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.

Abstract

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.

Advertisements

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.

Abstract

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.

Working Paper #02.18 now available

By Linus Holtermann and Christian Hundt

The Working Paper #02.18 “Hierarchically structured determinants and phase- related patterns of economic resilience – An empirical case study for European regions” 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.

Abstract

Our paper seeks to provide empirical evidence for a spatial-temporal system of (short-term) regional resilience determinants. Based on groundwork from Martin (2012) and Martin and Sunley (2015), we employ a nested hierarchy of regional and national determinants to constitute the spatial dimension, while we model the temporal dimension through a resistance and a recovery phase. Utilising hierarchical panel data models for a sample of 22 European countries, we can confirm the presence of a spatial-temporal system as we find significant determinants at both spatial levels that are connected via cross-level interactions and reveal varying, if not opposing directions of influences across the sensitivity and recovery phase.

Working Paper #01.18 now available

By Jonathan Eberle, Thomas Brenner and Timo Mitze.

The Working Paper #01.18 “More publicly funded research, more knowledge spillovers, more economic growth? An empirical analysis for German regions” 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.

Abstract

This paper deals with the effects of publicly funded research on regional
technological progress and economic growth. We adopt a system approach and
investigate the effects on all regional input factors and output by means of a
flexible spatial panel VAR (SpPVAR) model. This allows us to deal with the
evolutionary nature of regional dynamic processes. We further extend the existing empirical literature on the role of publicly funded research for economic
development by differentiating between public research activities conducted by
universities, technical colleges (Fachhochschulen) and non-university research institutes. The empirical results show that an increase in (public) third-party funds to technical colleges leads to positive effects on regional investment and
employment rates as well as the human capital stock. We also find a
positive link between the publication rate of non-university research institutes and regional investment and employment rates. Furthermore, an overall increase in combined public third-party funding of universities and technical colleges affects regional patent activities, the employment rate and output positively.

Working Paper #03.17 now available

By Jonathan Eberle, Thomas Brenner and Timo Mitze.

The Working Paper #03.17 “A look behind the curtain – Measuring the complex economic effects of regional structural funds 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.

Abstract

This paper investigates the mutual impact channels of Germany’s major
regional policy instrument (GRW) on regional economic development.
Different from earlier studies which have predominately focused on a partial assessment of output effects, we explicitly endogenize the factor inputs of the underlying production function.
This allows us to comprehensively assess the role of the GRW in driving per capita output, employment, human and physical capital intensities as well as the
region’s technology level. The results from a spatial panel vector autoregressive model show that GRW funding has significant positive effects on regional output, the employment rate and human capital intensity.

Working Paper #02.17 now available

By  Thomas Brenner

The Working Paper #02.17 “Identification of Clusters- An Actor-based Approach” 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.

Abstract

This paper provides two things. First, it gives an overview on the existing top-down methods for the identification of clusters (Section II). Second, it presents a new method that has been recently introduced by Scholl and Brenner (2016) in a basic version. However, the existing version of this approach is limited and does not take full advantage of its potential. The approach is further developed here and its characteristics and the procedure of its use are presented and discussed in detail (Section III).

Working Paper #01.17 now available

By Franziska Pudelko and Christian Hundt.

The Working Paper #01.17 “Gauging two sides of regional economic resilience in Western Germany – Why resistance and recovery should not be lumped together” 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.

Abstract

The paper empirically investigates the economic resilience of Western German regions in the wake of the Great Recession of 2008/2009. In particular, the focus is laid on the influence of regional agglomeration economies (arising from specialization, related and unrelated variety) and the explicit subdivision of short-term resilience into resistance and recovery. The necessity to distinguish between different factors and phases is well documented by means of the OLS regression results as all three types of agglomeration economies reveal varying, if not opposing directions of influences across the resistance and recovery phase. A pregnant example refers to regional specialization. Not only does it show a negative impact on resistance while exerting a positive influence during the recovery phase, but it is also mediated by the regional share in manufacturing workforce. This workforce reveals opposing phase-specific effects itself. Hence, ignoring the two-component structure of short-term resilience entails the risk of imprecise, if not false conclusions on the driving mechanisms stabilizing and/or destabilizing regional economies in times of crisis.