Working Paper #01.22 now available

By Thomas Brenner, Ann-Christine Link, Christoph Reudenbach, Hendrik Pott, Jan Rupp, Martin Witzenrath, Gernot Rohde, Mathias Pletz, Wilhelm Bertrams, Bernd Schmeck & CAPNETZ study group

The Working Paper #01.22 “Effects of Regional Meteorological and Air Conditions on Community-Acquired Pneumonia – Examining the Interaction of Individual, Meteorological, and Air Characteristics” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


Climate change will further increase not only the frequency but also the intensity of extreme weather events. As a result, weather conditions favouring pneumonia occurrence – suddenly warmer weather during cold seasons – can increase due to higher meteorological variability which is also linked with climate change. These meteorological trends are expected to lead to adverse effects on peoples’ health (Sohn et al., 2019). Community-acquired pneumonia, in the following simply called pneumonia, is one of the most common causes of death worldwide (Aliberti et al., 2021). At the same time, clear linkages between this disease and both meteorological and air conditions are present (Wang et al., 2021). Consequently, it is crucial to understand the effect of these meteorological and air conditions on pneumonia cases more deeply but also more specifically how these effects interact and depend on the personal characteristics and medical backgrounds of patients.

It is well studied that especially extreme weather and air conditions, the latter including air quality and wind conditions, have an impact on the number of people hospitalized for pneumonia (Y. Liu et al., 2014; Onozuka et al., 2009). However, many studies analyse the effects of meteorological and air conditions separately with mortality data as an endpoint while predominantly covering the Asian continent and specifically larger cities (Basu & Samet, 2002; Chung et al., 2009; Ge et al., 2013). Therefore, data on other geographical regions and combinations of rural and metropolitan areas are required. Additionally, little is known about how personal characteristics (age, sex) and health background (smoking history, chronic lung diseases, heart insufficiency, overweight) affect the sensitivity of pneumonia cases regarding meteorological and air conditions.

We close this research gap by analysing a prospective multicenter cohort that was treated in an in- or outpatient setting for pneumonia in 22 German hospitals or outpatient clinics. The dataset contains personal and health information for more than 10,000 patients. We match this data with daily regional meteorological and air condition data while not only considering the conditions on the day of hospitalization but also up to four days before. Logistic regressions are used to examine the impact of meteorological and air conditions on pneumonia cases considering a short-term and long-term perspective as well as the modification effects of various personal characteristics on these relationships. This research is valuable since it aims to not only determine but also predict when certain groups of people are at increased risk of pneumonia. This can support health care providers during periods of weather conditions factoring pneumonia in better preparing resources such as staff and treatments but also in guiding prophylaxis such as limiting outdoor activities.

keywords: pneumonia, climate change, meteorology, air conditions, germany

Working Paper #02.21 now available

By Tobias Johannes Hertrich & Thomas Brenner

The Working Paper #02.21 “Classification of regions according to the dominant innovation barriers – The characteristics and stability of regional archetypes in Germany” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


Lagging regions differ in their characteristics, implying a need for tailor-made policy measures to improve the economic situation in these regions. However, while there are differences between these regions, certain “archetypes” of regions might exist that share the same obstacles to innovations, allowing for taking similar political measures. This paper analyses whether such archetypes can be identified in Ger- many, what characteristics they possess, and how stable they are. For this purpose, regional characteristics that are related to innovation barriers are identified and op- erationalized. Then, a cluster analysis is conducted for the German labor market area. Based on these characteristics six archetypes are identified. These archetypes are found to be relatively stable over time, confirming that such a classification can be considered a good basis for policy measures. Furthermore, this classification al- lows to identify trends that might lead to problems in the future and require policy attention.

Working Paper #01.21 now available

By Sven Wardenburg & Thomas Brenner.

The Working Paper #01.21 “Analysing the spatio-temporal diffusion of economic change – advanced statistical approach and exemplary application” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


This article presents a spatio-temporal panel vector-autoregressive approach (SptpVAR) as an extended spatial econometric method for analysing spillover effects of regional economic change in time and space. The approach aims to extend the spatial dimension of SpVAR models by capturing the overall cross-regional spillover dynamics over time through additional estimations of effects into neighbouring regions and backward spillover to the source region. By showing how local economic dynamics trigger spillover dynamics in economically linked regions, the results are of particular interest to policy makers. To demonstrate the functioning of the SptpVAR approach, it is applied to 361 German regions using a regional growth model and a regional panel data set in the time-period 2000-2017 in an exemplary application.

Working Paper #01.20 now available

By Nils Grashof & Dirk Fornahl.

The Working Paper #01.20 “’To be or not to be’ located in a cluster? A descriptive meta-analysis of the firm-specific cluster effect” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


In the 21st century clusters can be observed in most developed economies. However, the scientific results regarding the effect of clusters on firm performance are highly contradictive. This inconsistency in the empirical results makes it difficult to infer general conclusions about the firm-specific cluster effect, referring to the effect from being located in a cluster on firm performance, e.g. derived through the externalities within clusters. Therefore, this paper aims to reconcile the contradictory empirical findings. It investigates whether the still prevalent assumption that clusters are a beneficial location for firms is unconditionally true or whether doubts about the alleged positive effect of clusters on firm performance are justified. By conducting a descriptive meta-analysis of the empirical literature, based on four different performance variables from four separate publication databases, the study investigates the actual effect direction as well as possible moderating influences. We find evidence for a rather positive firm-specific cluster effect. However, we identify several variables from the micro-, meso- and macro-level that directly or interactively moderate the relationship between clusters and firm success. The corresponding results demonstrate, for example, that a negative firm-specific cluster effect occurs more frequently in low-tech industries than in high-tech industries. ‘To be or not to be’ located in a cluster is therefore not the question, but it rather depends on the specific conditions.


Working Paper #05.19 now available

By Tobias Ebert, Jochen E. Gebauer, Thomas Brenner, Wiebke Bleidorn,
Samuel D. Gosling, Jeff Potter and P. Jason Rentfrow.

The Working Paper #05.19 “Are Regional Differences in Personality and their
Correlates robust? Applying Spatial Analysis Techniques to Examine Regional Variation in Personality across the U.S. and Germany” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


There is growing evidence that personality traits are spatially clustered across geographic regions and that regionally aggregated personality scores are related to political, economic, social, and health outcomes. However, much of the evidence comes from research that has relied on methods that are ill-suited for working with spatial data. Consequently, the validity and generalizability of that work is unclear. The present work addresses two main challenges of working with spatial data (i.e., Modifiable Aerial Unit Problem and spatial dependencies) and evaluates data-analytic techniques designed to tackle those challenges. Using analytic techniques designed for spatial data, we offer a practical guideline for working with spatial data in psychological research. Specifically, we investigate the robustness of regional personality differences and their correlates within the U.S. (Study 1: N = 3,387,303) and Germany (Study 2: N = 110,029). To account for the Modifiable Aerial Unit Problem, we apply a mapping approach that visualizes distributional patterns without aggregating to a higher level and examine the correlates of regional personality scores across multiple levels of spatial aggregation. To account for spatial dependencies, we examine the correlates of regional personality scores using spatial econometric models. Overall, our results suggest that regional personality differences are robust and can be reliably studied across countries and spatial levels. At the same time, the results also show that ignoring the methodological challenges of spatial data can have serious consequences for research concerned with regional personality differences.


Working Paper #04.19 now available

By Anne Margarian and Christian Hundt.

The Working Paper #04.19 “Location, industry structure and (the lack of) locally specific knowledge: On the diverging development of rural areas in Germany’s East and West” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


Some rural regions in Western Germany have experienced a very positive economic development in terms of employment and incomes in the past decade. This development, however, is in sharp contrast to the the enduring economic lag of many rural regions in Eastern Germany. This paper seeks to find out, to what extent these differences in employment development can be explained by sectoral patterns and region-specific capacities and capabilities.

We employ an extended shift-share regression model that explains the employment development in German districts between 2007 and 2016. The model differentiates between Western and Eastern German regions as well as between urban and rural regions by means of spatial location effects. This specification helps us to capture both: the historically evolved differences inherent in the socialist and capitalist past of Eastern and Western Germany and the varying economic environments in urban and rural areas. The extended shift-share regression confirms that simple industry effects, i.e. linear effects of industry shares, only explain a small part of the differences in employment development between rural regions. Most deviations are instead captured in the competitive share effects (CSE) that represents how employment development in a region systematically deviates from the average development of its industries at national level.

Further analyses of the CSE reveal that the manufacturing sector, despite its general loss in employment shares, is of crucial importance for rural prosperity. In this regard, the apparent disadvantage of rural districts in Germany’s East can be explained by a lack of locally specific, complementary immobile production capacities and capabilities for manufacturing. These locally specific skills develop endogenously. Urban districts in the East, in contrast, do not have to rely on endogenous factors alone but may overcome their historical disadvantage if they manage to exploit their agglomeration advantages in order to attract knowledge intensive industries and highskilled workers.

Working Paper #03.19 now available

By Jonathan Eberle and Philipp Boeing.

The Working Paper #03.19 “Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening.

Working Paper #02.19 now available

By Sven Wardenburg and Thomas Brenner.

The Working Paper #02.19 “The impact of place-based policies on perceived regional living conditions across German labor market regions. Examining the impacts on migration flows.” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


The paper analyzes the impact of the two major German regional development and redistribution policies, the municipal fiscal equalization scheme and the economic funds GRW, on perceived regional living conditions, measured through interregional migration between German labor market regions. Using a spatial vector-autoregressive panel model (SpVar), we find evidence that equalization transfers have a significant positive impact on perceived living conditions and contribute to the aim of regional equity. These effects are especially found for regions with low endogenous fiscal capacities. GRW funding reveals no significant effects on net migration rates in total, but short-term effects in rural regions.

Working Paper #01.19 now available

By Jonathan Eberle.

The Working Paper #01.19 “Regional fiscal equalization in Germany – A simultaneous equation approach to assess the economic effects of fiscal policy” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


Regional fiscal equalization in Germany aims to reduce fiscal disparities by allocating financial resources to less promising regions in order to support the supply of public goods. This paper aims to analyse secondary economic effects of regional fiscal equalization on several economic in- and output variables. Additionally, the paper examines the potential regional characteristics to influence the transformation of fiscal inputs into economic outcomes. Lastly, I compare the effects of fiscal equalization to these of the major German structural funding program GRW. My findings reveal a significant positive effect of fiscal equalization on the regional employment rate. Moreover, the findings suggest different transmission channels of fiscal equalization in East and West Germany. Particularly, I find higher effects in right-wing CDU/CSU preferring regions on the employment, human capital and private-sector investment rate. Finally, while structural funding affects more economic variables significantly, the magnitude of the estimated economic responses of fiscal equalization compared to these of German structural funding are not statistically different.

Working Paper #03.18 now available

By Jonathan Eberle, Thomas Brenner and Timo Mitze.

The Working Paper #03.18 “Absorptive capacity, economic freedom and the conditional effects of regional policy” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.


This paper analyzes the role played by regional conditioning factors, namely absorptive capacity and economic freedom, for the working of regional policy in Germany. We construct synthetic composite indicators to measure differences in these factors across German regions and stratify regions by their respective values. We then identify the subsample-specific transmission channels of regional policies in a spatial panel vector-autoregressive (VAR) framework and compare the direction and magnitude of effects by impulse-response function analysis and ex-post t-tests. The results point to two main channels of policy impact: While regions with low levels of absorptive capacity and economic freedom bene-fit from public funding only in terms of a traditional funding channel (i.e. higher investment rates and partly increased human capital levels), the link between regional policy, GDP and technology growth is very weak for these regions. In comparison, our findings hint at significant positive effects on regional GDP per workforce and patent activity for regions with a high absorptive capacity and economic freedom (i.e. a knowledge-based funding channel). This underlines the role of regional conditions for the direction and magnitude of funding effects and should be considered by policy makers as a means to trigger policy effectiveness in times of stagnating or decreasing funding volumes.