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,
Nr. 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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21.10.2010 • 60/2010
Kerstenetzky Award 2010 für Young Economists
Dipl.-Volkswirtin Katja Drechsel und Dipl.-Volkswirt Rolf Scheufele wurden bei der 30. CIRET-Konferenz vom 13. bis 16. Oktober 2010 in New York für ihre Arbeit zum Thema “Should we trust in Leading Indicators? – Evidence from the Recent Recession” mit dem Isaac Kerstenetzky Award 2010 für Young Economists (Honourable Mention) geehrt. Sie erhalten diese Aus-zeichnung auf Grundlage ihrer Arbeit zur Untersuchung der Prognosegüte von konjunkturellen Frühindikatoren in Deutschland in der Rezession 2008/2009.
Hans-Helmut Kotz
Pressemitteilung herunterladen
Interest Rate Convergence in the Euro-Candidate Countries: Volatility Dynamics of Sovereign Bond Yields
Hubert Gabrisch, Lucjan T. Orlowski
Emerging Markets Finance and Trade,
2010
Abstract
We argue that a “static“ specification of the Maastricht criterion for long-term bond yields is not conducive to assessing stability of financial systems in euro-candidate countries. Instead, we advocate a dynamic approach to assessing interest rate convergence to a common currency that is based on the analysis of financial system stability. Accordingly, we empirically test volatility dynamics of the ten-year sovereign bond yields of the 2004 EU accession countries in relation to the eurozone yields during the January 2, 2001-January 22, 2009, sample period. Our results show a varied degree of the relationship between domestic and eurozone sovereign bond yields, the most pronounced for the Czech Republic, Slovenia, and Poland, and weaker for Hungary and Slovakia. We find some divergence of relative bond yields since the EU accession.
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Preventing Innovative Cooperations: The Legal Exemptions Unintended Side Effect
Christian Growitsch, Nicole Nulsch, Margarethe Rammerstorfer
European Journal of Law and Economics,
Nr. 1,
2012
Abstract
In 2004, European competition law had been considerable changed by the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform and its arising uncertainty on the agreements firms implement, especially on innovative agreements like vertical R&D agreements. By means of a decision theoretic approach, we show that the law’s intention to reduce the incentive to establish illegal cartels will be reached but innovating cooperations might be prevented. To avoid this unintended side effect, fines but not the monitoring activities should be increased.
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Human Capital Investment, New Firm Creation and Venture Capital
Merih Sevilir
Journal of Financial Intermediation,
Nr. 4,
2010
Abstract
This paper studies the relation between firm investment in general human capital, new firm creation and financial development for new firm financing, such as the existence of a venture capital industry. On one hand, firm investment in general human capital leads employees to generate new innovative ideas for starting their own firm. Since employees need a venture capitalist to start their new firm, firm investment in general human capital encourages the creation of venture capitalists by increasing the need for their services, such as providing advice and monitoring. On the other hand, as new firm financing becomes available, firms' willingness to invest in general human capital increases, and as a by-product, the creation of employee-founded and venture capital-backed new firms increases in the economy. Hence, our model provides a rational explanation for the emergence of new firms created by employees of established firms, which represents one of the most common type of new firms in many industries.
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How Does Industry Specialization Affect the Efficiency of Regional Innovation Systems?
Michael Fritsch, Viktor Slavtchev
Annals of Regional Science,
Nr. 1,
2010
Abstract
This study analyzes the relationship between the specialization of a region in certain industries and the efficiency of the region in generating new knowledge. The efficiency measure is constructed by relating regional R&D input and output. An inversely u-shaped relationship is found between regional specialization and R&D efficiency, indicating the presence of externalities of both Marshall and Jacobs’ type. Further factors influencing efficiency are externalities resulting from high R&D intensity of the local private sector as well as knowledge from local public research institutions. The impact of both the specialization and the additional factors is, however, different for regions at different efficiency levels.
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FDI and the National Innovation System - Evidence from Central and Eastern Europe
Jutta Günther, Björn Jindra, Johannes Stephan
D. Dyker (ed.), Network Dynamics in Emerging Regions of Europe, Imperial College Press,
2010
Abstract
The paper investigates strategic motives, technological activities and determinants of foreign investment enterprises’ embeddedness in post-transition economies (Eastern Germany and selected Central East European countries). The empirical study makes use of the IWH FDI micro database. Results of the descriptive analysis of investment motives show that market access dominates over efficiency seeking and other motives. The majority of investors are technologically active in the region as a whole, but countries differ in terms of performance. The probit model estimations show that firm specific characteristics, among them innovativeness and autonomy from parent company, are important determinants of foreign investment enterprises’ embeddedness.
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Cross-border Exposures and Financial Contagion
Hans Degryse, Muhammad Ather Elahi, Maria Fabiana Penas
International Review of Finance,
Nr. 2,
2010
Abstract
Integrated financial markets provide opportunities for expansion and improved risk sharing, but also pose threats of contagion risk through cross-border exposures. This paper examines cross-border contagion risk over the period 1999–2006. To that purpose we use aggregate cross-border exposures of 17 countries as reported in the Bank for International Settlements Consolidated Banking Statistics. We find that a shock that affects the liabilities of one country may undermine the stability of the entire financial system. Particularly, a shock wiping out 25% (35%) of US (UK) cross-border liabilities against non-US (non-UK) banks could lead to bank contagion eroding at least 94% (45%) of the recipient countries' banking assets. We also find that since 2006 a shock to Eastern Europe, Turkey and Russia affects most countries. Our simulations also reveal that the ‘speed of propagation of contagion’ has increased in recent years resulting in a higher number of directly exposed banking systems. Finally, we find that contagion is more widespread in geographical proximities.
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