International Trade Patterns and Labour Markets – An Empirical Analysis for EU Member States
Götz Zeddies
International Journal of Economics and Business Research,
2012
Abstract
During the last decades, international trade flows of the industrialized countries became more and more intra-industry. At the same time, employment perspectives particularly of the low-skilled by tendency deteriorated in these countries. This phenomenon is often traced back to the fact that intra-industry trade (IIT), which should theoretically involve low labour market adjustment, became increasingly vertical in nature. Against this background, the present paper investigates the relationship between international trade patterns and selected labour market indicators in European countries. As the results show, neither inter- nor vertical intra-industry trade (VIIT) do have a verifiable effect on wage spread in EU member states. As far as structural unemployment is concerned, the latter increases only with the degree of countries’ specialization on capital intensively manufactured products in inter-industry trade relations. Only for unemployment of the less-skilled, a slightly significant impact of superior VIIT seems to exist.
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Internationalisation Theory and Technological Accumulation - An Investigation of Multinational Affiliates in East Germany
Björn Jindra
Studies in Economic Transition, London,
2012
Abstract
The integration of post-communist countries into the European and global economy after 1990 has led to a renewed interest in the role of multinational enterprises (MNEs) in economic restructuring and technological development. This book explains the expansion of MNEs into a transition economy from the technology accumulation perspective. Key assumptions of the technological accumulation approach towards firms' internationalisation are tested, using the examples of foreign and West German MNEs in East Germany. The effects of technological externalities on MNE location choice are analysed, in addition to an exploration of the factors driving the location of foreign affiliates' research and development (R&D) and innovation activities. The book provides a novel and comprehensive empirical approach to assess the developmental role of MNEs, deriving significant economic policy implications for transition and emerging economies.
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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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A New Metric for Banking Integration in Europe
Reint E. Gropp, A. K. Kashyap
Europe and the Euro,
2010
Abstract
Most observers have concluded that while money markets and government bond markets are rapidly integrating following the introduction of the common currency in the euro area, there is little evidence that a similar integration process is taking place for retail banking. Data on cross-border retail bank flows, cross-border bank mergers and the law of one price reveal no evidence of integration in retail banking. This paper shows that the previous tests of bank integration are weak in that they are not based on an equilibrium concept and are neither necessary nor sufficient statistics for bank integration. The paper proposes a new test of integration based on convergence in banks' profitability. The new test emphasises the role of an active market for corporate control and of competition in banking integration. European listed banks profitability appears to converge to a common level. There is weak evidence that competition eliminates high profits for these banks, and underperforming banks tend to show improved profitability. Unlisted European banks differ markedly. Their profits show no tendency to revert to a common target rate of profitability. Overall, the banking market in Europe appears far from being integrated. In contrast, in the U.S. both listed and unlisted commercial banks profits converge to the same target, and high profit banks see their profits driven down quickly.
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Investment (FDI) Policy for Azerbaijan, Final report
Jutta Günther, Björn Jindra
Einzelveröffentlichungen,
Nr. 4,
2009
Abstract
The report has been prepared on behalf of the Association for Technical Cooperation (GTZ) as integral part of the “Private Sector Development Program” run by the GTZ in Azerbaijan. A comprehensive investment policy is outlined with particular focus on the possibilities to attract foreign direct investment (FDI) in Azerbaijan’s manufacturing industry (non-oil sector). The report makes particular reference to the experiences with investment policy development in Central and East European transition economies. It touches legal and institutional framework conditions in Azerbaijan as well as possible investment incentives schemes including investment promotion. Major recommendations refer to trade integration within the region, introduction of tax incentives as well as further improvements in business climate. Furthermore, the importance of complementary policies, such as competition and education policy, is stressed.
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Is the European Monetary Union an Endogenous Currency Area? The Example of the Labor Markets
Herbert S. Buscher, Hubert Gabrisch
IWH Discussion Papers,
Nr. 7,
2009
Abstract
Our study tries to find out whether wage dynamics between Euro member countries became more synchronized through the adoption of the common currency. We calculate bivarate correlation coefficients of wage and wage cost dynamics and run a model of endogenously induced changes of coefficients, which are explained by other variables being also endogenous: trade intensity, sectoral specialization, financial integration. We used a panel data structure to allow for cross-section weights for country-pair observations. We use instrumental variable regressions in order to disentangle exogenous from endogenous influences. We applied these techniques to real and nominal wage dynamics and to dynamics of unit labor costs. We found evidence for persistent asymmetries in nominal wage formation despite a single currency and monetary policy, responsible for diverging unit labor costs and for emerging trade imbalances among the EMU member countries.
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Excess Volatility in European Equity Style Indices - New Evidence
Marian Berneburg
IWH Discussion Papers,
Nr. 16,
2006
Abstract
Are financial markets efficient? One proposition that seems to contradict this is Shiller’s finding of excess volatility in asset prices and its resulting rejection of the discounted cash flow model. This paper replicates Shiller’s approach for a different data set and extends his analysis by testing for a long-run relationship by means of a cointegration analysis. Contrary to previous studies, monthly data for an integrated European stock market is being used, with special attention to equity style investment strategies. On the basis of this analysis’ results, Shiller’s findings seem questionable. While a long-run relationship between prices and dividends can be observed for all equity styles, a certain degree, but to a much smaller extent than in Shiller’s approach, of excess volatility cannot be rejected. But it seems that a further relaxation of Shiller’s assumptions would completely eliminate the finding of an overly strong reaction of prices to changes in dividends. Two interesting side results are, that all three investment styles seem to have equal performance when adjusting for risk, which by itself is an indication for efficiency and that market participants seem to use current dividend payments from one company as an indication for future dividend payments by other firms. Overall the results of this paper lead to the conclusion that efficiency cannot be rejected for an integrated European equity market.
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Progressivity and flexibility in developing an effective competition regime: using experiences of Poland, Ukraine and South Africa for developing countries. Forschungsbericht innerhalb des EU-Projektes: Competition Policy Foundations for Trade Reform, Regulatory Reform, and Sustainable Development, 2005
Franz Kronthaler, Johannes Stephan
Einzelveröffentlichungen,
Nr. 5,
2005
Abstract
The paper discusses the role of the concept of special and differential treatment in the framework of regional trade agreements for the development of a competition regime. After a discussion of the main characteristics and possible shortfalls of those concepts, three case countries are assessed in terms of their experience with progressivity, flexibility, and technical and financial assistance: Poland was led to align its competition laws to match the model of the EU. The Ukraine opted voluntarily for the European model, this despite its intense integration mainly with Russia. South Africa, a developing country that emerged from a highly segregated social fabric and an economy dominated by large conglomerates with concentrated ownership. All three countries enacted (or comprehensively reformed) their competition laws in an attempt to face the challenges of economic integration and catch up development on the one hand and particular social problems on the other. Hence, their experience may be pivotal for a variety of different developing countries who are in negotiations to include competition issues in regional trade agreements. The results suggest that the design of such competition issues have to reflect country-particularities to achieve an efficient competition regime.
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Enhanced Cooperation in an Enlarged EU, CeGE-Discussion Paper No. 53
J. Ahrens, Renate Ohr, Götz Zeddies
,
2006
Abstract
The paper adresses the need for more flexibility in the integration process of the European Union after its recent eastward enlargement. Due to the increasing number of decision-makers and the increasing heterogeneity of economic structures, financial constraints, societal preferences, and political interests, European integration based on the uniformity principle is hardly feasible. In order to avoid a rank growth of integration and yet to strengthen the momentum of flexibility, so-called enhanced cooperation appears to be an appropriate instrument to be applied to the overall integration process. In this context the paper analyzes different possible developments of selected common policies in the EU if enhanced cooperation is practised by a sub-group of EU-members. Based on cluster analysis similarities and distinctions among the EU members with respect to some specific policy realms are elaborated to identify clusters, or clubs, of countries which may apply the instrument of enhanced cooperation in the specific policy fields.
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