Can Korea Learn from German Unification?
Ulrich Blum
IWH Discussion Papers,
Nr. 3,
2011
Abstract
We first analyze pre-unification similarities and differences between the two Germanys and the two Koreas in terms of demographic, social, political and economic status. An important issue is the degree of international openness. “Stone-age” type communism of North Korea and the seclusion of the population prevented inner-Korean contacts and contacts with rest of the world. This may create enormous adjustment costs if institutions, especially informal institutions, change. We go on by showing how transition and integration interact in a potential unification process based on the World Bank Revised Minimum Standard Model (RMSM) and on the Salter-Swan-Meade model. In doing so, we relate the macro and external impacts on an open economy to its macro-sectoral structural dynamics. The findings suggest that it is of utmost importance to relate microeconomic policies to the macroeconomic ties and side conditions for both parts of the country. Evidence from Germany suggests that the biggest general error in unification was neglecting these limits, especially limitations to policy instruments. Econometric analysis supports these findings. In the empirical part, we consider unification as an “investment” and track down the (by-and-large immediate to medium-term) costs and the (by-and-large long-term) benefits of retooling a retarded communist economy. We conclude that, from a South-Korean
perspective, the Korean unification will become relatively much more expensive than the German unification and, thus, not only economic, but to a much larger degree political considerations must include the tying of neighboring countries into the convergence process. We finally provide, 62 years after Germany’s division and 20 years after unification, an outlook on the strength of economic inertia in order to show that it may take much more than a generation to compensate the damage inflicted by the communist system.
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Analyzing Innovation Drivers in the German Laser Industry: the Role of Positioning in the Social and Geographical Space
Muhamed Kudic, Peter Bönisch, Iciar Dominguez Lacasa
Abstract
Empirical and theoretical contributions provide strong evidence that firm-level performance outcomes in terms of innovativeness can either be determined by the firm’s position in the social space (network effects) or by the firm’s position in the geographical space (co-location effects). Even though we can observe quite recently first attempts in bringing together these traditionally distinct research streams (Whittington et al. 2009), research on interdependent network and geographical co-location effects is still rare. Consequently, we seek to answer the following research question: considering that the effects of social and geographic proximity on firm’s innovativeness can be interdependent, what are the distinct and combined effects of firm’s network and geographic position on firm-level innovation output? We analyze the innovative performance of German laser source manufacturers between 1995 and 2007. We use an official database on publicly funded R&D collaboration projects in order to construct yearly networks and analyze firm’s network positions. Based on information on population entries and exits we calculate various types of geographical proximity measures between private sector and public research organizations (PRO). We use patent grants as dependent variable in order to measure firm-level innovation output. Empirical results provide evidence for distinct effect of network degree centrality. Distinct effect of firm’s geographical co-location to laser-related public research organization promotes patenting activity. Results on combined network and co-location effects confirms partially the existence of in-terdependent proximity effects, even though a closer look at these effects reveals some ambiguous but quite interesting findings.
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Why are East Germans not More Mobile? Analyzing the Impact of Social Ties on Regional Migration
Peter Bönisch, Lutz Schneider
Abstract
Individuals’ preferences in transition regions are still shaped by the former communist system. We test this ‘Communism legacy’ hypothesis by examining the impact of acculturation in a communist regime on social network participation and, as a consequence, on preferences for spatial mobility. We focus on the paradigmatic case of East Germany where mobility intentions seem to be substantially weaker than in the western part. Applying an IV ordered probit approach we firstly find that East German people acculturated in a Communist system are more invested in locally bounded informal social capital than West Germans. Secondly, we confirm that membership in such locally bounded social networks reduces the intention to move away. Thirdly, after controlling for the social network effect the mobility gap between East and West substantially reduces. Low spatial mobility of the eastern population, we conclude, is to an important part attributable to a social capital endowment characteristic to post-communist economies.
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Will There Be a Shortage of Skilled Labor? An East German Perspective to 2015
Herbert S. Buscher, Eva Dettmann, Marco Sunder, Dirk Trocka
IWH Discussion Papers,
Nr. 13,
2009
Abstract
We analyze the supply and demand of skilled labor in an East German federal state, Thuringia. This state has been facing high unemployment in the course of economic transformation and experiences population ageing and shrinking more rapidly than most West European regions. In a first step, we use extrapolation techniques to forecast labor supply and demand for the period 2009-2015, disaggregated by type of qualification. The analysis does not corroborate the notion of an imminent skilled-labor shortage but provides hints for a tightening labor market for skilled workers. In the second step, we ask firms about their appraisal of future recruitment conditions, and both current and planned strategies in the context of personnel management. The majority of firms plan to expand further education efforts and hire older workers. The study closes with policy recommendations to prevent occupational mismatch.
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Why Do Payday Lenders Enter Local Markets? Evidence from Oregon
H. Evren Damar
Review of Industrial Organization,
Nr. 2,
2009
Abstract
This study analyzes payday lenders’ entry strategies in the state of Oregon in order to look for changes in the nature of the industry and its relationship to traditional financial institutions. The results of fixed-effects logit regressions suggest that payday lenders have started to enter areas already being served by banks. Furthermore, the presence of “incumbent advantage” in entry decisions may also have implications concerning the level of competition in the industry. Finally, since payday lenders also enter areas with large Hispanic populations, it is still possible that payday loans represent the sole source of credit for certain segments of the population.
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Shrinking due to corpulence? BMI in childhood predicts subsequent linear growth among US children and youth, 1963-1970
Marco Sunder
Annals of Human Biology,
2008
Abstract
While the USA is one of the most opulent countries, its population is not among the tallest but is among the most corpulent. This short report investigates the association between body mass index in childhood and subsequent change in height-for-age at the individual level, based on data from the National Health Examination Study (1963-1970). A sub-sample of participants in this survey was measured twice at intervals between 2.3 and 4.4 years, and assessed bone age can be used to account for differences in maturation at baseline. Regression results indicate that a BMI-for-age above the 85th percentile is associated with a reduction in growth by 0.03-0.06 height-for-age standard deviations per year, or roughly 1 cm within 4 years. An inefficiently high nutritional status in childhood may thus jeopardize subsequent linear growth. However, the trans-Atlantic height gap is considerably larger than what this empirical relationship could predict.
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Where enterprises lead, people follow? Links between migration and FDI in Germany
Claudia M. Buch, J. Kleinert, Farid Toubal
European Economic Review,
Nr. 8,
2006
Abstract
Standard neoclassical models of economic integration are based on the assumptions that capital and labor are substitutes and that the geography of factor market integration does not matter. Yet, these two assumptions are violated if agglomeration forces among factors from specific source countries are at work. Agglomeration implies that factors behave as complements and that the country of origin matters. This paper analyzes agglomeration between capital and labor empirically. We use state-level German data to answer the question whether and how migration and foreign direct investment (FDI) are linked. Stocks of inward FDI and of immigrants have similar determinants, and the geography of factor market integration matters. There are higher stocks of inward FDI in German states hosting a large foreign population from the same country of origin. This agglomeration effect is confined to higher-income source countries.
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Explaining Regional Disparities in Housing Prices across German Districts
Lars Brausewetter, Stephan L. Thomsen, Johannes Trunzer
IZA Institute of Labor Economics,
March
2022
Abstract
Over the last decade, German housing prices have increased unprecedentedly. Drawing on quality-adjusted housing price data at the district level, we document large and increasing regional disparities: growth rates were higher in 1) the largest seven cities, 2) districts located in the south, and 3) districts with higher initial price levels. Indications of price bubbles are concentrated in the largest cities and in the purchasing market. Prices seem to be driven by the demand side: increasing population density, higher shares of academically educated employees and increasing purchasing power explain our findings, while supply remained relatively constrained in the short term.
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