Foreign Trade in the Austrian Regions

This policy brief introduces a method to estimate foreign trade of the nine Austrian NUTS-2 regions. The basic idea of the method is to disaggregate national foreign trade data to the regional level using national input-output, regional employment and other supplemental data. This allows for the estimation of foreign trade of the Austrian regions for the years 1999 to 2009. The results indicate highly differentiated patterns of trade competitiveness across the Austrian regions. While Upper Austria and Vorarlberg perform well on European and global markets, other regions, foremost Burgenland, are in a much more difficult position. The regions' reactions to the 2009 economic crisis were equally differentiated. Although the decline of foreign trade led to an employment loss in all Austrian regions, Vorarlberg and Tyrol proved to be much more resilient than others

Foreign Trade and FDI in the Austrian Regions - A new methodology to estimate regional trade and an analysis of the crisis effects

Foreign trade and foreign direct investments (FDI) are key elements for economic development and growth of both a country and its regions. This paper focuses on foreign trade and FDI in Austrian regions (Bundesländer). Unfortunately, data on regional trade in Austria is only available on a very limited basis. The aim of this study is to develop new methodologies for the estimation of exports and imports of Austrian regions and analyse the data generated by this methodology. The basic idea is to disaggregate national foreign trade data to the regional level by using national input-output, regional employment and other supplemental data. This allows estimating Austrian regional foreign trade for the years 1999 to 2009. The study shows a large variation in trade among regions. Lower Austria, Upper Austria, Styria and Vorarlberg are the regions with the highest export share. The importance of regional trade increases between 1999 and 2008; the crisis in 2009 had a strong negative impact. Furthermore, the competitiveness of regions differs considerably. Only three regions, Upper Austria, Styria and Vorarlberg, show trade surplus

Identifying revealed comparative advantages in an EU regional context

[Introduction ...] Overall, this report is structured as follows: the next chapter (2) briefly outlines the relevance of regional trade indicators for determining the competitiveness of a region. In chapter 3, the methodology for the calculation of regional trade performance indicators is introduced, and the elementary results are described. Chapter 4 presents an econometric analysis relating key regional characteristics to international success of local industries. Based upon the regional distribution of comparative advantages, chapter 5 reports the results of ten regional case studies. Finally, chapter 6 summarises the results and provides policy implications.Prepared for: European Commission - Executive Agency for Small and Medium-sized Enterprises (EASME

The Future of EU Cohesion: Effects of the Twin Transition on Disparities across European Regions

Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? And what impact will it have on regional cohesion in Europe? Our study finds that greening and digitalising the economy will likely widen the gap between rich and poor regions in Europe

The Future of EU Cohesion: Effects of the Twin Transition on Disparities across European Regions

Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? And what impact will it have on regional cohesion in Europe? Our study finds that greening and digitalising the economy will likely widen the gap between rich and poor regions in Europe

New evidence on the tax burden of MNC activities in Central- and East-European new member states

Company-taxation policies in the Central and East European New Member States (CEE-NMS) have been frequently characterised as tax-cutting strategies in order to attract Foreign Direct Investment (FDI). On the basis of a survey of six empirical studies a median value of the tax-rate elasticities of FDI of -0.22 in CEE-NMS and mediterranean periphery countries is derived. Yet, these tax-rate elasticities probably suffer from a sort of measurement error bias since these studies entirely rely on the host country Statutory tax rate as measure of tax burden. Building on a thorough criticism of FDI as a measure reflecting multinational activity and the Statutory tax rate as a reliable measure of the effective tax burden, 315 effective average bilateral tax rates (BEATR) are calculated for seven home countries and five CEE-NMS for the period 1996-2004, following the approach of Devereux and Griffith (1998). Since our empirical results show substantial differences in the variability of the host country Statutory tax rates and the BEATRs, it is contended that the latter should be used as explanatory variables in empirical studies.Series: Discussion Papers SFB International Tax Coordinatio

Estimating demand spillovers of EU Cohesion Policy using European regional input-output tables

This paper develops a simple method to consistently break down world input-output tables to regional input-output tables. They are used to estimate Cohesion Policy-induced demand spillovers in the EU, covering the years 2007-2018. Results indicate that Cohesion spillovers from less developed regions to other regions exceed 40% of their initial EU support in some cases. In addition, spillovers from the more developed regions are equivalent to 24% of their initial EU support. This shows that the existing trade and investment linkages across the EU regions are strong and not only run from less developed to more developed regions but also vice versa. Our results are good news for the net paying regions in the EU. Taking into account capacity growth effects, Cohesion Policy spillovers might well be a multiple of the pure demand spillovers estimated in this paper. Thus, for net paying regions, Cohesion Policy is not only an act of European solidarity but also a rational long-run economic growth policy

Estimating agglomeration in the EU and the Western Balkan regions

The paper develops a model to consistently estimate agglomeration and agglomeration economies in European NUTS3 regions. It is based on the empirical observation that the size of population across regions as well as of other economic variables tend to follow a Zipf distribution. Furthermore, the model is extended to capture agglomeration effects in traditional regional convergence estimations. Agglomeration is analysed for 25 European countries, including Macedonia and Serbia, and the years 2000 to 2012. Results indicate significant agglomeration effects on the level and growth of regional economic development, with agglomeration and agglomeration economies generally declining in the Western European countries and increasing the Central East and South East European countries