Regional Determinants of MNE’s Location Choice in Post-transition Economies
Andrea Gauselmann, Philipp Marek
Empirica,
No. 4,
2012
Abstract
This article focuses on the impact of agglomeration and labour market factors on the location choice of MNEs in post-transition economies. We compare data from 33 regions in East Germany, the Czech Republic and Poland using a mixed logit model on a sample of 4,343 subsidiaries for the time period between 2000 and 2010. The results show that agglomeration advantages, such as sectoral specialization as well as a region’s economic and technological performance prove to be some of the most important pull factors for FDI in post-transition regions.
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The Technological Role of Inward Foreign Direct Investment in Central East Europe
Johannes Stephan
The Technological Role of Inward Foreign Direct Investment in Central East Europe,
2011
Abstract
Foreign direct investment (FDI) assumed a prominent role in Central East Europe (CEE) early on in the transition process. Foreign investors were assigned the task of restructuring markets, providing capital and knowledge for investment in technologically outdated and financially ailing firms.
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Regional Determinants of MNE´s Location Choice in Transition Economies
Andrea Gauselmann, Philipp Marek
WIFO Working Papers,
No. 412,
2011
published in: Empirica
Abstract
The article at hand analyses the impact of agglomeration effects, labour market conditions and other determinants on the location choice of MNEs in transition economies. We compare data from 33 regions in East Germany, the Czech Republic and Poland using a conditional logit model on a sample of 4,343 subsidiaries for the time period between 2000 to 2010. The results show that agglomeration advantages, such as sectoral specialization, a certain economic diversity as well as a region’s economic and technological performance prove to be some of the most important pull factors for FDI in transition regions. In addition, the labour market factors prove to play an important role in the location of FDI.
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Germany on the Way to Energy Efficiency in the Housing Sector: Subsidy Programs by the Federal Government and the Länder Level
Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 11,
2011
Abstract
Als Ergänzung eines zunehmend rigider werdenden Ordnungsrechtes, welches die Mindestanforderungen festlegt, existiert auf der Ebene von Bund und Ländern ein breites Angebot von Förderprogrammen für die Sanierung energetisch relevanter Gebäudeteile. Der Bund fördert in diesem Zusammenhang energetisch hochwertige Sanierungsinvestitionen, welche über den Mindeststandard des Ordnungsrechtes hinausgehen. Während die Förderprogramme auf der Bundesebene – abgesehen von der Berücksichtigung unterschiedlicher Finanzierungsmodelle – für alle Investoren sowie für Gebäude, die älter als 15 Jahre sind, bundesweit die gleichen Rahmenbedingungen anlegen, zeigen die Bundesländer eine differenziertere Ausgestaltung ihrer Förderpolitik, die spezifische Faktoren der regionalen Wohnungsmärkte berücksichtigt. Eine Analyse der Wirkung dieser Förderlandschaft auf die regionale Sanierungsaktivität wird Thema weiterer Forschungen sein.
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Industrial Associations as a Channel of Business-Government Interactions in an Imperfect Institutional Environment: The Russian Case
A. Yakovlev, A. Govorun
IWH Discussion Papers,
No. 16,
2011
Abstract
International lessons from emerging economies suggest that business associations may provide an effective channel of communication between the government and the private sector. This function of business associations may become still more important in transition economies, where old mechanisms for coordinating enterprise activities have been destroyed, while the new ones have not been established yet. In this context, Russian experience is a matter of interest, because for a long time, Russia was regarded as a striking example of state failures and market failures. Consequently, the key point of our study was a description of the role and place of business associations in the presentday
Russian economy and their interaction with member companies and bodies of state
administration. Relying on the survey data of 957 manufacturing firms conducted in
2009, we found that business associations are more frequently joined by larger companies, firms located in regional capital cities, and firms active in investment and innovation. By contrast, business associations tend to be less frequently joined by business groups’ subsidiaries and firms that were non-responsive about their respective ownership structures. Our regression analysis has also confirmed that business associations are a component of what Frye (2002) calls an “elite exchange”– although only on regional and local levels. These “exchanges” imply that members of business associations, on the one hand, more actively assist regional and local authorities in social development of their regions, and on the other hand more often receive support from authorities. However, this effect is insignificant in terms of support from the federal government. In general, our results allow us to believe that at present, business associations (especially the
industry-wide and “leading” ones) consolidate the most active, advanced companies and act as collective representatives of their interests. For this reason, business associations can be regarded as interface units between the authorities and businesses and as a possible instrument for promotion of economic development.
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MNE’s Regional Location Choice - A Comparative Perspective on East Germany, the Czech Republic and Poland
Andrea Gauselmann, Philipp Marek, J. P. Angenendt
IWH Discussion Papers,
No. 8,
2011
published in: Empirica
Abstract
The focus of this article is the empirical identification of factors influencing Foreign Direct Investment (FDI) in transition economies on a regional level (NUTS 2). The analysis is designed as benchmark between three neighboring post-communist regions, i.e. East Germany, the Czech Republic and Poland. Their different transition paths have not only resulted in economic differences. We can also observe today that the importance of pull factors for FDI varies significantly across the regions. This analysis shows that in comparison with Poland and the Czech Republic, East Germany’s major benefit is its purchasing power, its geographical proximity to West European markets, and its modern infrastructure. Furthermore, the analysis suggests that intra-industry linkages such as specialization and agglomeration economies are relevant factors for the location decision of foreign investors. This result can help to explain the regional divergence of FDI streams in transition economies.
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Informed and Uninformed Investment in Housing: The Downside of Diversification
Elena Loutskina, Philip E. Strahan
Review of Financial Studies,
No. 5,
2011
Abstract
Mortgage lenders that concentrate in a few markets invest more in information collection than diversified lenders. Concentrated lenders focus on the information-intensive jumbo market and on high-risk borrowers. They are better positioned to price risks and, thus, ration credit less. Adverse selection, however, leads to higher retention of mortgages relative to diversified lenders. Finally, concentrated lenders have higher profits than diversified lenders, their profits vary less systematically, and their stock prices fell less during the 2007—2008 credit crisis. The results imply that geographic diversification led to a decline in screening by lenders, which likely played a role in the 2007–2008 crisis.
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State Aid in the Enlarged European Union. An Overview
Jens Hölscher, Nicole Nulsch, Johannes Stephan
Abstract
In the early phase of transition that started with the 1990s, Central and Eastern European Countries pursued economic restructuring of the enterprise sector that involved massive injections of state support. Also foreign investment from the West and facilitation of the development of a market economy involved massive injections of state support. With their accession to the European Union (EU), levels and forms of state aid came under critical review by the European Commission. This inquiry investigates whether the integration of the new member states operates on a level playing field with respect to state aid. Quantitative and qualitative analysis is relied upon to answer this key, as well as other, related questions. Findings suggest that in recent years a level playing field across the EU has indeed emerged. State aid in the new EU member countries is rather handled more strictly than laxer compared to the ‘old’ EU countries.
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Governmental Learning as a Determinant of Economic Growth
Marina Grusevaja
IWH Discussion Papers,
No. 23,
2010
Abstract
Systemic economic transition is a process of determined radical institutional change, a process of building new institutions required by a market economy. Nowadays, the experience of transition countries with the implementation of new institutions could be reviewed as a method of economic development that despite similar singular steps has different effects on the domestic economic performance. The process of institutional change towards a market economy is determined by political will, thus the government plays an important role in carrying out the economic reforms. Among the variety of outcomes and effects the attention is drawn especially to economic growth that diverges significantly in different post-transition countries. The paper attempts to shed light upon the problem on the basis of institutional economics, of economics of innovation and partially of political economy of growth using an evolutionary, process-oriented perspective. In this context the issue central to the promotion of economic growth is the successful implementation of new institutions through governmental activities. The paper shows that under the conditions of bounded rationality and radical uncertainty economic growth is determined, inter alia, by the capacity for governmental learning.
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Investor Rationality and House Price Bubbles: The Case of Berlin and the German Reunification
Oliver Holtemöller, R. Schulz
German Economic Review,
2010
Abstract
We analyze the behavior of investors in the Berlin rental apartment house market over the years 1980–2004. Using constant-quality multipliers (price–rent ratios), we reject the hypothesis that multipliers in the market were set in a rational manner. Supported by narrative evidence, we conjecture that investors misjudged the economic effects of the German reunification. To examine this, we employ a stylized structural economic model and analyze the effects of shocks on rational multipliers. It seems that investors confused the reunification with a permanent supply side shock to the economy. By basing their investment decisions on this misjudgement, investors behaved irrationally, but in a very uncertain and unprecedented environment.
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