29.09.2022 • 24/2022
The East German economy expanded strongly in the first half of 2022, but falls into recession in the second half of the year ‒ Implications of the Joint Economic Forecast Autumn 2022 and of Länder data from recent publications of the Statistical Office
The energy crisis is pushing the German economy into recession. This also affects the economy in East Germany. According to the Halle Institute for Economic Research (IWH), East German production will expand at a slightly stronger rate of 1.5% than in Germany as a whole. For the coming year, the decline in East Germany is expected to be less pronounced than in the west at 0.1% (Germany: ‒0.4%). For 2024, the economists forecast a growth of 1.7% (Germany: 1.9%).
Oliver Holtemöller
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26.01.2022 • 2/2022
Investment, output gap, and public finances in the medium term: Implications of the Second Supplementary Budget 2021
With the Second Supplementary Budget 2021, the German government plans to allocate a reserve of 60 billion euros to the Energy and Climate Fund. This additional spending is also meant to reduce the macroeconomic follow-up costs of the pandemic. According to the IWH’s medium-term projection, the expenditure is expected to increase output by about 0.5% at the peak of its impact in 2024. “While this macroeconomic effect is welcome, the additional investment will by no means compensate for the lack of investment activity since the beginning of the pandemic,” says Oliver Holtemöller, head of the Department Macroeconomics and vice president at Halle Institute for Economic Research (IWH). Moreover, the supplementary budget is likely to reduce confidence in the reliability of the debt brake.
Oliver Holtemöller
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25.01.2021 • 2/2021
High public deficits not only due to the pandemic – Medium-term options for fiscal policy
According to the IWH’s medium-term projection, Germany's gross domestic product will grow more slowly between 2020 and 2025 than before, not only because of the pandemic crisis, but also because the work force will decline. The resulting structural public deficits are, if the legal framework remains unchanged, likely to be higher than the debt brake allows. Consolidation measures, especially if they relate to government revenues, entail economic losses in the short term. “There is much to be said, also from a theoretical point of view, for not abolishing the debt brake, but for relaxing it to some extent,” says Oliver Holtemöller, head of the Department of Macroeconomics and vice president at Halle Institute for Economic Research (IWH).
Oliver Holtemöller
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Identifying Cooperation for Innovation―a Comparison of Data Sources
Michael Fritsch, Mirko Titze, Matthias Piontek
Industry and Innovation,
No. 6,
2020
Abstract
The value of social network analysis is critically dependent on the comprehensive and reliable identification of actors and their relationships. We compare regional knowledge networks based on different types of data sources, namely, co-patents, co-publications, and publicly subsidized collaborative R&D projects. Moreover, by combining these three data sources, we construct a multilayer network that provides a comprehensive picture of intraregional interactions. By comparing the networks based on the data sources, we address the problems of coverage and selection bias. We observe that using only one data source leads to a severe underestimation of regional knowledge interactions, especially those of private sector firms and independent researchers.
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Is Social Capital Associated with Corporate Innovation? Evidence from Publicly Listed Firms in the U.S.
Iftekhar Hasan, Chun-Keung (Stan) Hoi, Qiang Wu, Hao Zhang
Journal of Corporate Finance,
June
2020
Abstract
We find that social capital in U.S. counties, as captured by strength of social norms and density of social networks, is positively associated with innovation of firms headquartered in the county, as captured by patents and citations. This relation is robust in fixed-effect regressions, instrumental variable regressions with a Bartik instrument, propensity score matching regressions, and a difference-in-differences design that isolates the effects of over time variations in social capital due to corporate headquarter relocations. Strength of social norms plays a more dominant role than density of social networks in producing these empirical regularities. Cross-sectional evidence indicates the prominence of the contracting channel through which social capital relates to innovation. Additionally, we find that social capital is also positively associated with trademarks and effectiveness of corporate R&D expenditures.
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Comparing Financial Transparency between For-profit and Nonprofit Suppliers of Public Goods: Evidence from Microfinance
John W. Goodell, Abhinav Goyal, Iftekhar Hasan
Journal of International Financial Markets, Institutions and Money,
January
2020
Abstract
Previous research finds market financing is favored over relationship financing in environments of better governance, since the transaction costs to investors of vetting asymmetric information are thereby reduced. For industries supplying public goods, for-profits rely on market financing, while nonprofits rely on relationships with donors. This suggests that for-profits will be more inclined than nonprofits to improve financial transparency. We examine the impact of for-profit versus nonprofit status on the financial transparency of firms engaged with supplying public goods. There are relatively few industries that have large number of both for-profit and nonprofit firms across countries. However, the microfinance industry provides the opportunity of a large number of both for-profit and nonprofit firms in relatively equal numbers, across a wide array of countries. Consistent with our prediction, we find that financial transparency is positively associated with a for-profit status. Results will be of broad interest both to scholars interested in the roles of transparency and transaction costs on market versus relational financing; as well as to policy makers interested in the impact of for-profit on the supply of public goods, and on the microfinance industry in particular.
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Structural Stability of the Research & Development Sector in European Economies Despite the Economic Crisis
Jutta Günther, Maria Kristalova, Udo Ludwig
Journal of Evolutionary Economics,
No. 5,
2019
Abstract
When an external shock such as the economic crisis in 2008/2009 occurs, the interconnectedness of sectors can be affected. This paper investigates whether the R&D sector experienced changes in its sectoral integration through the recession. Based on an input-output analysis, it can be shown that the linkages of the R&D sector with other sectors remain stable. In some countries, the inter-sectoral integration becomes even stronger. Policy makers can be encouraged to use public R&D spending as a means of fiscal policy against an economic crisis.
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Measuring Job Creation, Growth, and Survival among the Universe of Start-ups in the United States Using a Combined Start-up Panel Data Set
Robert W. Fairlie, Javier Miranda, Nikolas Zolas
ILR Review,
No. 5,
2019
Abstract
The field of entrepreneurship is growing rapidly and expanding into new areas. This article presents a new compilation of administrative panel data on the universe of business start-ups in the United States, which will be useful for future research in entrepreneurship. To create the US start-up panel data set, the authors link the universe of non-employer firms to the universe of employer firms in the Longitudinal Business Database (LBD). Start-up cohorts of more than five million new businesses per year, which create roughly three million jobs, can be tracked over time. To illustrate the potential of the new start-up panel data set for future research, the authors provide descriptive statistics for a few examples of research topics using a representative start-up cohort.
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Do Smarter Teachers Make Smarter Students?
Eric A. Hanushek, Marc Piopiunik, Simon Wiederhold
Education Next,
No. 2,
2019
Abstract
Student achievement varies widely across developed countries, but the source of these differences is not well understood. One obvious candidate, and a major focus of research and policy discussions both in the United States and abroad, is teacher quality.
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04.03.2019 • 6/2019
New IWH publication takes stock: “United country – three decades after the Wall came down”
How is Germany’s economy faring 30 years after the fall of the Berlin Wall? A new publication by the Halle Institute for Economic Research (IWH) uses illustrative maps and graphs to show how the Federal Republic has developed compared to other countries and how economic unification has progressed. The publication presents many new findings, including on productivity differences between east and west, urban and rural development, as well as the availability of skilled labour.
Gerhard Heimpold
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