are discussed with the standard open static inputoutput- model. The data base is a time series of official input-output tables. The employment effects for Germany divided by skill types of labour are investigated using skill matrices generated by the authors.

Getrieben von der wachsenden Weltnachfrage sowie der Internationalisierung der nationalen Produktionsprozesse und begünstigt durch die Verbesserung der preislichen Wettbewerbsfähigkeit hat die deutsche Wirtschaft im Jahrzehnt vor der derzeitigen Weltfinanzkrise die Exportaktivitäten drastisch ausgeweitet. Im gleichen Zeitraum hat sich im Zuge der Tertiärisierung der Wirtschaft die Ausstattung der Produzenten mit Humankapital erhöht. Vor diesem Hintergrund geht die Studie dem qualitativen Wandel des Faktors Arbeit, gemessen an der formalen Qualifikation der Beschäftigten, bei der Entstehung der Exportgüter nach und vergleicht ihn mit dem Geschehen auf der Importseite. Die mit dem Input-Output-Modell und einer eigens dafür generierten Datenbasis erstmalig für das vereinigte Deutschland erzielten empirischen Ergebnisse weisen zwar auf einen in den deutschen Exporten verkörperten Vorteil hin, der jedoch gegenüber den Importen qualifikatorisch nur relativ gering ist. Unter Einschluss des seit Mitte der 90er Jahre anhaltenden Exportüberschusses ist dieser Vorteil jedoch, absolut betrachtet, recht groß. Das spricht für die Realisierung eines Humankapitalvorteils Deutschlands im Exportgeschäft.

This paper presents an alternative explanation of the gender pay gap resting on a simple Hotelling-style duopsony model of the labour market. Since there are only two employers, equally productive women and men have to commute and face travel cost to do so. We assume that some women have higher travel cost, e.g., due to more domestic responsibilities. Employers exploit that women on average are less inclined to commute and offer lower wages to all women. Since women's firm-level labour supply is for this reason less wage-elastic, this model is in line with Robinson's explanation of wage discrimination.

Exporters and multinationals are larger and more productive than their domestic

counterparts. In addition to productivity, financial constraints and labor market

constraints might constitute barriers to entry into foreign markets. We present new

empirical evidence on the extensive and intensive margin of exports and FDI based on detailed micro-level data of German firms. Our paper has three main findings. First, in line with earlier literature, we find a positive impact of firm size and productivity on firms’ international activities. Second, small firms suffer more frequently from financial constraints than bigger firms, but financial conditions have no strong effect on internationalization. Third, labor market constraints constitute a more severe barrier to foreign activities than financial constraints. Being covered by collective bargaining particularly impedes international activities.

The euro area is experiencing an unprecedented drop in economic activity in the first semester of 2009. Private consumption is expected to decrease by more than 1% compared with the same period a year earlier, investment by about 10%, and exports by 16%. The only support to aggregate demand comes from public consumption, which increases by 1.5%. We do not forecast any major improvement in the euro area economy for the rest of 2009. We expect a year on year decrease of 4.5% in the euro area Gross Domestic Product (GDP) for 2009, with a drop of 1.2% in private consumption, 9.4% in investment, and 14.9% in exports.

What determines a country’s ability to compete in international markets? What fosters the global competitiveness of its firms? And in the European context, have key elements of the EU strategy such as EMU and enlargement helped or hindered domestic firms’ competitiveness in local and global markets? We address these questions by calibrating and simulating a conceptual framework that, based on Melitz and Ottaviano (2005), predicts that tougher and more transparent international competition forces less productive firms out the market, thereby increasing average productivity as well as reducing average prices and mark-ups. The model also predicts a parallel reduction of price dispersion within sectors. Our conceptual framework allows us to disentangle the effects of technology and freeness of entry from those of accessibility. On the one hand, by controlling for the impact of trade frictions, we are able to construct an index of ‘revealed competitiveness’, which would drive the relative performance of countries in an ideal world in which all faced the same barriers to international transactions. On the other hand, by focusing on the role of accessibility while keeping ‘revealed competitiveness’ as given, we are able to evaluate the impacts of EMU and enlargement on the competitiveness of European firms. We find that EMU positively affects the competitiveness of firms located in participating economies. Enlargement has, instead, two contrasting effects. It improves the accessibility of EU members but it also increases substantially the relative importance of unproductive competitors from Eastern Europe. JEL Classification: F12, R13.

Angesichts der sich abzeichnenden Alterung der Erwerbsfähigen in Deutschland sowie der unzureichenden Arbeitsmarktchancen Älterer stellt sich die Frage, welchen Einfluß das Lebensalter auf die Produktivität von Beschäftigten ausübt. Aus gerontologischer Sicht ist - aufgrund gegenläufiger Entwicklungsverläufe von zentralen Leistungskomponenten - ein umgekehrt u-förmiger Verlauf des Alters-Produktivitäts-Profils zu erwarten. Das höchste Leistungsniveau sollte im Bereich der mittleren Jahrgänge erreicht werden, während sowohl die Jüngeren als auch die Älteren ein deutlich vermindertes Leistungsniveau aufweisen dürften. Zur Überprüfung dieser These wird der Linked-Employer-Employee-Datensatz des Instituts für Arbeitsmarkt und Berufsforschung (LIAB) herangezogen. Auf der Basis einer betrieblichen Produktionsfunktion wird mittels regressionsanalytischer Methoden getestet, ob und wie sich die Altersstruktur der Beschäftigten eines Betriebs auf dessen Produktivität auswirkt, wobei zwischen Unternehmen des Verarbeitenden Gewerbes und des Dienstleistungssektors unterschieden wird. Allgemein lassen die realisierten Querschnittsschätzungen des Jahres 2003 eine positive Korrelation des Anteils der Beschäftigten im mittleren Alter (35-44 Jahre) und der betrieblichen Produktivität erkennen. Im Verarbeitenden Gewerbe zeigt sich des weiteren ein negativer Zusammenhang zwischen Produktivität und Größe der jüngsten Altersgruppe (15-24 Jahre). Alles in allem spricht dies für einen umgekehrt u-förmigen Verlauf des Alters-Produktivitäts-Profils in diesem Sektor. Im Dienstleistungssektor hingegen wirkt bereits die jüngste Altersgruppe produktivitätsfördernd im Vergleich zur Referenzgruppe der 55-64jährigen.

Foreign direct investment as a means to support system transformation and the ongoing process of catching-up development has caught researcher’s attention for a number of Central and Eastern European countries. Not much research, however, has been carried out for East Germany in this respect although FDI plays an important role in East Germany too. Descriptive analysis by the use of unique survey data shows that foreign and West German affiliates perform much better with respect to technological capability and labor productivity than domestic companies in East Germany. The results of the regression analysis, however, show that it is not the status of ownership as such that forms a significant determinant of innovativeness in East Germany but rather general firms specific characteristics attached to it such as firm size, export-intensity, technical state of the equipment, and R&D activities. Due to the fact that foreign and West German affiliates perform better with respect to exactly all of these characteristics, they can be considered as a means to support the process of technological renewal and economic development.